The RISKS of Going Solo

Starting out SOLO -the RISKS
Christopher Brazy
going solo
Everyone dreams of owning their own spa. Some follow through on it, some don’t. The ones who don’t are the lucky ones. Most are only setting themselves up for failure and heartache because they don’t come prepared.

The Goal
First, you have to know what you want. And it’s not “to make others happy” …you could do that by volunteering. Ask yourself these questions:

1-What do YOU want?

2-Do you want the stress of running your own place and finding your own clients?

3-Do you want the responsibility of running a small business?

4-Do you have the funds to not only begin your business but support yourself AND your business until it gets off the ground (usually a few years)? Under funding is a major pitfall.

5-What kind of person are you? Can you handle running a business, it’s not an easy task.

6-Do you have the skill set to run a business?

7-Have you consulted with a pro on the feasibility of it all and proper setup for compensation, systems, design, etc.? People thinking they can do it all is another major pitfall. This step costs a few thousand and shouldn’t be skipped.

8-What’s your focus, USP and long term goals?

9-Could you make just as much working for someone else?

10-Fellow spa owners, post in our forum what I’ve missed!

We’re human, we work best when we focus on one thing. Have you paid your dues and learned the tools of your trade? If you’re just out of school you’ve got years of real world training to go through to master your craft. Most will drop out within two years. What if you decide it’s not for you after six months and you have a business you can’t leave?

If we’re successful, we lose. The goal should be to grow, which means if you’re busy with clients, who’s going to answer your phones, handle scheduling, take the countless hours to handle the daily grind of business duties, ring up clients, and much more when you’re in the room all day? You won’t even have time to do laundry! Then you get lucky and grow but can’t meet the demand so you take the plunge and hire staff. What then? Well, bad news, no one works unsupervised and no one cares about your business like you do. You HAVE to supervise them. That means putting on your management hat and giving up your treatments with your own clients. So the years you just spent building your client list is now handed over to your staff who won’t be able to treat them as you did. Training and motivating people is also a skill not easily acquired.

There’s a proper way to run a successful solo operation. It’s not by making a deal with the local chiro and renting an extra room. It’s not by renting a room in a busy salon and crossing your fingers. It’s by having a goal, a proper business plan, a large budget and lots of time on your hands. First learn your trade. Then make a plan with a specific goal. Then create a business plan. All this of course is dependant on money, LOTS of money. Even as a solo practitioner it’ll take most of your time, money and life so make sure you can commit to it. THEN most businesses will fail within 2 years and nearly all business will not be around 10 years later. Going about it blindly, you’ll be another statistic. Going in with knowledge and financing is the only way to stack the deck in your favor.

The Money-Making Salon Spa Menu

The Money-Making Menu
Christopher Brazy

How you design and what you offer on your menu not only speaks volumes about your spa but also affects your profit. So what can you do about it? You’d be suprised how simple the answer is. With simple changes to your layout, services and packages you can greatly improve your bottom-line.

First off, make it easy! People pick up menus and have no idea what they’re looking at. Many have to take it home and study it. Make sure yours is easy to read with these steps.

• Use dark text on a light background. Vice-versa is too hard to read.

• Use a readable font like Times New Roman or Arial, avoid frilly fonts and scripts.

• Don’t “center” everything, a left align is easier to read.

• Make the sections clear (massages, facials, etc).

• Place contact info in an easy to find spot so they can book with you.

• If you’re printing large runs of menus, do NOT include pricing, it makes it impossible to change without reprinting. Place pricing as an insert (like lunch specials).

• Make the services clear, what is an XYZ massage and what does it consist of?

Instead of offering a regular massage and another deluxe (longer) one with a slightly different name, list just the name of the massage. Then list to the side the options for it, i.e. 50 mins. 70 mins. & 90 mins. By doing so clients will have the chance to upgrade themselves.

You can also “load” your menu. This means to balance the services offered so that there are more high-end ones. So if they were to choose at random the odds are greater of choosing a high-end service. For example, we offer a deluxe glycolic facial. Instead of offering just one on our menu, we created one for each skin type, adding four to our menu.

McDonalds is the master of this. If you’re old enough you’ll remember it used to be you’d just order a hamburger and they’d ask “would you like fries with that?” Now you order the whole deal, a “number 1.” They’ve tripled their income with these package deals; the fries and drink are already included. But did they stop there and give up their add-on? No, they ask if you want that super- sized. Why? If they’ve already got the “whole sale” why go for more? Because people will take it. It’s all a numbers game; the more you offer it to the more will take it and if you don’t you’re leaving money on the table.

