How to Start a Day Spa (Beauty Therapy) Business from Scratch

If you're starting a day spa business from scratch, then this episode of Fix Your Business is definitely going to be for you. We'll be talking to a business owner about how she grew her day spa business to 6 figures in less than 12 months. Well, good morning everybody. If you are interested in starting up a day spa business or a service business in general, we've got a really exciting episode of Fix Your Business this morning. So I'm your host, Robin Waite. For those who don't know me, I'm the founder of Fearless Business, which is a coaching practice for coaches, consultants, and freelancers. I've got a really fascinating guest with me today, Laura. She comes from a teaching background, but recently purchased or got involved with a day spa business in her local town. So welcome to the show, Laura.

Hi.

Don't be nervous. I'll treat you nicely. I think you've seen some of the other episodes. So to kick things off, just give us a bit of a background. So the business you kind of inherited a couple of years But talk to us about how you came to be sort of the owner of that business.

So yeah, the business is 2 years old, or was 2 years old in June, and I was approached 2 years ago by a friend who was currently running the spa, who didn't want to be in a spa anymore. Makeup was her passion and she was going off to do that, and I wasn't necessarily happy in my teaching role at the time. So I was looking to cut my teaching hours and I thought, why not? Spa's been my background, I've always been a spa therapist. I just thought now is as good a time as any to make the jump and inherit a business with some employees and hit the ground running.

So you've been running it for 2 years now, so what sort of challenges have you come up against whilst you've been running the business?

Staffing has been a big challenge, and I inherited some staff along the way, so it was all working together to change them to how I like to work, making sure they were trained in relevant treatments, and kind of putting us on the map really. Because of where we're based, a lot of people said they didn't know where we are, and they still don't know where we are or if we exist. So yeah, just trying to put us on the map, have passionate, hardworking therapists that want to work.

Because it's, I mean, I work with several sort of not necessarily spa-based businesses, but medical aesthetics business, therapy-based businesses, basically. And it is a bit of a grind. It is an industry which is known for kind of working people really, really hard. Hopefully you're not one of those bosses, and actually your staff enjoy working there. And kind of, you know, despite the limitations which you talked about. So you're actually based out of a sort of gym leisure centre, aren't you, at the moment?

Yes, yes, sports centre, leisure complex.

And what would you change?

I would change probably the area I'm in, and probably within a community-led sports centre, I would like to change that.

Yeah, and I know you've got plans, so the organisation who you're currently— you know, where your business is currently based, They've just purchased a— I don't know if we're allowed to talk about this live, but they just purchased a new complex which potentially you've got the opportunity to kind of go into. One of the things we discussed offline was, you know, have you got a backup plan? So if that falls through, because we're going to dive— I think we're going to dive into some of the nitty-gritty now. So I was looking at your turnover for the business, which you kind of mentioned fluctuates between sort of £6K and £10K a month roughly. You've kind of reached and breached that threshold, which is actually a really big milestone. A load of people panic over that. and worry about, oh, now I've got to charge my clients 20% more. Well, actually, no, you don't, because when you factor in, you know, costs and things like that, which generally you probably have to pay VAT on, actually it kind of works out that you have to charge a little bit more, but actually you save a bit as well anyway. So that's a big milestone to get through, which you should congratulate yourself on. However, however, this is where we get into kind of the nitty-gritty side of it. So you have a part-time therapist and you— sorry, 2 part-time therapists, 1 full-time. So let's call it 2 full-timers. Plus yourself, you know, and your lavish lifestyle which you've got to fund. $6K to $10K is quite low in terms of having a team of sort of 3 people to cover the cost for. And really the way I look at it is for every full-time member of staff in a business, you should be pulling somewhere between $6K to $10K a month out per full-time employee. So hence the reason why I said off air that really your turnover should be doubled. So What we're gonna do is we're gonna work out how we can get you to a point whereby your turnover is double what it currently is. So would you say the spa, I mean, obviously there is a crisis going on at the moment, pre-crisis, would you say that the spa was operating at full capacity?

