2. Your Presenter
Wynne Business provides consulting and education, including
live seminars and on-site team trainings, for the spa and salon
industry
• Lisa M. Starr
– 20+ years experience in
salon & spa industry
– Senior Consultant,
Wynne Business
– Community Ambassador,
Gramercy One
– Consultant, educator,
writer, presenter
3. What is Success?
If you are an owner/operator, do
you draw a commission or salary for
your revenue producing work?
If you are an owner/manager, do
you receive a salary for your
contribution in managing the
business?
4. Defining Profitability
• Dictionary definition –
yielding advantageous
returns or results
• What does it mean to you?
• Do you know if your business
is profitable?
5. Set Goals FIRST
• Earning a modest living while
waiting for your property to
appreciate
• Financing a job for
yourself/partner/friends
• Because you like to go to spas!
• You enjoy having a LOT of
children
7. Departmental Details
• Service Sales
– Massage/body
– Hair
– Skin
– Nails
– Makeup
• Retail Sales
– Massage/Body
– Hair
– Skin
– Nails
– Makeup
8. Detail for Income Statement
Skin Service Sales Skin Service Labor
Massage Service Sales Massage Service Labor
Skin Retail Sales Skin Tx Supplies
Massage Retail Sales
Other Income Massage Tx Supplies
Gift Certificate Sales Skin Retail Commission
Massage Retail Commission
TOTAL REVENUE
Skin Retail Products COGS
Massage Retail Products COGS
Freight and packaging
Concierge Staff
Credit Card Fees
TOTAL COGS
EXPENSES
NET MARGIN
10. Income Statement Detailed
Revenues Cost of Goods Sold
Sales Returns and Allowances $ (576.00) 0% COS - Concierges $ 157,581.87 7%
Service Sales - Dental $ 7,226.88 0.4% COS - Esthetics $ 147,106.83 6%
Service Sales - Esthetic $ 382,167.29 17% COS - Hair $ 134,205.28 6%
Service Sales - Hair $ 359,510.50 16% COS - Makeup $ 9,702.68 0%
Service Sales - Makeup $ 14,256.00 1% COS - Massage $ 164,003.28 7%
Service Sales - Massage $ 506,761.50 22% COS - Medical $ 12,507.27 1%
Service Sales - Medical $ 64,206.27 3% COS - Nail $ 93,978.99 4%
Service Sales - Nail $ 284,970.60 12% Total Labor COGS $ 719,086.20 31%
Total Service Sales $ 1,618,523.04 70%
Supplies - Esthetics $ 30,573.38 1%
Retail - Boutique $ 120,203.66 5% Supplies - Hair $ 32,355.95 1%
Retail - Esthetics $ 165,422.00 7% Supplies - Makeup $ 285.12 0%
Retail - Hair $ 47,815.00 2% Supplies - Massage $ 15,202.85 1%
Retail - Makeup $ 24,991.00 1% Supplies - Medical $ 46,002.11 2%
Retail - Massage $ 18,396.00 1% Supplies - Nail $ 19,947.94 1%
Retail - Nail $ 27,884.00 1% Supplies - Boutique $ 57,697.76 3%
Total Retail Sales $ 404,711.66 18% Total Back Bar COGS $ 144,367.35 6%
Sales- Gift C. $ 267,129.83 12% Retail Prod Boutique $ 48,081.46 2%
Events Income $ 5,892.84 0% Retail Prod Esthetics $ 66,168.80 3%
Interest Income 0% Retail Prod Hair $ 23,907.50 1%
Sales - Tax Discounts $ - 0% Retail Prod Makeup $ 7,497.30 0%
Other Income $ 39.91 0% Retail Prod Massage $ 9,198.00 0%
Retail Prod Nails $ 13,942.00 1%
Total Revenues $ 2,296,297.28 100 Total Retail COGS $ 168,795.06 7%
Total Cost of Sales $ 1,032,248.61 45%
Gross Profit $ 1,264,048.67 55%
11. Tracking Revenue
Recommended Retail to Total Sales Ratios
Day Spa Resort Spa
• Hair - 10-15% • Hair - 5-10%
• Skincare - 35-50 % • Skincare - 15-30%
• Massage/Body 1-5% • Massage/Bdy - 0-5%
• Nails - 5-15% • Nails - 0-10%
• Cosmetics - 40-100% • Cosmetics - 25-50%
• Gift - 10-40% • Gift - 5-15%
12. Average Ticket
• The quickest way to
grow sales