The obvious upsell is more time. The menu has now got that covered for you so when you recommend it they’ll already be familiar with it (and you should always recommend the longer service, it’s better for them and you!). The not so obvious is the add-on. Create add-ons that require more time and ones that can be done without extra time (so you can still offer something even if there’s another booking right after). Extra add-ons that require extra time could be a foot scrub, extra extractions, eye/lip masks, etc. Add-ons that don’t require extra time could be a firming gel application, hypnotherapy, etc.

A HUGELY common mistake out there is to offer a package discount. Let’s look at this closer, what do we know about packages? They take up the whole day, so are harder to schedule. They often are with non-spa goers (received from a gift certificate) so they don’t know spa etiquette and will often no show or not tip. They are the “yearly vacation” spa goers, not your monthly regulars and will want Saturday which means our lifeblood (regulars) will have a tougher time getting in with us.

To offset these negatives, we need to make sure we’re getting premium pricing.

First, do NOT offer a discount. Let me say it again. Do NOT offer a discount. When someone asks “what’s the special” just before Mothers day respond with “this is our ultra-deluxe spa package, she’ll love it!” People are wanting a spa experience, not a McSpa value experience.

Second, do not offer your regular services in there. Create special services that are NOT on the menu. These could even be “limited edition” services, like a chocolate wrap, that should be $20 more, or you could price it at a normal rate if you’re hung up on offering discounts.

Thirdly, add-on another $20! This is just for the no- show/pain of it all. They won’t know because the services are not on the menu. If you want to account for it, toss in lunch or some flowers for free.

Series, not packages
If you want to go one step further, sell a series of monthly treatments instead of packages. They promote return visits which will hopefully earn you a monthly regular as opposed to a yearly vacationer. It could be a “5 for 4 special” or better yet “a year of massages.” What sounds better, “A day of bliss?” or “A year of heaven?” Retail sales will increase with it too since you’re getting your message across to them again and again. There’s also a cash flow benefit since it’s not being redeemed all at once.

Make sure to look at our sample menus to see a bad/better example in our download area (they’re rough, but demonstrate the point).
Now your mission for this week? Redo your menu, take action and make it happen!

5 Steps for your Salon Spa’s Vision

5 must-do steps to creating a successful vision
Christopher Brazy

Our own nature shoots us in the foot. Yes it’s true. Being on the cutting edge of the spa lifestyle, knowing all that’s available and all the good that it can do and shooting for the stars …may just be what is causing so many of us to fail.

Write out your dream
Being holistic entrepreneurs, we tend to think BIG. Everything we’d like to do would be on the grand scale to say the least. So here’s your chance to go for it. Think of everything you’d like to do. Write it all down, “spa-city” with clients of 100,000 daily. Walls of gold. Rooftop spa parties and underground steam caves.

Keep in mind when you’re planning that you are doing just that, planning. This is ALL in the planning phases, so is open to change. Actually, life tends to never turn out as planned, so be PREPARED to change. Don’t be married to a single vision. BEGIN your vision here, and then grow it, let it ADAPT and change as the need arises.

Face Reality
OK, now that we’ve got our dream in place, let’s revisit it and see what’s practical. Will 10,000 residents in my town be able to fill up spa-city with vacancies of 100,000? Should I tone it down a bit? Would a 1,000 room hotel and resort spa on the coast be economically feasible without a board or directors and $100,000,000 invested? (we know of hotels that spent that much on their spas alone).

Take a look at what you REALLY want to be managing. Does overseeing 30 hairstylists or 3 massage therapists sound better to you? Do you think pedicures and wraps pay for the equipment needed to offer them? Will separate locker rooms, a meditation room, a couples room and a 20′ tall grand entry with waterfall be possible since you have to pay for all that space on a monthly basis at $24/square foot/year? Tone down and rewrite your vision. Take a look at what is most likely to produce the maximum sales with the minimum risk/investment.

Look at the Competition
Take a look around and see where you can fill a need. Is there anything you’re doing that not’s being done? What’s going to set you apart? And it’s not the “one stop shopping spa experience” that will do it, EVERYONE offers EVERYTHING, just look at the identical lists of services in the yellow pages. Find a specialty area, determine your market and see what’s possible.

Also, you have a distinct advantage over others for things that you are passionate about. Since opening a business means giving up your family, risking all your savings and/or home and working for free for many years, having a passion for what you do is crucial. Follow your heart and find your true passion that will allow you to forge ahead through the slow times, network, work the press, promote yourself and prevail.