No. So we operate, because we do all general beauty and some aesthetics as well, we kind of are a salon and a day spa. So naturally the spa packages would be on the weekend and Thursday to Sunday, and then we would be that general beauty salon for the rest of the week. However, pre-COVID, that was changing and spa days were filling throughout the week as well. But no, we definitely weren't to capacity.

Okay, talk to me about the difference then, for the viewers' kind of knowledge, what's the difference between beauty therapy treatments and a spa day?

So all of your general beauty treatments— manicures, pedicures, waxing— we have a lot of regular clientele and members, local people that come in, just have their treatments and leave. They just have their beauty treatments and they go. From a spa day point of view, it's mainly new people and they're coming for an occasion. It might be a hen party, birthday party. They will come at 9 o'clock in the morning, let's say, and won't leave till 4. So they will use the wet facilities, so sauna, steam room, jacuzzi. We have a relaxation lounge, they'll have some lunch, they'll spend the day in their robe, and then they'll have a treatment. So that is— to be fair, the spa is probably the least cost-effective side of the business because you almost need a spa host. You need somebody there to entertain them, to make them tea, make them coffee. And I kind of pay a charge for them to use the wet facilities as well. So out of whatever I charge them, I give the organization some on top per person.

If I wanted to come and have a wax or a manicure, how much would I on average, you know, and this is like very— I say the word average, it's broad brush, but how much do you kind of— your average client who comes in just for the beauty treatments, how much do they spend?

Our average spend per client, I did do this little activity a little while back, it's probably only about Between £27 and £35 per person.

Cool, okay, and then what about for the spa?

So depending on the package, they'll either spend £40, or if they come as a couple, they'll spend £180. And they vary beyond, say, the £40, for example, you only get a 30-minute treatment. The £180, you both get 2 hours of treatment. So they vary in treatment time.

So that feels to me quite Cheap. You know, I think about— again, this is probably now an indication of my lavish lifestyle, but when we haven't got a crisis going on, I do occasionally treat myself to— we've got a couple of nice places up here. There's one called Calcott Spa up near Tetbury, and, you know, I'll go up there and have a 60-minute massage and spend £110, you know, which is okay. If you take your £40 for a 30-minute treatment and doubled it, there's still an extra £30 sort of legroom there, you know, which is close to— it's like 40-50% difference in price points there. So talk to me about what's going on there. Why couldn't you charge a little bit more for what you're doing?

I think a lot of the stigma is around our area and how affluent the area is. And when I inherited, you know, that package was £35. So as I said to you earlier, you know, I changed a lot when I took over— the name, the products, Everything, everything ran differently, and I kept that the same for the sake of the clients. I thought, I don't want to have this lovely new spa and no clients. Yeah. So that was a contributing factor, the area. And yeah, I'd like to be able to charge more and say it's an experience, and because it's worth more for me, it's worth more.

So I was going to say, somebody who's paying £40 for a 30-minute treatment will pay £50 for a A 30-minute treatment. Okay. It's what we kind of— things are always much worse in imagination than they are in reality. So you'll build up this story that, you know, oh, if I put my prices up, people will just leave in their droves. That's actually not a bad thing, by the way, and I'll explain why in a second. I'm gonna go on to a screen share in a moment. But actually, the reality is whenever I've gone through a price increase with a client, the numbers are never as bad as they think they are. The number of clients leaving is never as bad as they think it will be. And also, you've mentioned for the spa, for example, it's mostly new clients who are coming through. you know, who haven't been exposed to a course.

Yeah, don't get me wrong, we have some returners that come back regularly and, you know, as often as they can, but it is mainly new people.

