From 2013 to 2015, the global health and wellness industry, of which the day spa industry is an integral part, grew by 11% even as the world economy shrank by 3.5%. And growth has continued since then unabated, as concern for health, wellness, and beauty intensifies both in the U.S. and abroad.
Anyone in the business world knows that risk-taking is unavoidable if you are going to be in the marketplace at all. The only question becomes how much risk and what kind is involved and what level of reward can you potentially expect.
The many franchise opportunities in the day spa industry offer a formidable risk-reward “ratio” that entrepreneurs do well to pay attention to. Here are some of the factors that make a day spa franchise a relatively safe investment:
1. The industry is strong and growing.
The spa business industry is trending upwards in the U.S. economy, as more and more people are discovering the benefits a resort-like, local day spa has to offer. Not only full salon and nail services but a full line of certified 100% organic skin care products and even masseuse services are often all in one convenient location. Many have already added the spa experience, once thought too “exotic” for the average person, to their weekly or monthly routine, and the indication is we have not yet reached equilibrium (meaning, there is plenty of room for creating new spa customers, not only for winning them from the competition).
2. Franchises fare better than new start-ups.
Overall, franchises have a much higher “survival rate” than start-up businesses. This minimizes your risk of having to close your doors not long after opening them. And the preexisting (and often very loyal) customer base of spa franchises allows you to rapidly reach your potential, whereas, start-up spas often struggle for years to build a comparable customer base.
Additionally, the proven business model, access to top-tier products and equipment, and educational and support opportunities that franchises provide give you an invaluable “edge.”
3. Multiple revenue streams increase stability.
The expansion of the day spa industry has meant more than merely more locations and more customers, it has also meant increasingly diversified offerings. And to a business investor, that means greater stability due to a reliance on multiple instead of a single revenue stream. Beauty, grooming, and body maintenance are all found huddled together under one roof, and top of the line skin care and other products for sale supplement your cash flow. Day spa franchises will have a full-orbed approach built into the system, making it easier to achieve this desired revenue stability.
4. Multi-unit franchising opens the door to future growth.
The first day spa franchise you open will involve you in a lot of new territory. There is the financial preparation, the formation of a viable business plan, the review of the FDD (franchise disclosure document), and the franchise-specific training. Then you will need to acclimate, with assistance from franchise HQ, to actually running your day spa from day to day. But once this experience is all under your belt, and your first location has reached its full potential, it will be much faster and easier to add new locations in the same manner. And you can often manage multiple locations with little additional staff, maximizing your ROI.
5. A large talent pool from which to hire your help.
A final factor to consider when starting any type of business is the relative availability of adequate experienced talent of interested entry-level workers. With the day spa industry, there is no shortage in this regard. You can usually find enough of the right kind of staff regardless of your location. And as many spa workers are forced to work 2 or 3 jobs, you could easily capture the best talent by offering them a single job that meets all their needs. Remember that the quality of service you provide, the total customer experience, will depend as much on your chosen staff as on your choice of franchise — so it is critical that your resources are adequate in this area as well.
In sum, we can say that the day spa industry and day spa franchises, in particular, offer high potential rewards with relatively low risks. Wise decision-making and hard work will be a necessary part of the equation, as in any business venture, but the resources and opportunities are there for the one willing to take some measured risks in pursuit of potentially great rewards.