Complete a Market Evaluation
I once had someone come up to me and ask about opening resale shop for used garden equipment. Sounds bizarre to me, but who knows, it could fly. Sending out mailers, to let’s say a 5 mile radius ASKING them what they’d like to see is always a good idea. You could find that there’s no need for massage, but a salon would be wonderful. Or they don’t’ want either, but a health club.

Find an expert at these type of inquiry type of mailings and have it done. Use the feedback to tweak your plan even further and make it even more marketable.

Create a budget
Now that you’ve got feedback and have your plan refined, you should have a decent picture of what’s going to be required to fulfill your dream. Find an accountant, or get a spreadsheet and some help from the SBA (small business administration) and crunch the numbers. I always say “multiply your expected expenses by 10, and divide your expected income by 10 to get the REAL picture.” People laugh at this, but it is TRUER than you’d think. People expect their minimum, worst-case scenario days to be $1,000.00 Well guess what, $1,000 isn’t your minimum day, ZERO is. And you’ll see zero dollar days more than you’d like to. As for expenses, they just pop up out of nowhere and tend to multiply like mad. And this is all BEFORE advertising, which is a huge expense that never ends.

Once you have a budget, pnl statement (profit and loss), etc. setup and in place, refer to them often. It’s hard to tell what’s going on if you don’t look at the numbers and see what is real.

Now your dream is well on its way to becoming a reality. It’s practical, based on reality and your passion. The competition has been checked out and your specialty niche should do well for you. You’ve gotten feedback on your areas needs and have created numbers to go with your refined dream. Since you’ve created a dream based in reality, you’ve got a huge head start on the competition and are ready to move on to making it happen.

6 Retail “Must-Do’s” for your Salon Spa

6 Retail Area Must-Do’s
Christopher Brazy

Do you have product sitting on your shelves collecting dust? Do your caregivers dread recommending product? These tips will help you create a stellar retail area.

Where is your retail at? It should be front and center. Preferably right next to your check out area. This way the caregiver can quickly find product for the client, set it on the counter and have it ready for them.

You also want a “spotlight” location. Something that shows it off. You don’t want it hidden somewhere. Find a spot where there’s the most traffic, easily viewable for browsing or window shoppers and near the front desk.

The retail area must also have a certain look to it. It should reflect your spas niche. So if you’re a trendy spa, make a trendy area. Luxurious? Medical? High-end? Affordable? Make it match.

It also needs balance. We put our “elite” items on the top, then the larger items on the bottom (since they’re easier to see) and the rest in the middle. The shelves are made of columns and glass to not only reflect the luxury of our spa, but to reaffirm the products worth.

Nothing will kill a sale (and loses a client) quicker than dirt. If the products look used, who would buy them? I wouldn’t at any cost. If the shelves are covered in dust (glass collects dust very quickly) it says to the client that “this stuff has been sitting here forever, no one must like it.” Even if the spa itself is dirty (read as double check your restrooms) it reflects on your operations and will affect your sales.

Many spa owners feel the need to carry many different lines (at least 2 or 3). I don’t. Having a backup supplier is a good idea, but I am NOT of the mindset that products sell themselves; actually I have discovered the opposite to be true.

Here’s what you do need. You need enough products on the shelves to show a thriving business. If you’ve only got a couple items of each on just a few shelves people will ask if you’re going out of business. I find that a single row of product that fit on my shelves will be 6 products deep. I place the newer product in the back to make sure we keep our stock rotating (if we always put new product in the front, and only sold from the front, the product in the back would get older and older until it’s shelf life expired). When we get down to three we reorder. Three will hold us until our next shipment arrives.

Excitement must come from your staff. There’s ways to help them with this though. By following the previous steps you’ll have a retail area that jumps out and showcases quality. If you follow up on that by printing special posters you can place at the register and in your spa highlighting a monthly special you’ll be adding to that. Even printing a little take home product catalogue adds to the prestige of your line.

Lead by example. Always stand behind your products (and services) and refer to them as the best available. With OTC and MLM products costing often much more than professional spa products do these days, there’s no excuse to allow the uncertainties of a caregiver (since the line may be new to them) bring it down. Talk it up, have print marketing to show it off, spotlight it in your retail area (i.e. lighting), even show ’em an ingredient list if need be, just do it. Retail is a HUGE hidden income stream that should be just as much a part of your spa as the services.

