There is no doubt 2012 will be another challenging year for most industries, and the spa sector is no exception. Spas will not only need to come up with more innovative business models but will also need to have the necessary cash flow in order to survive the coming year and deal with the current economic environment.
In order to accomplish this, external and objective assistance will be required. Consulting services provide spas with the comprehensive know-how that is needed to manage the complexity of these businesses. Like in any growing business, areas of specialty are crucial and it is impossible for one person (eg. Spa Director) to cover all the necessary areas of expertise.
This is particularly true in times of crisis where old rigid models are being replaced by new more dynamic and flexible ones in order to meet the needs of an ever more demanding and spa-savvy consumer. With the right consulting services in place, you can turn around your spa or wellness centre into a successful business.
The reasons behind failure
In the past, many investors entered into the spa industry looking for quick money. When the economic crisis hit, these investors found out that they actually lacked the necessary industry know-how and experience of these complex and high cost-base operations, thus the closure of a number of spas.
The main reasons behind the failure that affected the spa industry when the financial crisis hit the market are:
- Lack of sufficient know-how.
- Lack of adequately trained Spa Managers and Directors.
- Unrealistic financial expectations of what spas could generate.
- Rigid business model that did not take into account dips in demand and the need to of flexible pricing.
- Lack of clear strategy.
- Lack of coherent pricing policy and yield management systems.
What happened to some hoteliers is just an example of this failure. In fact, several hoteliers thought they could run a spa thinking that selling treatments was the same as selling room nights before they came to realise that it was actually a totally different ball game.
There are several types of consulting services available for spas. For example: ad hoc consulting services such as feasibility studies, concept development, marketing, etc.; business optimization; operational set-ups; training; recruitment, etc.
It is impossible that most spas have all the required skill sets in order to make the business a success. The idea is for the owner/manager to identify the weaker areas and seek expert assistance in order to cover these areas.
For example, at Spa Balance we find that the Business Optimisation service is very successful as sometimes we see that spa managers and directors, or hoteliers, do not know where the holes are and need help in order to identify the weak areas and make the appropriate changes. After evaluating each and every single aspect of the business, our operational audit provides the spa with a comprehensive set of correct strategies to implement.
Common mistakes to avoid
One of the most common mistakes spa managers (especially those with a therapist background) and hoteliers make is that of getting easily seduced by product brands. By thinking that a certain product brand will suddenly pour customers through the door, many hoteliers, spa owners and spa managers have learned the hard way that this idea is far from an effective strategy.
The only thing that this ‘strategy’ provokes is additional costs in terms of new stock purchases and the whole process of trying to get rid of old stock. Moreover, this scenario forces spas to change their treatment menus creating confusion among customers. Even worse, hoteliers and spa owners tend to adapt their spa concept to the product brand they have chosen, and that is probably one of the worst things they can do as it compromises their whole spa concept and hence brand.
Another major mistake is that of assuming a spa director knows each and every aspect of management. What needs to be taken into consideration is the previous experience of the spa manager. In most cases, a therapist or receptionist is promoted to a spa manager or director role without the appropriate training, which forces him/her to learn through trial and error. Along those lines, having business acumen and expertise is also equally important. Unfortunately, most spa directors and managers lack the required commercial background and human capital management experience that is needed.
An additional mistake to avoid is drastic cost cutting where spa receptionists are totally removed from the equation. While it is important to have a team that multi-tasks and is cross-trained in other departments, it is also important to understand the role that receptionists play for your business. This role is not only about picking up the phone and carrying out basic administrative tasks. Receptionists are, in fact, your sales agents and the very first point of contact with your clients.
Finally, it is important for spas to move from the idea that they do not really need help and that they can do it by themselves. If you want to turn around your business, you need to be prepared to make the required structural and strategic changes that are necessary to accomplish that goal.
The value of consulting
With the assistance of a consultant, the common mistakes we just referred to can be easily avoided. Moreover, the experience and know-how of the consultant appears as the ideal tool to deal with the complexity that surrounds the operations of a spa. With the right consulting services in place, your spa has the possibility to thrive in today’s challenging environment.
If your spa is struggling in the current economic climate, our Business Optimisation service may be the right route for you to pursue. If you would like further information on how our Business Optimisation service can help you maximise revenue and profits, contact us at info [at] spa-balance [dot] com. Our experts will be delighted to assist you.