Taking the Plunge

Many of today’s spas grew from full-service salons whose owners recognized their eat business potential. But like any new business venture, adding spa services in any substantial way to your salon requires careful planning and a significant financial commitment.

“Day spas have become part and parcel of full-service salons,” says Philip Cirruzzo, manager of La Carezza in South Hampton, N.Y. “When you have a successful full-service salon it’s easy to add on because the majority of your clients are already getting the spa services elsewhere. Converting to a spa allows clients the luxury of getting additional beauty services under one roof,” he explains. That confidence in day spas and the desire to improve the salon’s layout were why a 2,000-square-foot day spa was added to La Carezza. “We chose to keep the spa’s decor the same as the salon’s,” says Cirruzzo, who describes the look as free and easy, smooth and dean, airy, and natural-looking.

“The beauty industry is no longer just about hair, nail, and skin care; it’s about health and wellness, too,” explains Susan Constantine, co-owner of Snobz ASalon and Serenity Day Spa in Longwood, Ha., of her and her partner’s decision to add a spa to their existing salon.

“Many salon owners want to know how to integrate spa services into an existing space,” she continues. “We already offered facials and massage, but to make it a spa, we knew we had to offer water treatments.”

Those First Few Steps

Before you start building your dream spa, there is a lot of number-crunching and planning that needs to take place on paper first.

“Do your homework,” says Steve Cerf, who owns Metropolis Spa and Salon in Princeton, N.J., along with his wife Terry. “You need to know what services are in demand in your area and whether you can support the cost of opening and maintaining a spa. By just focusing on expanding services that are common in full-service salons, such as massage and facials, owners tend to miss opportunities for other therapeutic treatments such as hydrotherapy.

“Also keep in mind that additional inventory of spa products, such as seaweed masques, essential oils, and body scrubs, generally runs into thousands of dollars,” Cerf continues. “Most salon owners are unaware of this until it is too late, and most do not include new prod­uct lines into their budgets.”

“We knew we wanted a day spa, but didn’t know how to create the environment,” says Constantine, who did a lot of research on spas beforehand. So she hired a consultant who worked at a well- known spa and followed this sound advice from a friend: “Find out what a successful spa is doing and do what they do, and you’ll get the results.”

Whether or not you hire a consultant, visiting day spas in other major cities is a must to see how the services are done and to get ideas before adding your own spa. Seeing firsthand a successful spa in action gives you something to aspire to.

Before he plunged into the spa business, Kenneth Anders, owner of The Spa at Kenneth’s in Columbus, Ohio, also hired a consultant. “Consulting eliminates the risk and saves you a lot of mistakes along the way.” At first, Anders only wanted to add a facial room and a massage room, but he was advised by his consultant that if he wanted to do it right he had to go all the way and include water treatments. “I realized that I couldn’t just get my feet wet, but had to jump right in,” he says.

Cerf also hired a consultant. He spoke to several consultants, then chose one based on the good reputation of the spa where she worked. The quotes he received for consulting fees ranged from $l,500-$3,000 a day, plus expenses, but he is quick to point out that a consultant is well worth the investment.

Prior to hiring a consultant, Constantine recommends putting together a business plan outlining expenses and liabilities and income projections on each service you plan to provide.

Your business plan should also include a complete market analysis—how you’re going to attract clients to get a return on your investment and what type of client you want to attract. (For more information on writing a business plan, see “Building a Better Business Plan” in die December 1996 issue on page 60.)

It’s also important to know what type of spa services will appeal to your clients. “If you want to cater to the spa market then you have to add the right services as well as give clients what they envision,” says Anders. When it came to water treatments, Anders chose Vichy showers for his spa instead of hydrotherapy tubs because he believed his clients would be more receptive to the service —it was an easier concept for them to understand.

Getting the Ball Rolling

Once you’ve done the preliminary work for your spa, the construction process begins. Whether you decide to add on to your existing salon or relocate altogether, there are pros and cons associated with each.