Yeah, so I'm just gonna start off by just sharing with you, this is an associate of mine, he runs a business called the Techtoner Partnerships. One of the chairmen of the Chartered Institute of Management Accountants, and they did quite a big study around What happens when you increase your prices and what happens when you offer discounts. So if we were to look at, and probably a business like yours, I would say the gross profit, once you've paid for your expenses over— your expenses and your direct costs, i.e., your employees per treatment, your gross profit, I bet, is probably somewhere between 30% and 35%. So if we were just to look at even a 10% price increase on a 35% profit margin, gross profit margin, you've actually got to sell 22% fewer of the same thing to make the same profit. Okay? So a lot of people assume that if I put my prices up by 10%, I can only afford to lose 10% of my clients. Well, actually, it's not true. You can afford to lose a lot more. So if you were to go from £40 to £50, for example, for your basic package, spa package, you know, that's actually a 20% increase. So if we were to kind of come down here, you're talking about somewhere close to— you could actually have 40% fewer clients coming through the spa and still make the same amount of money. Now I can guarantee that you won't have anywhere near close to 40% or fewer, you know, clients. It might drop by 10% or 15% or something like that. It won't be anywhere near close to 40%. So actually you end up, you don't just end up making 20% more, you end up making like 30, 40, 50% more profit on the bottom line. So if we were to extrapolate that out, and I'm kind of, you gave me some figures beforehand, you talked about your profit margin of being about £3K for the first financial year that you're in business. Probably by the time we were to take into consideration just a simple 10 or 20% price increase, we've probably just doubled or even trebled your profit there. with one decision, one key business decision. And actually, one of the things that probably you are worried about, I'd imagine, correct me if I'm wrong, is about perception. What are people gonna think of you for increasing your prices, especially if you're in an area which you feel is slightly depressed anyway? I bet you're worried about people, you know, badmouthing you. Laura's profiteering, she's just after our money, and all this kind of stuff. Do you want people like that in your business as clients?

No, probably not.

Right, really, really important to recognize that, and I'll explain to you just a little exercise which we will kind of walk through now just to illustrate or highlight the point. So I call it the— it's called the PITAF chart, and you may have seen me talk about this before. It's harder for your business because you're gonna have lots of business paying in small chunks, But you'll get an idea about sort of where we're going with this. And essentially all it is, is it's what we call a qualifier matrix. So on this, this bottom side of things here, we're going to have their pain in the ass factor score on a scale of 1 to 10, 10 being they're a massive pain in the ass. They don't appreciate our value. They moan and bitch about stuff. They can, you know, they complain when they, when things are running slightly behind or, you know, things don't go quite to plan or You know, whatever it might be. They're the ones who are kind of like, they'll even ask for refunds despite the fact, you know, you've given them absolutely everything at them. You just don't want clients like that. And then on the other matrix, we've got the amount of money which they're sort of spending with you. And so what we end up with is this group of clients who, let's say for example, so we've got the perfect clients up here who are spending quite a bit of money. They're not really that much of a pain in the ass. We can kind of plot our all of our clients across this chart. We've then got another sort of subset of clients who are, they're not spending a lot of money, but they're also not too much of a pain in the ass. So we can kind of just, we like working with them, they're pleasant, you know, but then they come back regularly, but they have the, they kind of have the lowest, you know, your cheapest treatment like every single time, but it's okay, you know, but they're really good at kind of spreading the word about the business and bringing other people in, so that's great. We've then got other people who spend a lot of money but have massive expectations. And then finally we have the group which we don't really want, who have massive expectations but spend very little. And I'll give you an example of this. So I ran a marketing business where we did web hosting, and I've been through this process with several clients who run similar businesses as well. We used to charge— this is way back, like 15 years ago— £10 a month for hosting for a website. And in the last recession, everybody was driving the prices down like it was a race to the bottom to get all of the clients. And actually, most of those who were competing on price went out of business. Because obviously, if— imagine this scenario where actually we— if our story that we're telling ourselves is we've got to be the cheapest to get clients, but it means actually for every client we bring in it costs us a tenner, we're gonna go out of business. It doesn't make sense. Most business owners operate at, we'll just get by, which feels a little bit like perhaps that's where you're at at the moment. We're just getting by and just paying ourselves enough money.

Yeah.

