Let us learn about your business and see how we can help.

 

Wellness Capital Management is pleased to offer an in-depth complimentary 30-minute Wellness Business Consultation.

 

Growth? In This Economy?

Back from two trade shows, heading back for more. Full of great ideas from the Day Spa Expo and IECSC in Las Vegas. There appeared to be some prevailing concepts in the business forums. Compensation, profitability, and how can I increase my sales. In the past two newsletters we addressed compensation and profitability of services and products. Let's talk about growth.

Congratulations, most of you reading this have weathered (or are weathering) the economic hurricane that struck us pretty strongly in the last quarter of 2008 and throughout 2009. For those with their eyes and ears open, there is opportunity for growth. Our businesses will grow; one client at a time - one relationship at a time. What this requires is an awareness of what is going on around us. 

The economy is not the evildoer that has caused doom and destruction among all spas across the country. Although many of us have seen revenue decline 15-10%, some of our clients have experienced growth of 30-35%. Why? There is no one answer, but it has to do with common sense and identifying opportunities that exist within our spa, our market and our community. 

One client of mine watched the sale of one her competitors to one of the estheticians employed there. No sooner had the sale closed than the new owner announced that she would not be honoring any unredeemed gift certificates sold by the previous owner. My savvy client got some press and promoted that she would give every client with an unredeemed gift certificate a free facial. Hmm, I wonder what happened. Good thinking!

Another client noticed that a large company was closing down their "non-profitable units". Bear in mind that these businesses, although not profitable by this corporation's standards, provide an excellent opportunity for an ambitious spa operator poised for growth. "Non-profitable unit" may be the euphemism used to help larger companies save face. My client was able to benefit by acquiring a fully equipped built-out spa that could be re-branded and operated. An additional location was opened for very little investment, and they were able to re-negotiate all of the outstanding leases and contracts at a much lower payment.

"Spa Refugees" need a home. It is estimated that in some markets, 20% of the day spas closed between 4th quarter 2008 and 4th quarter 2009. So, where are their clients going? Do they stop wanting facials, massages, or body treatments because their favorite spa closed? With some creative promotions, you may be able to lure some of them into your spa.

Doctors, nutritionists, acupuncturists, and naturopaths are phenomenal caregivers but lousy marketers. Many of them have a good-sized client base that would be comfortable being served in a spa setting. I am of the belief that our industry is heading for a convergence of spa and preventive, complementary, and alternative health services. I feel that if we are able to give our clients an opportunity to visit our businesses for more than beauty and help guide them into more of a lifestyle preventive program, they will visit us more often. Do these health practitioners offer services that could complement the services offered in your spa? Perhaps they could lease a treatment room that you aren't using all the time. The synergy could attract a new clientele to which you could cross-market spa services.

Growth takes many forms even in a roller coaster economy. Keep your eyes open, listen, and be creative.