As is true for any small business, the location of a Spa is paramount to its success. Here are some tools and data that can help you determine a good location for a Day Spa.
1. Find locations where there is a healthy demand for Spa Services.
Since the past several years, folks have been searching the internet to find a Spa. They tend to search for terms like "Spas", "Day Spa" or terms for specific Spa Services such as "Massage parlors", "Facials" etc. Some of the search engines make this data available. Studying this data will give you a good idea of the demand for Spa Services in a location.
The chart on the right labeled "Top metros for Day Spa", shows the major cities where the demand is relatively higher.
Note: Can’t see the chart on the right? Try reading this article in Firefox.
The Data is based on the State of your current location, which is determined based on your IP address. You may choose a different location by going to Google Trends. You can also drill-down to see the relative demand in areas around the major city of your choice.
2. What is the trend in demand for Spa Services in the area?
Once you identify an area with good demand, study the search trends displayed in the chart labeled "Interest over time". These line graphs represent the interest in the search terms "Spa" and "Massage Parlors" over the past 12 months in your current state. If the graph is trending upwards or somewhat flat, that’s a good indicator of growth in demand or steady demand. If it’s trending downwards, it does not necessarily mean that the demand is dropping, rather it indicates that the number of searches for these terms relative to other search terms is dropping. As long as it is not dropping drastically you should not rule this location out. On the other hand if it is trending upwards, then the location is very likely a good choice for a Spa business.
Get access to the Census data and see if the population of the desired demographics in the area is increasing. This will help for longer term planning.
Identify if there are some good demand generation opportunities in the area that can help increase demand.
3. Does the location’s demographics match the desired demographics?
First identify the demographics of typical users of Spa services. After some basic research on the internet, I’ve identified some representative demographics of Spa Goers.
70% - 80% of Spa Goers are Female and 20% - 30% are Male.
The bulk of them are between the ages of 20 and 60.
Average annual income ranges from $70,000 to more than $120,000.
Check if the demographics of the location of your choice match those of a typical Spa Goer. The chart on the right titled "Age and Gender Demographics" is an example for a certain location. I plan to provide a tool where you can get something like this soon, so please add this article to your favorites and check back soon. If you need to find out sooner, feel free to connect with me on LinkedIn and I’ll provide what I can.
If there is a good match between these two sets of data, then the location is good for a Day Spa business.
4. Who are the competitors in the area?
Increased competition can adversely affect your Spa’s profitability. Use this site to find out how many Day Spas there are in the location of your choice. By the way, I own this site. You can browse Day Spas by city, or search by zip code and/or city. On the map you can see where they are located visually. This should show you all the competitors in the area. While you are at it, create a business profile for your Day Spa on this site to get some free exposure.
5. Opportunities to upsell personal care products?
Typically Day Spas sell retail products for personal care such as skin care products, hair care products, massage oils etc. Check the local retail stores for availability of these products and pricing. If they are not available conveniently, this is an opportunity for you to upsell personal care products. Identify wholesalers in the area where you can source these products at wholesale prices.
Selling gift cards for related services such as Yoga Classes and Gyms is another option. You can find out how many such businesses there are by visiting the corresponding sites. Contact them to see if they would be interested in co-marketing.
6. Marketing and Promotional Opportunities
Local businesses whose customer demographics match those of Spa Goers offer a great opportunity to market your Day Spa. Look for Hair and Nail Salons, Gyms, Yoga Studios and the like. You can work with them to co-market your businesses. You can develop demand generation programs that are mutually beneficial.
Local websites also offer advertising, guest blogging and press release services. You can reach local audiences effectively through them.
Since there are quite a few folks searching online for Spas, Massage and related services, you can also start an online marketing campaign. Search advertising on Google, Bing and Yahoo, search engine optimization of your website are some very effective ways of getting new business. If you’d like a professional to setup your campaigns connect with me on LinkedIn and I’ll be happy to do it for you.
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7. Ability to hire employees
Just as increased competition can put a dent in profitability, the inability to hire and retain good Estheticians, Massage Therapists, Stylists and other skilled professionals can also hurt the revenue of a Spa. You will need to offer competitive salaries and actively look for replacements. I compared the salaries of various spa positions which I think you’ll benefit from.
8. Availability of Commercial Real Estate & Cost
Last but not least, check if good commercial retail spaces are available in the area. You will probably need upto 2000 sqft. Find out the lease cost and terms.
I hope you enjoyed these guidelines and tools help you identify an ideal location for your Spa.
I’d appreciate it if you would share this article with folks that might be interested in it.
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