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Thu07192018

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Checklist for Expanding Your Spa

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Every business owner that survives the critical early years in operation will arrive at a point where the physical expansion or remodeling of the original location seems like a reasonable idea. Client growth beyond your ability to serve as currently built, cramped working space for a larger spa team and the desire to add new treatment options, all may foster the desire to redesign your spa's layout and look. Besides, that once-vogue Tuscan theme with its faux finishes and terra cotta accents may now seem ancient indeed to your regular and newer customers.

We've all seen older businesses that allowed their sign paint to peel and décor age as the owners, long used to the daily grind of working there, overlook what customers clearly see. For my part I've been amazed at how an entire restaurant staff will not hear the skipping CD, hotel housekeeping will miss a large spider web day after day, or a spa will tolerate an embarrassing menu typo for years. But these are small details when compared to a major business remodel-do we tear down the building when a new sign will satisfy a problem?
I've worked with many consulting clients that have called me to help them plan the running of an expanded business after construction was already underway. Isn't it reasonable to plan for that before committing to a costly overhaul? One must ask what the driving motive was for such a project in the first place. Was that remodel really needed? What was the expected financial result? Did one consider an alternate plan? Is the risk worth the potential reward?
To help those that might be considering a future expansion or rebuild of a spa business I have created a checklist of key considerations you can use to better evaluate the idea. As much as you may be emotionally sold on your plan you'll do well to slow down and think hard about the real cost/benefit of it. Desire has a mean way of luring honest people into some serious cash and management trouble. Better safe than sorry, as they say, so do the homework here and see how it all adds up afterward.

Plan Expected Benefit Worst Case Stop or Go?

Relocate the spa to a more visible space in the shopping center, while enlarging it at the same time.

The newly improved visibility will increase business, the extra patronage requiring additional service and retail area

Overhead increases but business doesn't grow as hoped for. Extra management duties creates hard-ship for owner.

STOP! Are we really suffering from poor visibility or is our own marketing faulty? It's far, far cheaper to promote than to build!

Enlarge spa into new adjacent space. Our service quality is suffering under the current cramped conditions

 

Increased comfort and privacy will slow employee and client loss, create additional retail space and give an office to manager

Interrupting business with loud construction will further hurt sales. Some customers like the spa just as it is now. Will they leave?

Cautious GO! Loss of clients and staff is a serious business expense. Don't over-build! Allow room to grow but not too much! Be wise here.

Redecorate the spa as our look is getting dated and the trend is toward modern, clean lines, not our tired old French country theme

The change will boost client excitement in the spa and help to keep us competitive. We don't want to fall behind the times!

Worst case? How could a beautiful new interior be a bad idea? Everyone says to go for it! We'll spend money but you have to maintain your facility, right?

STOP! Do we know our current look is harming business or are we just bored with it? Change the feel of the spa and you can alienate happy clients at a high cost to you!

The business has been successful and we can buy our own building. It'll need remodeling but it's in our present area and is in better shape than the rented space

The more modern building eliminates the hassles of asking our cheap landlord to fix things he's slow to do. The whole center has declined and our customers tell us so.

It's always scary to buy property! What if business suddenly drops or the price of real estate declines? We'll have to pay or do our own repairs when we need them.

Enthusiastic GO! If you've done well enough to invest in a building you can have an asset to own and a great tax write-off. Just make sure you're not buying a decaying money pit!

A competing spa went out of business and we got a great deal on their used equipment, but we need more room to accommodate it.

How can you pass up a deal like this? Plus, we'll probably get all of their old clients now that they're out. I got that mini sauna for a third of list price!

There's no way this will fail! Those guys didn't have a clue how to run a spa, that's why they went under. I love the idea of making money off of their stuff!

STOP! STOP! STOP!

Your puffed-up over-confidence is going to sink you sooner or later. This victor's dance is leading you to make a bad move!

But, you'll show them!

The nail area has never proven to be profitable and you're turning valuable facial business away daily. You want to convert the nail area into two new facial rooms.

More service and retail income from the new facial treatments we can now provide. Easier to manage one enlarged service team that two smaller and diverse ones.

We could lose some clients that liked having their nails done here. Could be hard to find more qualified aestheticians.

GO! Better to do more of what you do best, especially in such easy-to-upgrade treatments with their rich retail potential. The lost nail business may be easily offset by aesthetics sales.

I read how many spas are now offering yoga, meditation, and prenatal classes. We need to build a large classroom so we can do that, too.

If it's working for other spas why not us then? We need to keep up with service trends and it sounds like fun to offer these!

It may not make much money but the PR will be good and we can use the room for lots of new things or whatever.

STOP! Bad idea. Do you actually know if those services are "working" for the spas you read about? What does "working"

mean? You're caught up in a costly dream.

We've been doing great for years but now a big new spa is going to open near here so we're going to enlarge ours to keep up!

We're afraid that all of our customers are going to run over there when they see just how big, new and gorgeous it is! We can't afford that!

The worst thing is to sit around and wait until it's too late to do anything! The whole thing is just freaking me out!

STOP! Please... Fear is the worst reason of all to get into needless debt. If you believe that sight and size alone will win your clients it's time to take a class in customer service.

When you can truly justify the expense of a remodel, you will still have to pay for the investment over time, and this added expense may just set back your business profit longer than you expect. Many business owners expand right at the point where the company is getting out from debt and can yield a little real income for them. Plunging it right back into borrowed money may seem like the ticket to a fatter future, but chances are that the opposite will prove true. Before spending a bundle on that remodel or expansion enjoy the moment of relative financial freedom (assuming you have any) while taking careful study of the need to invest further. Vendors and builders will be happy to write your orders but the payments are yours alone! Get help from a qualified expert to help you evaluate your plan and even then wait until the emotional high has run its course. Good luck in your business success!

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