I think there's a couple of reasons. We'll dig into the values Around that in a second. So we'll just get by. And then you've got other people who are just like, no, no, my business needs me to be a rock because my business needs loads of money in order for it to thrive and not just survive. And in order to do that, I've got to change my own value system so that my business— when I ask— when my business asks for money from clients, it asks for a lot of money. I'm not comfortable asking for a lot of money, but my business doesn't have a problem with it because the business needs to make money. That's what a business is. But what we did, so everybody drove the prices down. I went the opposite way. I 5x'd our hosting plan. We added a couple of extra things in. So a bit of extra support and things like that. So we went up to £50 a month. So we 5x'd our price, right? Big difference. And my business partner was throwing his toys out the pram. Couldn't possibly do that. International sign of distress, right? What happened was interesting though. Our revenue went up 2.5 times. We did lose 40% of our clients. You know, it's a big chunk, but we 5x'd our price. Those that stayed, really valued the service that we were offering. Our support calls dropped by 80%. So we had a cacophony of, you know, pain-in-the-ass clients that we'd taken on over the years because we thought that was the right way to grow a business that was just utterly destroying our business. And kind of it was a bit of luck and a little bit of, you know, judgment and good timing and the right decision. But we found that out. And actually the ones that did stay but protested, Ended up paying a bit more money, so they kind of went up into that amber area, and over time we could kind of reeducate them about what it was, our own value systems and what our business was all about, and we could manage their expectations. So we could gradually migrate them across into that top left corner. And the same goes for this one. You know, some clients were like, no, we don't want to pay, so we set their expectations. Right, we're gonna move you down a package. You'll still pay the same. We're gonna downgrade your package. But this is what— this is how we want them to behave. So we just kind of retrained them. And then over time, when they saw the value which we were delivering, we could then move them up the packages as their business grew and put them in that top left quadrant. Now with your business, it's much more sort of— it's much more heavily commoditized. Okay, so it's lots of little and often, basically. But even still, a 20% price increase across the board you will see probably in 2 to 3 months' time, you'll see a dramatic increase in profitability of your business. You'll lose a few to start off with. Remember, new prospects, new clients who haven't come into the spa before haven't been exposed to your new prices, so they'll just think it's normal. They'll think, Laura's lovely, we really like the spa, we really want to have a treatment. Oh, you know, a basic, I don't know, manicure, £35, bargain. I'll take 2, please. I think that's called a manicure and a pedicure, isn't it?

Yeah.

Do you know what I mean? So, and now all of a sudden we're making an extra £10 or £20 per treatment that we weren't making before. Multiply that by 100 treatments a month.

Yeah.

Yeah, it's an extra £1,000, it's an extra £2,000. And then so long as you can keep your overheads flat, so keep your overheads where they are at the moment with your staffing costs and obviously direct costs in terms of products, also your premises costs as well, if you can keep those relatively flat, That £1,000 you make up here just drops straight to the bottom line, and you can pay yourself that because you deserve it. You're a business owner, and it doesn't matter whether you put 10 minutes of effort in or 10,000 hours of effort into it. You still deserve it as a business owner because you took that risk. Makes sense?

Yeah, yeah, it does.

I'm curious though, what do you think's driving— and this is a bit of a tricky question— but what do you think's driving this kind of Why are your prices set the way they are?

Probably, I'll have to say I kept them the same as the previous owner and then had a little look around and thought, I don't want to price myself too high because I don't want to have no customers. At the same time, I, I do realize that we are slightly more luxurious. We have amazing facilities, you know, and actually the staff are trained to a really high standard and But there's something, and it's my mental block that isn't allowing me to take that jump. And I'm not really sure what it is.

Well, it's— I mean, I'm not gonna regress you into your childhood, but just so you're aware, our value systems are based on— a lot of it is inherited from our parents. So, you know, a common theme, especially around pricing is— and a lot of people see pricing as binary. So it's cheap or it's expensive. We don't have money or we have loads of money, or it's, you know, abundance or scarcity is kind of how it is. And so think about that from a, you know, when you're growing up in your— not your household, this may or may not be, and you don't have to reflect on this at all. But for example, in my household, I had a big issue around money because there were always arguments about money in the house. The fact that, you know, there was never enough money to go on holiday, or there was never enough money to do stuff on the house, or there was never enough money to pay for school fees, or there were, you know, and it was constant. That's all my parents kind of argued about was money. And so for a very long period of time, I had those issues around money. I inherited it. But actually, what happens is we inherit those value systems by the time we're 3, believe it or not.