Easy to Buy
This is all the behind the scenes information. The more steps needed to complete a sale, the less likely it is it will happen. Let’s put it in checklist form.

• Products are organized and easy to find (say I wanted the oily skin cleanser instead of the sensitive).
• Product prices are clearly marked (or easily found).
• Products are waiting on the counter for the client upon checkout (either via the caregiver, a spa-scription or the receptionist).
• Answers to questions are readily available.
• You accept any and all payment types.
• Policies are in plain sight.
• The checkout process is quick and painless.

Now print this out, head to your retail area and make it happen. You may be already set up properly or you may have some work to do. Either way looking into your specific situation and evaluation it will always be for the better. Your sales will be your reward for doing so.

Make Your Salon Spa Competition Proof

3 keys to being competition proof
Christopher Brazy

With low price massage and facial franchises competition popping up all over and large health club spas making a big presence following these steps is a must to keep your client base from straying.

Be Unique
As attractive as “one stop shopping” is as a profit idea from the owners standpoint, focusing on a niche is what is excelling. Look at all the department stores and malls that are on the way out. And what’s in? Specialty stores. Starbucks, take-n-bake pizza and so on. By focusing on what you specialize in, you are creating a unique image. You can still offer additional services, but don’t try to brand yourself as such. Why be a “jack of all trades, master of none.” Be the Acne Expert or Relaxation Specialist.

Take a look at the phone book, what do you see? Lists and lists of everything under the sun service-wise. Lets’ say Relaxing Day Spa offers massages, facials, wraps, waxing, hair, nails, acne, anti-aging and microdermabrasion treatments. What does Tranquil Day Spa offer? The EXACT same list. We’re all identical! When we’re all the same in the clients eyes, what do they fall back to? Price. Who’s the cheapest. Whereas if you do body work and specialize in accident recovery, who do you think will get the call for those insurance massages? FOCUS. Find what your unique talent is and reap the benefits for doing so.

Be the Expert
Once you’ve got a USP (unique selling point/proposition), you should seek to establish yourself as the expert in that field. After all, if the news is doing a story on teen acne, where would they look for input? The day spa/salon/nail shop? Or with the Acne Expert?

You should start to build a list of local media contacts. E-mail the editors often with NEWSWORTHY information and articles you can provide and ask them to contact you for further information. Landing an article, or being published, will offer MUCH more business opportunity than a paid advertisement. Your credibility will also skyrocket and you’ll be able to charge premium fees since you’re THE person to go to.

We had a group of returning soliders call us from their plane to book a day at our spa. Luckily I had the sense to call the papers (with their permission) to let them know what was happening. They came out and did a story about their return and how they cared for themselves overseas in the desert that not only landed us some amazing quotes and photos but the front page! People still mention to us that they saw that story, years later.

Be a Friend
Lastly, and most importantly, is being a friend to your clients. And I don’t mean going out together or getting together for cards, but really CARING about your client. It’s your relationship with your client that will keep them from straying. And don’t let that relationship stagnate. Never take them for granted. Always treat your clients like a first date.

It’s truly amazing to watch my wife work. She’s long given up her caregiver role and focuses on management, at which one of her main tasks is individually greeting the guests. I’ve watched her more than once say hi, ask how they are, and then end up sitting down and catching up on what’s going on in their lives for 10 minutes! Even the call back the next day (during her caregiving days) built that relationship and was once even quoted “she’s even called at home to see how I was doing” to the newspaper.

Salon Spa Compensation Models

4 compensation plans that can make or break you
Christopher Brazy

How do I pay my staff!!!???
Compensation is a HUGE concern for owners and staff alike. Choosing the wrong one can literally put you out of business in no time. With so many different systems out there and payroll often being your number one expense, how do you find the one right for you? These 4 types below should give you a clear picture on which one you should use to get profitable.

Hourly Pay
This, as well as salaried, is how most of the nation is paid. If someone is at work they get paid for it. The benefit is your staff will always know what to expect, as well as yourself. By offering an hourly pay you’re offering security (people work for more than just money). You can keep your pay rate lower than a typical commission scenario since it’s guaranteed. Just make sure you have enough clients so that you aren’t paying your staff to sit around all day. This not only is a very successful model for spas that are very established and busy (many resort spas pay hourly since they don’t rely on their staff to get their business) but is common in many hair franchises as well.

