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Regaining Your Dream

By Rhana Pytell
Posted: March 26, 2008, from the April 2008 issue of Skin Inc. magazine.

What attracted you to the spa business? Was it the industry’s dedication to beauty, the possibility of transforming clients, or perhaps the desire to create an environment of peace and relaxation?
       Most spa owners, directors and estheticians enter the spa profession with the desire to live a better life and help clients do the same, while becoming a voice supporting a conscious approach to wellness.
       In reality, however, many have seen their aspirations marginalized by the demands of a business that leaves them burdened by financial management, inventory control, regulatory compliance, facilities management, complex equipment maintenance, hiring, training and repeatedly solving the same problems. They are left wondering, “What happened to my dream?”

Bringing back your dream
       If you’ve felt burdened by the operational side of spa management, the road back to your dream is not as long as you might think. The key is to establish operational systems and share them with your entire team. As you design and introduce these methods, you’ll notice a reduction in repetitive problem solving and manager reliance, as well as an increase in the ability to consistently deliver a higher standard of service.

       What are systems? Systems are sets of operations or procedures that are supported by materials, such as work sheets or checklists that you and your team members can routinely use to produce a consistent, desirable outcome. The most successful spas have systems for all aspects of spa management, from treatment room setups, compensating service providers and rewarding referral clients, to inventory management. They are important because they provide a new level of control throughout operations, and free up your time to focus on the strategic and revenue-generating areas of your business, such as retaining your top clients.
       In the August 2007 issue of Skin Inc. magazine, author Frederic Holzberger noted that day spas need to maintain a 70% client retention rate in order to succeed, compared to much lower numbers for destination spas, which can rely on a continuous flow of guests arriving daily. To achieve that rate and meet financial goals, it is important to plan and work differently. The International SPA Association (ISPA) industry report documents nearly a 20% decrease in revenues to day spas from 2005 to 2006.

Making systems work for you
       Take a moment to consider your business and identify its weaker points. In order to develop systems for your spa, select an area on which to focus, such as spa operations, marketing, leadership and management, or finance. Most owners must attend to all of these areas, but few perform equally well across the board.
       In addition, when you engage in this process, take it slowly. Your goal is not to make the weakest area the strongest; it is to address the deficiency so that it is no longer a liability to your organization. Keep it simple and meet the minimum requirements. Then, as you experience success, continue updating and refining the area.
       Once you’ve identified an aspect of your business to work on, consider your ideal outcome. This will be your goal. Next, carefully review the changes, processes, accomplishments and methods that will deliver this result. Also, be sure to keep all of your team members engaged in the process so that they can share in the creation, implementation and reward of your dream spa and its new systems.

       Example No. 1: retail operations. Although all areas of your business cannot be addressed in one article, following are a few examples about how to set up systems to get you started.
       It’s common for spa owners to neglect the retail side of their business; when short on time, they attend to clients first. However, some spas excel in retail operations and use their proficiency in this area to heighten profitability.
       For example, it is important to know how to utilize inventory controls to minimize shrinkage and loss, or the amount of dead stock that accumulates on the shelves. In addition, you must create ordering processes that stay in sync with clients’ needs.
       In the retail area of your business, it makes sense to focus on sales. Other systems that are necessary for a profitable retail business include the following.

  • Weekly inventory counts and shrinkage records for your key product lines
  • Instructions about how to record shrinkage and policies regarding what to do when inventory is disappearing
  • Mark-down systems to continually eliminate dead stock
  • Ordering systems that combine historical sales data and sell-through goals
  • A method for introducing new products and their benefits to team members and clients  

       By implementing these strategies, you will dramatically improve retail profits. In addition, when documenting these systems, you will simultaneously buffer your company from the impact of employee turnover. With clearly documented procedures and well-defined accountabilities that are understandable to all team members, you can train new hires and watch them become productive within days or even hours.

       Example No. 2: leadership and management. In many spas, owners worry constantly about employee turnover and its potential impact on the business. It is important to realize that no matter how much you’ve invested in making your facility a wonderful place to work, turnover is inevitable—people move, go back to school, have children and pursue career changes. It is important to minimize its impact by strengthening hiring and training practices.
       In order to enhance training and orientation methods, create a CD for each new team member as a welcome to your organization. It could include:

  • A PowerPoint presentation that states the company’s mission, along with a few marketing materials that reflect the spa’s intended look and feel, client testimonials and management philosophy.
  • An organizational chart that lists every position in the company, even if some are currently vacant.
  • A job description outline for each position.
  • A complete job description for the new employee’s position that includes the checklists, policies, work plans and forms that correlate to each item on the description. For instance, a concierge or support team member may have “Opening the Spa” as a line item. Checklists used when opening the spa each day would be included, as well as any problem-solving information that is necessary with these procedures.
  • A training checklist that corresponds to this job description.
  • Policies regarding reviews and compensation.
  • Compensation guidelines for the new employee’s position, along with a potential career path.