Oh.

Now, I don't know if you know many 3-year-olds, but their counting is good, but they're terrible at— their value system sucks because their value system is, mummy, mummy, mummy, I want, I want, I want, and I'm not going to give you anything in return for it. It's just, you know, certainly can't add up. So all of the things that we need as adults, you know, we've actually inherited by the time we're 3. So there's a lot of kind of like unpicking and unpacking that you would have to go through to kind of get through that. Pricing around competition, interesting one. And I know you've seen my video on that. So again, like imagine you've got all of those people who are, you know, doing £10 a treatment and they're kind of very quickly go into business and go out of business. Imagine if we're comparing ourselves to them. and pricing the same as them because we think that everybody else is charging £10 a treatment, so we'll charge that. But they're all going out of business. It's like, it just doesn't make sense. Whenever you price your products, and this is something you can have a chat with your accountant about, you've got to price it so you reach this happy point of equilibrium within your business where it's nicely profitable. And a good profit, healthy net profit margin for a business like yours is going to be somewhere between Probably 15% to 20%. I would have thought probably for more of the spa treatment end of things, I think that needs to be pushing somewhere close to 30%. It's a premium product. So you've got to be really brave with the pricing on that and really kind of find ways to add value as well, like perceived value. That will make a massive difference to your business. And your accountant will be able to tell you like what your net profit is. So if you turn over $100K and you made $3K in the first year, well, your net profit is 3%. Right? So actually, you've got to find ways to make 5 times the amount of profit to get into that nice sort of sweet spot. And like I said, I think if you just added— did a 10 or 15, 20% price increase up, like, you know, you can see your turnover is going to increase by that much in top line. It will just fall straight to the bottom line if you're savvy about it. Now you've got a nice, healthy, profitable business. What can a business do when it's got more money?

Expand.

Expand. Yeah. We've got— we can save, we can— A, we can pay Laura, but also now B, we can put a bit of a kitty aside for doing marketing campaigns to market our more expensive products and treatments. And it becomes this really nice, healthy sort of— I call it the sales cycle of doom with small businesses. So I'll just very quickly— How most small businesses operate is they sell something, they make a bit of money, they then deliver it. And sometimes they then make a little bit more money on the side here, and then it kind of just starts again. And we're just doing this sell, deliver, sell, deliver, sell, deliver. And then lo and behold, we get to the end of the month and go scratch your head. Where's all the money gone? And then we get ill. Now we can't sell. Now we can't deliver. Right? We get better, back on. And this is— and it just continues. And that will just continue ad infinitum. Okay? And the only way to break out of this is to charge more money. Because it's like a, you know, here's Laura at the center of the, like creating a gravitational field. You're setting the prices, so therefore the prices are gravitating around you. If we can just tweak your mindset slightly that we can increase your prices, we can break free of that gravitational field. And now all of a sudden, so we had a time, so this is like— The original amount of time we had, very short, very compressed, busy, frenetic, constant, like, you know. Now all of a sudden we increase our prices, we've got more time to deliver a better quality product, and we make more money on the back end of it. So it makes sense when you think about it to increase your prices.

Okay, now I get—

and again, I don't know if this is a common theme or not— so there's gonna be something which I've called the Dirge of Facebook possibly happening in your business. So do you get Facebook messages where people say, oh, Laura, how much does it cost for manicure?

Yeah.

Yeah. And do you often give them the price there and then?

Yeah.

Yeah. So what's happening is you're allowing them to go do a bit of window shopping. So they're on Facebook. Imagine that, you know, you've got Facebook high street and they're wandering around. They found Laura's business, but they've also found a dozen other, you know, and now they're just going, oh, well, you know, so-and-so down the road is only charging £12. They've got a special offer on manicures, so I'll go there and it's £12. Right? Do you think that— imagine now you own a high street shop and people are coming in all the time saying, is it— how much is it for a manicure? Oh, £25. Okay, I'm gonna go somewhere else. Is that annoying or is it like, are we happy with that?

