At Strategies, our business is to advise owners of employee-based salons and spas to develop successful and sustainable businesses. For a business to be “successful and sustainable”, it must not only be profitable, it must have sufficient cash reserves. A luxury spa should have a profit margin of 10 to 15 percent, depending on your operating expenses, payroll rate, and overheads. Today, many day spas operate with compensation rates of 50 percent or more, leading to minimal or no profit margins.
You should check your financial health if you are an independent spa business owner. Many day spa owners also rent part of their space to independent contractors with their own equipment. No formal education is required for day spa owners and they do not have to attend cosmetology schools. As with other salon owners, day spa owners must retain customers and get new ones to keep their salaries.
Three-quarters of respondents say they are excited to try these services right now, and that interest will increase as services become more widely known. It is more likely to be the higher end of the range estimated for salon owners who attract famous customers. Several day spa owners now provide mobile services to their customers, which means less monthly overhead for renting the space. While reducing expenses may be an option for homeowners to increase their income, paying expenses such as vacation pay, health insurance, and paid education can help differentiate their spas from the competition.
What a day spa owner brings home as payment can be adversely affected by the expenses required to manage their spa. Research has shown that most owners understand and have correctly predicted the operating expenses of a company, failure comes in an overestimation of the company's ability to generate revenue; in other words, overly optimistic utilization projections. Many are the owners of new businesses, whether from a spa, restaurant or other business, who were able to carry out their vision and received great feedback from customers, but simply did not have the money to keep the doors open for the required period until there were enough business on a daily basis. It is essential to have a network of professionals to recommend to its customers the services that your own spa does not offer, and vice versa.
While the Bureau of Labor Statistics does not list the actual salary of day spa owners, it does give an indication of what they could earn in a typical year, especially since some often work as technicians. So much so that it's not unusual to hear service providers say, “I don't care about numbers, I just want to do my job, when owners and managers try to share financial and critical numbers with staff. After hiring your team, technical staff (or service providers) will need to be trained on product knowledge and treatment protocols, some of which may be performed by your product partners, but you will need to give it your own spin. Owners of high-end salons who attract celebrity customers are more likely to be at the top of the estimated range.