La Jolla Day Spa is a new upscale in La Jolla, pearl street ,San Diego county, that is offering a complete spa experience. We offer fifteen ultra-comfortable, ultra-chic treatment rooms with the finest linen, ambience and equipment. The cool breeze from the sea gives a good feel of freshness. We sell products like ointment, perfumes and other beauty products. Some of the massage types offered include deep tissue work, hot stone massage reflexology, traditional Swedish massage, and pregnancy sports. Other services include waxing; a method of hair removal from the root that rids the skin of hair and dead skin. Other products include body treatments; a non-medical treatment which includes aromatherapy, mud baths, hot tubs and saunas, and massage. We apply various physical means to manipulate soft-tissues for relaxation, facials that encompass massaging, toning, exfoliation steaming and moisturizing, and skin exfoliation- a non-medical health treatment that’s done to remove hair from both the body and skin leaving the skin smoother and healthier. The spa does have the latest anti aging techniques and products. For regular customers we give complementary services like cutting, styling and coloring of hair, manicure or pedicures. We chose a location next to a salon so as to co-market. We have qualified and trained message therapists who are licensed this ensures quality services for our clients. Based on our client’s initial interview information our aim is to tailor their experience, as well as customer’s requests during the treatment, this is to ensure customer satisfaction and repeat visit. We use the finest lotions and oils, aromatherapies and treatment creating a better overall experience: decor, special lighting, textiles and music as this will enhance the spas overall experience. The business is projected to be up and running by the second year of operation.
The initial investment of $150,000 is our capital. The business is a partnership and this sum will be from partner’s savings. We will set aside another $50,000 incase we run short of funds and to be able to pay employees and pay for utilities.
This includes analyzing La Jolla’s demographics and studying portfolios of businesses that are adjacent .According to the international Spa Association research, retail health and beauty industry revenues annually total up to $12 billion with day spa contributing $ 7billion to this figure. With tourists streaming in all year round the spa has a constant supply. Spa is no longer seen as a luxury but as a fundamental need; since because of the high cost of living people are forced to work extra hours which causes fatigue. Our target market includes locals with $25,000 household income, tourists on holiday. We are also targeting clients with a high disposable income, those with chronic pain or old injuries, those seeking relaxation; the anti-aging market is a segment that is highly growing. We have made contacts with hotels that do not offer spa services for referrals. There are day spas all over San Diego making this kind of business highly competitive; since our business is starting up we are faced by high competition (D’Angelo 159).
Our unique services coupled with latest equipments make this business worth venturing. Our target is the high end spenders who are willing to part with any amount in order to get quality services. Clients choose spa services based on location exceptional experience and quality (Cohen and Bodecker 217). We meet all the above qualities therefore we believe that we will dominate the Spa market in no time. The closest competitor is Gaia Day Spa that offers a wide range of Spa treatments. The Bella Tosca Day Spa & Salon is a high competitor as it also offers salon services. Most of the Spa combines therapies for both men and women; our services only cater for women. The rate of going for messages in San Diego is about $150-$200 per hour. Implementing aggressive networking and marketing coupled with excellent services, skilled, commissioned aestheticians and therapist’s gives us an advantage financially. We will employ marketing as a competitive edge, professionalism is fundamental in service delivery, we plan to hire the best message therapists and aestheticians. La Jolla will give services that will ensure repeat visits; this will be achieved by offering unique services using the latest equipments. The business is projected to be making profits by the fifth month.
The first trimester is characterized by costs overriding sales, the business ends up running at a loss totaling to about $90000; this is because of the challenges of establishing a business in an already crowded market our costs are more as this is the point where the business is being set up. Before we establish a constant customer base our prices will be low so as to attract clients and through recommendations from other clients we have already served. By the second trimester costs of sales are increasing the costs are reducing and we break even at this point as people have heard about our services and are willing to try. The exceptional services increase our customer base. By the third trimester we are making profits as we are already established. More clientele are streaming in and this increases our sales. The costs are constant; our variable costs are higher than fixed costs as our employees are paid on commission as opposed to monthly payments. By the fourth trimester the costs incurred are constant we are by now operating on costs of operation since the overhead costs have all been paid. We are making exorbitant profits as the sales have tripled. The above data shows the growth of Spa over time.
According a study commissioned by International Spa Association (2011), the basic reason for visiting Spas is stress relief and relaxation. Having this in mind the availability of the market, location and the market trends for Spa business, the Spa is projected to make huge profits. It is a good investment as it will give good revenues. The traditional notion that Spas are a luxury has been replaced by the habit of regular visits to the spa; based on this we project the sales to increase with time. This is clearly depicted by the graph above. La Jolla receives tourists all year round; the business will therefore receive clients through out the year.
International Spa Association [ISPA]. N.p., n.d. Web. 28 Feb 2011.
D’Angelo, Janet. Spa Business Strategies. New York: Milady, 2009. Print.
Cohen, Marc and Gerry Bodecker (eds). Understanding the Global Spa Industry. London:
Heinemann, 2008. Print.