No way.

So why do we allow it to happen on Facebook? Right. So, yeah. OK. So a good reply to that would be, well, listen, I can— and it's a bit of a qualifier, if you like. So you want to see what you're trying to find out, what type of a client they are. Are they a loyal client who is going to come back time and time again and get amazing value from you and tell all of their friends? Or are they somebody who's just window shopping for the cheapest Cheapest manicure they can find, right? And to be fair, 80% of the people who send you that message, they're just shopping for the cheapest, okay? So I would ask you a question which might— I would ask a question back on Facebook which is like, yeah, of course I can give you a price for a manicure, but I'm just curious, like, what are you looking for in a day spa or in a beauty business?

Yeah.

And they might come back and say either— they'll do one of two things. One, they'll say, I don't care, just give me the price. And in which case you say, I'm sorry, but we're not, you know, I'm not just going to give you the price because we want loyal customers here. The second option is they'll come back and say, oh, that's a really interesting question, actually. Well, one of the things I'm really looking for is just to— I just want to get away and just enjoy like an hour's peace and quiet away from my husband and kids. I'm generalization. I'm assuming it's a woman who's going to be sending that message. There might be blokes who want manicures. Probably are. So, and then we can start something, we can start a conversation basically with that person and start to get— well, actually, listen, I could just give you a price for a manicure and you could come in and have that. But actually, it sounds like you want a bit more of a break. So we do have a day spa as well. But I'll tell you what we'll do. Seems though this is going to be your first time in the spa. Come in and have your manicure. But what we'll do is we'll also hook you up with just a quick 15-minute foot rub whilst you're in here.

Okay.

So you could be the most expensive at, you know, there could— if the average price for manicure is £25, but yours is £40, but somebody then sees the perceived value of something like a foot, a 15-minute foot rub, for example, you know, it's like perceived value is massive. So take my books, for example. If you were to go into Smiths, like WHSmiths or Waterstones, how much would you pay for a book?

£20? £20, £10.

Yeah, you know, sometimes a bit cheaper than that, but £10, £15, £20. That book cost me £1.82 to get it printed off. Okay, so your perceived value of the cost of that book is 5 times or even 10 times higher than what I would pay for it. So the idea of offering somebody a 15-minute foot rub to show them that real value— and okay, so it's 15 minutes you are giving away for free, but their perceived value of that is, well, Are they going to assign another £20, £30, £40 to the price of that treatment? But the key thing is, key thing is we've started the conversation off. That's the top of our funnel. We've avoided the awkward pricing question for now, kind of just put it off whilst we're understanding and finding out a little bit more about our client. And then gradually we can kind of like educate them about how good, you know, your day spa is compared to everybody else's. I can guarantee if you can get that client through the door for their manicure and their free 15-minute foot rub, and you could potentially do them both at the same time if you've got the manpower there. And I would batch them. So I would have it so you've got a group of those, those sort of free gifty type treatments all happening on a Monday morning or all on a Saturday morning or something like that. So economies of scale. So it just makes it more efficient. And you've got an apprentice, so she could be there busy doing those bits and pieces. Like the free, the free, you know, nice-to-haves. I can guarantee if you can get that person through the door, do you think they're more likely to come back again? Or how much more likely do you think they're likely to come back again over the person who shopped around, you happen to be the cheapest, and they said, yeah, I'll book in and I'll come?

Yeah.

Yeah.

That's a good point.

