6 steps to a successful spa expansion
By Jeff Russell

With 12,000 Americans turning 50 every day, many doctors — both MDs and DCs — are expanding their existing practices by adding a wellness spa. Since there is no shortage of baby boomers who want to stop aging and look fabulous, this is an excellent time to explore the spa industry.

Before you jump into the wellness spa industry, keep the following six steps in mind:

1. Start with a road map. A business plan is critical for business success, and it is especially important when starting a wellness spa. Not only is it necessary if you are going to require financing, but it will act as a blueprint for building a successful spa practice.

Develop a clear strategy of what services, procedures and products you will offer. Do not try to be everything to everyone.

2. Know your financing options. Do not underestimate the costs associated with opening a wellness spa. Are you simply adding hair-removal equipment to your existing location, or are you building a new facility? Consider your financing options — this is often a reality check.

You have a number of options, including leasing, using working capital and obtaining loans. Equipment leasing is the best way to go if you want to pay for your equipment as you use it, while preserving your capital and bank lines. Under-capitalization is one of the main reasons businesses fail; make sure you are prepared.

3. Evaluate products, equipment and services. Once you have completed your business plan, you will have a clear idea of how many treatment rooms you will need. Do not forget to calculate the amount of retail space you will need to support the spa.

When choosing your skin care or other products, choose the ones you really believe in. Otherwise, you are missing a huge profit opportunity. You may even want to use a private label.

4. Select a location. By now, you know your target customer; the next step is to be where your customers are. You should have good traffic flow and be in an area with sufficient commercial and residential density.

5. Build your dream team. If you do not want to be encumbered by the day-to-day operations of the spa, choose a spa director very carefully. This person needs to have exceptional customer-service values and be talented enough to choose and develop the right team for your spa.

6. Get the word out. First, you need to let all your current patients know about your new wellness spa, but do not stop there. Develop a comprehensive marketing plan prior to your grand opening. You may want to offer free informational sessions on popular topics (such as wellness) or a special promotional treatment package.

Don’t underestimate the time, skills or money needed to open and operate a spa. According to Dunn and Bradstreet, 96 percent of businesses in America fail because of managerial incompetence. If you don’t have the business skills or time, you must hire someone who does, or use experienced medical spa consultants.

Jeff Russell is CEO of MedSpa Financing, www.medspafinancing.com, a division of Oakridge Healthcare. He can be contacted at 800-485-5759.