“Look at what you have and figure out the cost of renovating your present location versus how much it would cost if you moved. Taking a chance is what being an entrepreneur is all about,” says Peter de Caprio, director of operations for Noelle Spa for Beauty and Wellness in Stamford, Conn.

“Adding on is a smart way to find out how good you are at the business,” he says. “You already have a built-in clientele and you can slowly integrate spa services. As you grow, you can change your marketing approach. It’s a nice way to evolve and it enables you to build your business.” However, it’s more difficult to design the add-on area as a total spa, especially if you have space limitations, which can limit the amount of services you offer, says de Caprio.

That’s why one of the main benefits of relocating, he says, is that it gives you the space to create the spa you want The unknown factor, though, is whether your clientele will remain loyal. “We stayed in the same place and expanded because we had established a good name for ourselves, had a prime location, and everyone knew where we were,” says Constantine. She and her partner gutted the space adjacent to their full- service salon and added a 3,000 square- foot spa. Building the spa from the ground up took about six months and cost approximately $350,000, says Constantine, who hired a spa designer/space planner, a general contractor, and an architect to get the job done. In addition to construction costs, remember to budget for marketing the spa services, such as advertising and printed materials, as well as throwing a grand opening party, she says.

Cerf remained in the same shopping complex, but moved across the courtyard to open Metropolis Spa and Salon, which consists of two levels: the 3,250- square-foot salon on the first floor and the secluded 2,000-square-foot spa in the basement.

Construction cost of a day spa can be staggering, especially if you want to have a totally separate spa environment like Cerf did. The only way to do that effectively was to relocate, he says. “We didn’t want to fit a square peg into a round hole.” Sure, the advantages of adding a spa to your existing location is that everyone knows where you are and costs are lower because you usually have existing plumbing and may only be doing cosmetic work, says Cerf. But the downside is that you may lose that true spa feeling and end up having the salon chaos intermingled with the spa serenity. Also, you’re dealing with the noise and mess of construction while keeping the salon business going and may miss things because you’re in a rush to get everything done, he adds.

“We had to completely redo the basement because there was no electricity or plumbing and we had to add a separate HVAC (heat, ventilation, and air conditioning) unit for separate control,” says Cerf, who adds that the final construction charge was approximately $50,000 higher than the original estimate. He explains: “Many contractors underestimate their work and then try to increase their price through overrides. For example, they’ll tell you that you need extra ventilation or that the sink needs upgrading. But some additional costs can’t be helped. You originally have a blueprint, but as you start developing the spa, you’ll have to change things around, such as move one room to the opposite side of the building, which means you have to re-route the plumbing and re-track the lighting.” Cerf also had to upgrade the plumbing in the salon as well as demolish the interior and start from scratch.

“We created a full-service salon and a day spa from the ground up in the past two years. In both situations, the total project cost exceeded my original budget by more than 200%. This can put an end to a project in mid-stream or even cause bankruptcy,” warns Cerf.

But for him, converting from a salon to a day spa has been advantageous. “Our overall business has increased more than 80% since our expansion. Our existing salon business has increased our spa business, and our spa business that we obtain from our gift certificate sales helps to increase our salon business. It’s a win-win situation,” he says.

Unlike Cerf, Anders chose to stay at his location, and added a 3,000-square- foot spa to his 15,000-square-foot salon, which is located on two acres of land. The construction work didn’t disrupt salon business, says Anders, because a wall separated the salon from the spa and everything was being done outside. It took seven months to complete the project, and the grand total was approximately $500,000, he says.

The neo-classical design of The Spa at Kenneth’s employs a neutral color scheme. Beige textured wallpaper, an abstract leaf-patterned carpet in grayish-brown, and natural wood furniture create a soothing environment for spa patrons.

Whether you decide to relocate or add on a spa, as these salon owners have found, yes, if you build it they will come, but make sure you have the finances and know-how to build the spa of your clients dreams as well if you want them to stay.