Yeah. So, so now what we're getting into, so I call it the, I call it the basically the 5 C's. Okay? So you, it's like basically just a very simple marketing funnel. So it starts off with the content you're putting out, which isn't going to be anymore. I don't know that you're doing this actually. I should have checked your Facebook page. But so what a lot of businesses similar to yours do is what I call buy my shit type offers. We've got 10 quid off a treatment. We've got 5 quid off this. Come and buy my stuff. Come and buy my stuff. Come and buy my stuff. Okay. Your— what your content is gonna— your content is now gonna be, if it's not that, hopefully it's not that, we want to be using case studies, testimonials, reviews. We want to take little videos of our clients when they come in about like a little 30-second snippet about how amazing your spa is. We want to be publishing that sort of content. We want to be talking about the fact that we don't do offers, but one of the things we do do is we add value. So if you want to come in and experience it for a day, just come and have a chat with So we're kind of starting to give a piece of intrigue, but we don't know how much of that— you've got to be kind of putting the content out fairly frequently. Telling stories, like ask your clients why they come into the spa in the first place. Oh, and it's not just to get a manicure. Normally it's because it's to improve confidence, they want to feel better about themselves, they want to escape busy family life, they love coming in just to chat to you, you and your team. There'll be a whole load of other reasons. So again, those are all bits of content that we can put out. Tell stories about how Lucy came in. She's a 32-year-old single mum of 2, absolutely flat out all the time. So what we did is we actually arranged a little— because she's a really loyal customer, we actually arranged a free foot rub for her just to kind of make her day just that little bit better, experience that little bit better. This is what Lucy had to say about it. And then you've got a video testimonial which pops up. It's going to get people coming in You know, inquiring in their droves, and then you can run a few local Facebook ads. That's something for another day. But anyway, content that will hopefully start conversations. How much does it cost for manicure? Then what we want to do is we want to do what we call a consultation. So this, this is— I'm guessing you do things like massage treatments and things like that as well, do you? Yeah. So again, there'll be— if people are kind of like stressed and have joint aches and pains and things like that, massage is great. But why not actually get them in for a free consultation initially, 20-minute consultation, plus they can bolt on the treatment if they want. Because again, you need to get into the habit of selling like courses of treatments for things like massage, especially if they're symptomatic. Now, I'm a bit mindful here of kind of, again, there's There's physiotherapy, which obviously you're not, versus, you know, just nice therapy, spa treatments and things like that. But again, being able to upsell people. So when they come in for their free consultation, they're talking about how stressed they are. And you can say, well, actually it's been proven that if somebody comes in for a massage once a month, their stress levels reduce by 43%. You've got to go and find the stats. I just made that up. You know, so have a consultation process where you're really getting to know the client. Make their first appointment that little bit longer so you can work out exactly what they need and then use it as an opportunity to upsell. You know, it's like they're coming to you as an expert effectively to solve a problem. So solve the damn problem. Don't just sell them a manicure. Like, go 7 layers deep on it. And there's nothing nefarious or persuasive or aggressive. There's no aggressive sales techniques in that. It's just about getting to know the person and then saying, well, actually, look, do you know if you came back and did this monthly, actually your stress levels would go down massively?

Yeah.

So how about we get you booked in for the same time next month? Okay, really simple. Like, that's one statement that you could use, and there's a dozen which I could give you. So we have a consultation process that obviously leads to a conversion. So we convert the client, and then off the back of that, we end up with loyal clients. So the 5 C's. Now, these loyal clients obviously are referring people. They, like, they don't need to see all your content. They don't need to have that initial conversation. They're like, you know, Sandra said that Laura's practice spa was brilliant, so I'm just gonna go and book in. Don't care about price, don't care about anything. I'll just get booked in. So we get that sort of word of mouth working. Hence why people who are like, what's the cheapest manicure I can get? They're not gonna— their expectations are so low, they're not gonna be out there like shouting, you know. Somebody might mention it and they'll go, oh yeah, I went to Laura's spa because it was the cheapest. That's not a good recommendation.

No.

So that's why we want to— that's why being the most expensive is often quite good, because we get a better type of client coming through the business. Then the numbers are important, okay? 70-10-2. Now, if I were to ask you what your conversion rate is at the moment, what would you say it is?

Most people that book a consultation or have an inquiry do follow up, but I'm not sure whether that's because it's for an occasion like a hen party or—

Yep. So when I ask this question, you've given me half the answer, which I get quite often, which is, Oh, when I get in front of people, I convert pretty much all of them. So they'll be telling me their conversion rate's like 80 to 90%, right? A good conversion rate is somewhere between 1 in 5 and 1 in 3.

