reprieve. But being in a hot industry is not a guarantee for success. One has to carefully navigate the pitfalls in order to sustain and grow a business in this highly competitive area. In this installment of BLACK ENTERPRISE’S Dream Business series, we’ll look at how to launch a successful day spa.
THE REALITIES OF REJUVENATION
There’s no denying this is a booming industry. There are roughly 12,100 spas throughout the United States that generated an estimated $11.2 billion in revenues in 2003, according to the ISA. Day spas represent the largest segment of this industry, generating about half of those revenues.
With an increasing emphasis on wellness by all Americans — and particularly aging baby boomers — going to the spa has become the norm. “If you think about getting manicures eight years ago in comparison to now, it used to be like a luxury. Now, you get a manicure every Thursday. It’s just something that has become the norm,” says Alexis Ufland, director of Lexi Design, a New York City consulting and design firm.
The trend among African Americans is no different. “I think that the African American market is an expanding market right now. The hair is treated differently, the skin is treated differently; this is just a huge time for growth in this market,” says Ufland. “There’s a huge, huge, demand out there for better skincare products and services that are specific to African American skin type, so, if anything, it’s a great market and a great niche for someone to open a business within.”
However, that industry growth means more competition, and too often entrepreneurs will hang out the shingle before they’re properly educated on the business end. “A lot of people go into the business like, ‘I like facials, so I’ll be able to run a spa,'” says Ufland. “The truth is that it’s a very difficult business to run and you need to be more business savvy than expected.”
WHEN COSTS RUNNETH OVER
Because day spas come in all sizes and offer a wide range of services, startup costs vary greatly. A mid-range to high-end spa with a 2,000 to 3,000-square-foot facility can run up to $200,000. If you throw in four treatment rooms, tack on about $15,000 each for equipment. But cost-conscious entrepreneurs can still manage on a shoestring budget. Often, spa owners will offer a few services, such as manicures and pedicures, purchasing two to four pieces of equipment, and gradually buy more equipment as the business grows.
Prospective spa owners should be careful not to overspend. In this business, every square foot of the location should generate income. Experts suggest not to spend money where you can’t make it back. For example, $4,000 for a mirror is not going to get you back $4,000. Also, don’t spend beyond your means. There will be ongoing expenses such as rent, payroll, and supplies. André West-Harrison, who consults with prospective spa owners for The Preston Method in Boulder Creek, California, explains, “$8,000 for a hydraulic massage/facial bed in a resort spa is