Pamperzhou Day Spa

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Day Spa Business Plan

Strategy and Implementation Summary

Our strategy is to implement the most aggressive marketing and networking in the community---followed by the best services in the business. Our prices ar competitive for the area, and our personnel plan, which includes using a pool of skilled, commissioned therapists and aestheticians, will give us a financial advantage.

5.1 Competitive Edge

Our competitive edge is our ability to market effectively and creatively to bring in the clients and then back that up with the best service and products in the business.  In addition, our combination of unique services, outstanding location and our interaction with the customers are setting us up for huge success. 

5.2 Marketing Strategy

Local Advertising & Seasonal Promotions - Local newspaper advertising, local fliers, grand opening party kick-off and promotion for first 30 days.  Continue regular advertising and plan for seasonal events like Christmas, Valentine's, Mother's Day, Prom and New Year's.  

Local Networking - Charities, women's groups, country clubs, wedding planners, and membership with the Metropolis Chamber of Commerce.

Health Care Referrals - prior to opening, work current contacts and create new contacts with health care providers, especially chiropractors.  Also, become a Provider with health insurance companies that offer Alternative Care to their members.  Most people don't know that massage therapy is usually paid by insurance when billed correctly and when prescribed by a physician.  Pamperzhou Day Spa already has practice management software to handle medically billable massage.  When the insurance does not cover the entire amount of a service the client will pay the difference.  For that reason, we will not want to participate with any PPO's that require write-off for amounts over the usual and customary fee (which tends to be too low).  A list of acceptable insurance company plans will be maintained and those clients will be able to handle massage therapy through their insurance.  Any opportunity to convince allopathic physicians - MDs - to see massage as having long-term healing benefits for their patients will also be taken, since they hold to key to having massage paid for as "medically necessary."   The client will also help drive that with the physicians if they are properly educated. 

Hotel Referrals - Hotels that do not offer their own spa services will send their guests to our spa or use our out-call spa services. Prior to opening, I will make contacts with managers and concierges at local hotels to ensure they are aware of the services available. Promotions will be offered to professionals in these industries to create buzz and build relationships.

Online Website - our spa will show up on every major search engine and in the phone directory. The website will have a full menu of services and eventually have the ability to schedule appointments on-line. The spa software we are using will allow a user to see the schedule and make and appointment without making a phone call.

Location traffic - It is imperative that we be located in a high-traffic strip mall that is high-end, modern, and clean. We prefer locating near a complementary business like a nail or hair salon that does not offer any massage or facial treatments.  

5.3 Sales Strategy

If, as it has been said, the top three items which determine success in business are location, location, location, then a busy location at Culway Plaza in a thriving residential community represents our top marketing strategy. With the owner focusing on the sales, marketing and management and delegating the massage and aesthetician therapies to employees--business profitability potential is exponentially maximized over a one or two person operation by a direct care-giver without any marketing, management or sales background.

As the owner, Madame Pamperzhou has done extensive market research and visited some of the best spas in the world -- Beverly Hills, Paris, Amsterdam, Vegas and Arizona -- and has taken ideas from the best to offer an upscale, ultra-amenity, spa experience. Once a client experiences the luxurious, high-end level of personalized care that we offer, we are confident that we will have a return client. 

5.3.1 Sales Forecast

The startup table assumes a realistic growth trend. There are four main areas of income:  massage, aesthetician, retail and out-call. For the forecast, massage and aesthetician services were conservatively estimated at $65 per service with 35% of that going to the service provider.  The basis for these projections is a conservative estimate of 7 services per day the first month in business, and 53 services per day by the end of the first year.  At 53 services per day, we would still only be operating 75% to capacity with 7 treatment rooms operating 7 days a week, 8-10 hours per day.  Outcall services will enhance the bottom line by allowing us to generate sales without using any of our retail space.  Out call also averages a higher per service charge, averaging around $80 per service with 65% to the therapist and virtually no overhead.

On retail products the gross margin is consistently 50% across the board. The retail lines go in conjunction with the spa services as an extension of the spa experience.  The more customers, the more retail sales that will be driven.  These high-end cosmetics and spa products are hard-to-find items that generate repeat purchases.

Sales Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Sales
Massage Therapy $527,830 $550,000 $560,000 $575,000 $580,000
Facials and Anti-Aging Treatments $177,410 $180,000 $185,000 $186,000 $190,000
Outcall Services $23,600 $27,000 $30,000 $35,000 $37,000
Retail $94,845 $100,000 $125,000 $150,000 $175,000
Total Sales $823,685 $857,000 $900,000 $946,000 $982,000
Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5
Linens and Cleaning $3,644 $3,785 $3,875 $3,980 $4,035
Oils & Lotions $14,577 $6,140 $6,800 $7,420 $8,040
Cost of Retail products / 50% of Sales $47,423 $50,000 $62,500 $75,000 $87,500
Subtotal Direct Cost of Sales $65,644 $59,925 $73,175 $86,400 $99,575

5.4 Milestones

The following table lists important store milestones, with dates, implementation duty, and budgets for each. The milestone schedule emphasizes the timelines for implementation per the sales and marketing targets listed in detail in the previous topics.

Milestones
Milestone Start Date End Date Budget Manager Department
Business Plan 2/2/2004 2/20/2004 $0 Owner Owner
Financial Backing 6/4/2004 12/31/2004 $165,000 Owner Owner
Design Contractor Retainer 1/1/2005 1/15/2005 $5,000 Owner Owner
Construction Contractor Retainer 1/6/2005 1/16/2005 $10,000 Owner Owner
Lease Agreement 2/1/2005 2/3/2005 $20,000 Owner Owner
Brochures 2/11/2005 2/12/2005 $500 Owner Owner
Logo Design 2/19/2005 2/23/2005 $150 Owner Owner
Business Cards (Initial) 2/19/2005 2/23/2005 $20 Owner Owner
Grand Opening 6/1/2005 6/1/2005 $0 Owner Owner
53 Clients per Day 6/1/2005 5/31/2006 $0 Owner Owner
Totals $200,670