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Spa Industry Statistics - Assignment Example

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This assignment "Spa Industry Statistics" takes a look at our current situation and how we can improve our competitive edge. The report will take a look at a SWOT analysis for our company and make recommendations based on that SWOT analysis…
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Spa Industry Statistics
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Lesson 7 – Executive Summary This report will take a look at our current situation and how we can improve our competitive edge. The report will take a look at a SWOT analysis for our company and make recommendations based on that SWOT analysis. Currently the company has room for improvement in the areas of Reporting & Cash Management as well as Spa Operations Management. We need to have better systems in place for all of them. Our current situation is dire in that we did not make a profit last year but instead loss money. We are not able to pay for renovations and expansions if we do not make a profit. The following suggestions are discussed in depth in this report. Budget Planning Budget Process and Procedure Complete set of financials including but not limited to: P&L, Balance Sheet, and Statement of Cash Flows Better recordkeeping Enhanced Computer System Employee Time Tracking Appointment Book Lowering our Indirect Costs Better use of the lobby other than selling retail products Moving our retail sector to a web based system Better way to market our products to our customers Understanding our customer better Current Situation We are under budget on revenue and over budget on expenses. This means that we are under budget on the profit. We do not have a balance sheet and the accounts on our Profit & Loss report are general accounts at best. There is no record of what types of appointments the customers are requesting instead we know the quantity of them but not the quality of the appointments. We have a retail area that accounts for a small percentage of the revenue. We do not know how long customers are here for their appointments so instead we guess at it. Strengths We do not suffer from seasonality therefore we have a steady stream of clients coming in all year round. This opens up a great opportunity for us to track repeat customers as well as new customers. We have the privilege of having great name recognition within the community which helps us to get repeat business. We also do not have any direct competition and this helps us to constantly keep a steady flow of customers coming through the doors. Weaknesses Our main weakness starts with our inability to track our clients and our personnel. We do not know what type of massage our customers want until they are in the room with one of our therapists. This makes it difficult to decide which types of massage to offer and not offer. It also makes it difficult to determine prices for each type of massage. Opportunities We have the opportunity to cross sell our customers if we were to improve our methods of reporting information. Our retail sales could increase if we were to focus in on our customers’ needs by keeping better records of each one and what they request while they are here. We could also use this information for marketing any new services. Threats Another spa could come into our area and take over our customers by offering more services and better customer service. Recommendations Reporting & Cash Management We need to have a better grasp on the budget. Our numbers are way off and we need to get a better idea of what our projections should be. Our projections should be based off our prior year along with some growth built in. We need to come up with a process that will help us to determine how much revenue we will make as well as how much in expenses we will incur. We need to have a balance sheet as well as a statement of cash flows. The balance sheet will help us to see what assets we have and how well we are using them. The statement of cash flows will show us where our cash is being spent as well as how well cash is coming in. We should have a complete set of financials so that we can analyze the company from all aspects. Spa Operations & Expense Management Our staff needs to have a schedule of their working hours. Each week we need to develop a schedule for our staff and computer software can help us with this. This will help us to utilize labor more efficiently. We do not know when our technicians are on the clock therefore, we are not able to determine how many supporting staff members are needed to serve our customers well. This is also a root cause for our high indirect labor costs. Our indirect costs are very high and this is due to having too many people on the clock at the same time. If we regulate this better we can lower our costs significantly. If we set up a system to determine how many support staff are needed for each therapist and facial personnel then we can determine a more efficient work schedule. We need to have a better computer system where we can tell what kind of services our customers are requesting. We can use this information to market our retail products to our customers. The system could integrate our appointments and to assign our clients to specific personnel. This way we will know who is doing what and who can handle other customers. We could also use the system to gather more information about our customers so that we can determine if they have needs that we are not meeting. This could begin with something as simple as a written appointment book. We can keep track of all customers as well as the usual time they have their appointment and what type of service they require. This will allow us to cater to their needs better. We also need to channel some money into staff development and training. This will help everyone to become more efficient with clients and towards each other. We will develop a budget schedule. The Spa Director will speak with the staff to assess their needs and to include as much of it as possible into the next year’s budget. The budget has to be based upon prior years’ numbers along with a percentage of growth factored into it. Inventory Management The retail aspect of the company should be moved to an online only system. We have some retail sales but they are not significant enough to justify the use of the lobby space. We can use the space that the retail section currently occupies for more lobby space. We could also use this space for a children’s area. The space could also be an area where we can serve cappuccino and other kinds of beverages to our clients. We could make this space more accommodating for our clients and to make them more comfortable while they are waiting. We should also use the computer to track the time that customers are here for their appointments. Bibliography Brown, Anitra. Spa Industry Statistics, 2007. 11 November 2011 . International Spa Association. ISPA Releases 2009 U.S. Spa Industry Statistics. 11 November 2011 . Register, Julie. 10 Lessons on How NOT to Run a Spa. 29 April 2007. 11 November 2011 . SalonBuilder, Inc. Keys to Running a Successful Salon or Spa Business (Part 2). 2011. 11 November 2011 . Vohwinkle, Jeremy. Budgeting 101. 2011. 11 November 2011 . Read More
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