Additional benefits of hourly pay are that you can focus (and afford) on other types of benefits/compensation as well. Insurance, perks, training, bonuses, paid vacation, sick days, etc. are now all within the realm of something affordable. Items such as these offer better employee satisfaction. Take away all these other benefits of compensation and all your staff is left with is money. Supply these benefits (as well as praise, education, etc.) and money becomes less and less of an issue.

Salesmen are often commission based. It can be a percentage OR a flat fee per service, but the point is that you only pay your staff when they are actually performing a service. We’ve found many salons work this way. Since a stylist often has their own client list and following, they can demand a higher amount. The typical salon percentage was 50% for years. Many spas took this example and implemented it into their spa. That may not have been the best idea. With spa staff, they often do NOT have a following. They are relying on you to supply the clients. So if you’re paying a high commission AND have to do all the advertising to get clients, you’ll find yourself in hot water quick! Expenses alone are often well beyond 60% in a spa BEFORE staff, so anything near 40% leaves you with practically nothing as an owner. Copying the salon model in a spa is where most spa owners doom themselves before they even open their doors.

If you’re paying a smaller percentage (20-30%) or flat fee/service (an even better setup for commissions since price increases don’t automatically create pay raises) it’s will keep you much more liquid. However, your staff will be very nervous when the books are slim. They’ll want to be on call (this has never worked out well for us), show up late and leave early. They feel that they aren’t being compensated for their down time. You can try to negate this feeling with paying min. wage OR commission, WHICHEVER IS GREATER, but they don’t relate too well to that either. Since they’re used to $X/service, the idea of making that OR minimum wage isn’t appealing to them.

Commission PLUS hourly, your staffs dream
A commission for each service AND an hourly rate for the down time is what every employee dreams of. It would most likely be your worst nightmare though. They get the best of both worlds, a high salon style percentage and hourly down time pay. For an owner, you are not only offering a decent pay hourly for nothing, but also higher commission pay when they’re busy. Some med-spas have taken this but reversed the typical roles of it. Instead of a higher commission and lower hourly, they offer a very small commission (let’s say 5%) and a higher hourly (let’s say $15/hour). So in this case the commission is more of a sales-bonus. Med-spas are a new and different breed though and their model is yet to stand the test of time.

Booth Rental
This is a very popular salon model. Renting space is the cosmo’s end dream. Just out of school when they have no clients, they want paid hourly. Once they get busier they’ll want to be paid commission. Once your split of the commission is the same as booth rent, they’ll want to switch to that. Simply put, that’s all renters should be doing, renting space. They should get a key and that’s it. However there’s a lot of grey area. Mainly with who’s the boss? If someone is renting from you they should be running their own business. All phone lines, credit card transactions, business cards, signage, booking, ringing up, advertising, etc. should all be the renter’s obligation. As a landlord your obligation is to give them a key and collect rent. But the lines have been blurred here and the owner is supplying EVERYTHING the renter should be and are still getting very little for their efforts, just a meager rent check.

There’s also the issue of creating your dream spa experience. When someone else is the boss of themselves (they are just renting after all) they can perform and act however they like. For you to be in charge of your place, you can’t let someone else open up shop within it.

So what’s best?
Naturally, it depends on your situation. Do you want to create a dream spa experience and need everyone to follow your rules as an employee? If so, booth rental is out. Here’s what we’ve observed:

Many new spas start out commission based, since they can only afford to pay out when there’s money coming in. This is why many fail, they forgot to build in working capital and end up with not enough operational funds, or money for themselves. So you’ll see spas offering a higher and higher percentage commission to lure in staff that has a following. What it means for staff is a higher pay/service but fewer clients.

Hourly we see at spas that are packed with clients and don’t rely upon their staff to supply them. Since they have the clients coming in to cover expenses, they can guarantee an hourly rate that would translate to a very small commission. But since they’re paying less, they can offer security along with other benefits that staff find attractive.

Commission plus hourly would get very expensive unless you reverse the typical roles and go the med-spa way of a higher hourly with a smaller bonus commission, but then that is similar to hourly with a commission benefit. Booth rental will provide very little income and we feel is still best when offering a small space to someone with a large following, which means pretty much salons only.

Here’s a funny side-note we observed. Regardless of the pay, a higher commission salon with few clients, or lower commission fee/service with a more clients, or a decent hourly with many clients it all comes out to about the same HOURLY pay. When you factor in all of your staffs types of pay, the service/hourly pay, their retail sales and tips, most average about $20-$30 something per hour. And that’s what it’s all really about for them anyway. Try to get them beyond the “setup” of pay and into the reality of “this is what your paycheck is going to be.” More on that in another article though…