• $ service sales + $ retail
sales / # of clients
• Example: therapist has
6 clients who spend
$360 in services and $60
in retail; average ticket
$360+$60=$420/6= $70
13. Ways to Grow Average Ticket
• Service menu presents a range of
pricing options
– Not just $85 and $95
– $85, $88, $92, $95
• Each department has micro tx
available for small fee –
NO additional time
• Add-ons that do take more time
• Retailing
14. Average Ticket Benchmarks
• Should be part of
advancement criteria
• Higher expectations for
longer term of service
• Slow, steady, upward
movement
• Assists with increasing retail
ratios
• Be aware when service menu
pulls it down (waxing)
15. Guest retention: a key to spa success
• Retention is the single biggest
indicator of therapist and spa
success
• If you get them to return,
everything is possible
• If you don’t get them back,
you need to find someone to
replace them
– Even if they come back,
they’ll come back later than
they would if prescheduled
16. Retention is a Team Effort
• Spa Has To:
– Meet or exceed expectations
re facility & amenities
– Be clean and organized
– Practice excellent customer
service at all times
– Offer services, products &
pricing that meet needs of
target audience
– Be friendly!
– Prebook
17. Staff Impacts Retention By:
• Building rapport with
client
• Future-casting at each
visit
• Social styles &
communication training
• Performing consistently
• Giving the client cues
18. Retention Benchmarks
• Typically higher with high
frequency services (hair/nails)
• Impacted by transient/tourist guest
population
• Difference between retained by
therapist and facility
• Slow, steady gains – be alert for
trends in the wrong direction
19. Payroll Breakdowns
• Labor – Your Largest Expense
–Technical Staff
–Hourly Staff
–Management/Salaried Staff
–Taxes & Benefits
–Owner
20. Payroll continued
Service & Retail Revenue 100%
- Management/Support 10-12%
- Technicians Svc 33%
- Technicians Retail 1.5%*
*10% of 15%
- Taxes +/- 4%
- Benefits +/- 4%
Total Payroll 54.5%
21. Payroll Benchmarks
• Average day spa
overhead 40% of
revenue
• So, payroll MUST be
below 60% to see any
profit
• % is focus for you, $
earnings should be
focus for your staff
22. Utilization/Productivity Rates
• What do you really sell?
– TIME!
• # of appointment slots
sold/# of appointment
slots available
• Example: open 9-6 with
one hour appts – 9 slots.
You book 5 slots,
utilization rate 55%
23. Utilization/Productivity
• Hitting high numbers is NOT a
function of your schedule, a
function of your geography
• Can be improved by
– Smart scheduling of clients
– Optimized scheduling of staff
– Opening hours that reflect
demand
– Facility efficiencies
24. Performing a Business
Evaluation
• Identify under-performing
areas
• Work on both revenue &
expenses
• Develop an action plan
• Pick a few key focus points
• Involve the staff
25. Where to Start?
• Is each workstation staffed for
maximum productivity?
• Do operating hours reflect
demand?
• Are you collecting detailed
metrics on client retention
• Is your menu written to support
upselling and micro treatments?
26. Where to Start?
• Are your ratios aligned with
benchmarks?
• Is your compensation plan costing
too much?
• Are you maximizing your ability to
sell all of your time slots?
• Are you tracking performance by
department?
27. $how Me The
Money!
Thanks for your attention!
Questions? Lisa Starr at:
gotalkone@gmail.com
Gramercyone.com/blog
Facebook.com/GramercyOne
