The period from 2020 to 2023 has become a period of great strength tests for all SPA & Wellness enterprises around the world without exception. The next few years also do not promise to be easy. Nevertheless, life goes on, and the ship of your business sails, overcoming all obstacles over and over again – the perfect storm of 12 points, complete calm, the threat of a collision with a suddenly surfaced iceberg. It’s time to refine the navigation maps again, check the compass and build a route.
According to QuickBooks analysis, 80% small business owners worry about cash flow and fail because of this.
Therefore, in the new year 2024, you need to think again about the cash forecast and calculate several indicators:
1. Income
SPA&Wellness center set financial goals for income. Establish a sales plan for spa and wellness services, health procedures and beauty products for home use. Although it is difficult to predict how deep the economic problems of the global world may be, there must be a plan! At the same time, not only should it be realistic, but also moderately optimistic. A share of optimism will motivate your business and will give you strength and energy to work.
The sales plan is based on the following indicators:
· the number of workplaces and treatment rooms of the SPA&Wellness center,
· average bill by division or group of services
· planned load of each office or indicators of its use
· the number of working hours of each workplace of the SPA&Wellness center
To build a plan, you need to take into account the data on the financial reports of each division and each group of services, the dynamics of their changes in quantitative and percentage values obtained over the past year. Think about what real % increase you can plan based on the reporting data, as well as starting from the plan of marketing strategies and advertising activities for the coming period. What do you need to do for each indicator in order to increase the income of the SPA & Wellness center?
Workplaces, treatment rooms and indicators of their use. In order to predict income prospects as accurately as possible, it is necessary to clarify which main commercial accounts you have are highly effective and which do not have a significant weight in generating income. Think about it, maybe it makes sense to abandon these services in favor of more popular ones? Do not keep empty spaces. Does it make sense to deepen the specialization of the SPA & Wellness center and focus on a narrower niche? If it is possible to increase the functionality of at least one workplace, do it! If it is not possible to repurpose unclaimed offices, then it is better to abandon redundant jobs.
Average check. When calculating the income of the SPA&Wellness center you also need to know the value of the average check by department. Many automated accounting programs allow you to regularly monitor the average check for each type of service for any period, any specialist or client. By increasing only this indicator, you increase income, even if all the others remain unchanged. There are quite a few methods for increasing the average check in any SPA&Wellness company: sales of cosmetics for home care, additional procedures to the main course of spa therapy, diagnostic and consulting procedures in various formats, sell up promotions, sales of package offers, etc. It is also necessary to think about how to influence the increase in the depth of the check, or the increase in the number of positions in the check.
Perhaps in order to increase revenue from body spa services, it is worth restructuring and updating the menu of services, removing low-value offers, introducing hardware-based body care techniques, or adding injections of fat-burning cocktails? Or maybe to sell related products to the Slim&Detox course programs, n., dietary supplements that promote weight loss? Or enter in the menu of SPA&Wellness center services consulting services of a visiting nutritionist? Or implement a paid mobile app to monitor your weight loss progress?
There are always more solutions than meets the eye.
2. Expenses SPA&Wellness center.
Here we have to analyze and optimize several important expense items of the SPA&Wellness center.
Rent and operating costs of the premises. It is great if you can negotiate with the landlord for better terms and even rental holidays in case of unforeseen circumstances or major economic market shocks. But in any case, take engineering and technical measures to reduce the cost of lighting, heating and water supply of the SPA & Wellness enterprise and train the staff to rationally use these resources.
Expendable materials. The cost of consumables in the SPA-industry is quite high in the price structure for services. It is important to control the consumption rates of materials for each service, preventing specialists from overspending materials. If you do not have well-established consumption rates for cosmetics and ancillary consumables, urgently introduce them and secure strict compliance with the norms in written agreements with each employee.
Check inventory for surplus and non-liquid stock when expiration dates expire. Teach staff how to use inventory on a first-in, first-out basis to prevent spoilage of cosmetics.
And, finally, negotiate with suppliers of cosmetic spa-products on more favorable commercial terms. Any discount will increase your profit.
Staff costs. The most promising payment system, in our opinion, is a reward system based on KPI and grading depending on the level of education and experience of specialists in the field of Health & Medical SPA, SPA & Wellness. Think about how perfect your pay system is and how it can be made more efficient to increase profits.
Marketing and advertising expenses. There are many ways to attract customers without high costs. Do you know everything about them? It’s time to study them and try the most suitable for you in the new reality. Involve specialists in this, develop in them an expert level of knowledge and the ability to advertise yourself and the services of the SPA & Wellness center in various social networks.
In our experience, many SPA&Wellness companies often spend money on things that are not “critical”. Try to spend money only on things that help you achieve your top business priorities.
3. Predict profit.
For such a calculation, it is necessary to distribute all planned revenue and planned costs by types by groups of services and goods, and then the calculation formula will look like this:
Planned profit for a group of services = Revenue for this group of services – Costs incurred for this group of services.
Remember that if you reduce costs, you can increase profits without increasing income.
4. Prioritize
It is impossible to achieve everything at the same time and at once. First of all, eliminate all weaknesses in the sales system, patch up the holes through which your finances and missed opportunities irrevocably fly into the void.
For example, if the SPA&Wellness center has a weak conversion of new clients, there is no methodical work with the database of “asleep” clients, there are few purchases, there is no hint of an increase in the average check due to additional services, immediately start working with administrators and client managers. These can be different methods – in-depth training on industry training platforms, mentoring to build referral sales skills, personal coaching to eliminate psychological barriers in communication, overcome the fear of sales, to neutralize professional burnout syndrome, etc. Do this after a thorough and objective analysis of the work of SPA&Wellness administrators, a frank and confidential conversation on both sides. Set new performance criteria, maintain closer contact with them not only to control the work, but also to understand what real difficulties SPA&Wellness administrators face in implementing the plans. Respond promptly and promptly to all changes, do not be afraid to abandon both ineffective ideas and solutions, and unpromising employees.
You should also prioritize the payment of certain expenses. Develop a payment schedule and stick to it strictly. Paying your bills all at once can mean you don’t have money when you need it urgently, important payments or unexpected expenses.
Also, be thoughtful when paying for cosmetics orders, avoiding chaotic or spontaneous orders. The purchase of cosmetics should be carried out on the basis of the results of the monthly inventory of product balances and in accordance with the procurement plan.
5. The importance of a well-done financial planning job
The SPA&Wellness center business forecast, or cash flow document, should be your navigator for the next 12 months. Review it monthly based on monthly reports, make adjustments and update. Refer to it when making business decisions, it is the basis of the financial well-being of the company.
Time is money. Take action and back up your plans with data based on reality.
If you have any difficulties, you always have the opportunity to contact the interdisciplinary experts of our company.