Year-End Business GUIDE
Year-end Review
The Ultimate Checklist For Spa Teams And Solo Estheticians
Goal Setter, Goal Getter
5 Tips To Help You Amp Up Your Biz In The New Year
Spa business coach Kirsten Foss of Kirsten Foss Coaching is here to emphasize why looking back on the last year of your spa business is the only way to determine a clear, strong, and relevant growth initiative that will support your spa business in 2021. Otherwise, you could be making decisions that waste time, energy, and money!
The biggest pitfall Kirsten sees while coaching spa business owners?
“What I notice the most about spa owners who sit down for yearly planning days is that they want to dive right into setting goals and planning: buying new equipment, building a time, adding a skin care line… the list goes on,” she says. “The issue is that they’re missing out on the critical info they need to make these decisions, like reviewing their year-end data to set better financial, staffing, and growth goals for the upcoming year. Clear goals lead to higher-level strategy and efficient implementation. In the spa industry, especially, not reviewing your past year’s data dooms you to repeat a frustrating business pattern year after year instead of building on your spa’s successes.”
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So which aspects of the previous year should spa owners prioritize analyzing when building their year-end checklist?
• Sales
• Staffing
• Treatment Menus
• Inventory
Kirsten breaks down the action steps required for each section of your year-end checklist— regardless of whether you’re running a team or are operating solo!
What you’ll need:
1. 2020 sales & service metrics YTD (yearto-date) to compare to 2019’s numbers.
Action steps for this section:
1. Enter historical metrics and sales into your spreadsheets for a streamlined, at-a-glance document to refer to during your planning (and throughout the year!) Pro tip: document your metrics at the end of each month to systematize your metrics’ tracking so you can course-correct quickly after monthly analysis.
2. Create a 2021 financial and metrics goal based on your YTD and 2019 numbers for context. A common hurdle for spa owners is not focusing on sales goals in previous years and lacking context for upcoming years. For an example of context, the expected projected growth rate for spas between 2020-2027 is 5.2%.
3. Include a goal objective. It is too easy for a spa owner to go off track and make goals without attaching them to a specific objective. Before goal-setting, ask yourself, “Why am I making this change?” Be specific so you can create specific action steps to get you there.
4. Bonus step: how often do you meet with your bookkeeper or accountant? If you don’t already schedule a meeting before the end of each year to review your numbers, it’s highly recommended that you do so moving forward to stay on top of your statements, profitability, and sales goals as your spa business grows.
What you’ll need:
1. 2019 & 2020 YTD spa service metrics spreadsheet containing individual serviceto-retail ratios, spa productivity, pre-booking statistics, average ticket price, and median client retention.
2. Team reviews and analyses.
3. Training reviews.
4. All manuals.
5. An administrative time analysis.
Action steps for this section:
1. Go through all individual staff metrics spreadsheets, performance reviews, and staff files to determine individual strengths and weaknesses. This is an opportunity to add performance reviews to staff workflow if you have not already integrated them. Consider recruiting to replace problematic staff members, retrain staff members on a newly-updated protocol, and decide a timeline for expanding your team in 2021 (if it would benefit your spa’s growth.)
2. Review all existing team manuals, including staff handbooks, operations manuals, and all supporting documents to ensure that they are relevant and up-to-date. Remove and add sections as necessary.
3. If there are any changes to team manuals, make a note to update your team at a team meeting to review what has been added and/or removed. All staff members should re-sign the manuals’ acknowledgment pages.
4. Review your staff’s training program steps and supporting documents. Add and/or remove sections that will make your staff’s training program more streamlined and effective.
5. Both team and solo entrepreneurs often forget that they can and should delegate or outsource much of their “low level” admin tasks like social media posts, writing emails, or responding to client calls via email or phone. For Solo’s, consider how a Virtual Assistant can ease your workload. For spas with teams, are you hanging on to tasks that you don’t need to do but have been continuing out of habit? Time to delegate them to your Guest Services team!
What you’ll need:
1. Your existing treatment menu.
2. Service data from your spa booking software, which should include the service “pie” (i.e., specific top services, specific bottom services, and everything in between.) Generate one report on the whole year and one report for each month to determine seasonal changes. Use the seasonal reports to help you plan out your monthly marketing in advance! The majority of spa owners wait until the last minute to determine what to focus on in their monthly marketing.
3. A cost-per-service worksheet if one hasn’t already been created.
Action steps for this section:
1. Determine which services will be added or removed this upcoming year and why. Pro tip: when in doubt, before scrapping poor-performing services consider if there are aspects of the service or the marketing around it that could be improved.
2. Pause before adding new services based on a handful of clients requesting them. Instead of immediately implementing the new services, keep a tally of the inquiries each month to ensure that there is lasting interest in them.
3. Do consider adding services that are a part of your spa niche and that you are passionate about providing. Your passion for them will help launch and sustain their growth.
4. Ensure that you have determined all costs-per-treatment for each service to guarantee that they are and will continue to be profitable; This is one of the most common epiphany moments coaching clients have when it comes to understanding their cash flow.
5. Use this as an opportunity to add or remove services depending on the niche you are currently in, and if you are considering changing your niche to attract a different or broader client base.
What you’ll need:
1. Inventory data (specifically bestsellers and slow-moving stock)
2. Retail-to-service rations
Action steps for this section:
1. Determine which products are slowmoving or dead stock. Analyze if this is due to a disconnection with services, if poor performance is to blame, or if your spa or spa staff are not following sales protocols. (And if you don’t already have sales protocols in place, then take this opportunity to implement them!)
2. Create packages that bundle slowmoving inventory with top-sellers to give them a sales boost.
3. Analyze your past year’s inventory flow and project ordering trends for the upcoming year.
4. Schedule an accounting end-of-theyear inventory count to ensure your inventory value is accurate for tax season.
While accounting for your spa business, marketing, equipment, facility, and tech are also essential factors to track yearly. Start with the non-negotiables above from Kirsten Foss Coaching to make 2021 your most profitable year yet.
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