Wow.

We don't want all of the clients because it fills up all of our capacity. It destroys the profitability in our business if we're not expensive enough. So a good conversion rate, so even if we were to work on sort of 1 in 3 basis, so you can see here that you actually need to be turning away a darn sight more clients than you actually bringing into the business. Little mindset shift for you. Everybody's focus in business is get more clients, get more clients, get more clients. My focus is like turn clients away, turn clients away, turn clients away. Because then the, you know, through, by virtue of the fact of going for no, I'm going to get the yeses that I want because I'm standing by my values for my business. And I'll get the best clients in my business who get the best results. You see? It's a slightly different mindset. What I always say to people then is, great, if your conversion rate is like 80, 90%, right? And they go, they normally say, well, I think I'm a good salesperson. You know, my conversion rate is great. And I say, cool, okay, well, double your prices and then go and get the same conversion rate. And they go, well, I couldn't possibly do that. I'm like, great, that means you're not a good salesperson because a good salesman would be able to take a product, double the price, and still sell the same amount.

Yeah.

So actually, we want to be getting you probably somewhere between that sort of 25 To 33.3% of a conversion rate. Now, to be fair, I think that the therapy side of the business is slightly more commoditized. You can afford to have a higher conversion rate. That's fine. I think with the day spa side of things where you're getting hen parties and things like that coming in, we can afford to, you know, lower that conversion rate but be more profitable. Does that make sense?

Yeah.

You need to— so most business owners focus on this number here. Okay, I actually want you to start focusing on the conversations and the consultations. Okay? You need to find a way of measuring that in your business. Those, those are what we call lead indicators. Imagine your goal was to sell 100 treatments a month, right? But you get to the end of the month and you've only sold 50. There's nothing you can do to influence that up or down. All of the activity has lagged before that in order to get those 50 sales. We can't, we can't change now. It's the end of the month. But if we set a target at the start of the month to get 100 sales and we get halfway through the month and we've only done— let's— I'm gonna have to go back to work the numbers out with you. But let's say we had— we wanted to do 100 here, which means we've got to multiply this by 50. So we've got to do 500 consultations. That's quite a lot. But let's just run the numbers through. And then we've got to multiply that by 50 as well. So we've got to start 3,500 conversations. It's probably not quite— I think the numbers are a bit out of whack, but you'll get the idea. But so we want to get 100 of those. We get halfway through the month, but we haven't done 500. We've only done 100 of those. Now our lead indicators are telling us that we're going to fall short of our goal. So we've got 2 opportunities here. One is we just accept the fact that we're not going to hit our goal and give up. The second one is we go, shit, we haven't started enough conversations and we haven't booked enough consultations. What can we do to get more of those booked? So the more of those we're doing, natural byproduct is we're going to sell some stuff. Okay, so I call it— and this is a really important phrase I want you to remember, okay? And this is linked to that whole Facebook thing. When somebody's there shopping for a treatment manicure, £25 or whatever it is, and you give them the price back, what you're doing is you're stepping over the pounds to get to the pennies. Because you're desperate, you need that sale. I need that sale. Laura's got to pay her mortgage and her bills. So Laura can't possibly turn down that sale because I need that sale. And actually, at that point, who's that sale about now?

The client, not about me.

Yeah, it should always be 100% about your client. It should never— you should never be Like trying to get that. So that's what being the cheapest is. It's trying to get the sale because you need the money. Okay. Actually, no, we've got to flip that on its head and go, no, no, we want to be the best of the best of the best at everything that we do. And that means our value system needs to be tweaked slightly and we need to start saying no to some of our clients.

Yes.

So there we go. So yeah, hopefully there's a few things in there that you can kind of pull out of that and start to apply for your business. And I think if I was going to summarize, I would just focus on your lead indicators, start measuring those, be fearless with your pricing. Doesn't have to be crazy, not double it or quintuple it like I did. You can just— 10 or 20% increase across the board, and especially on your more profitable products that people are buying regularly. You can be a bit more brave with those because you've already clearly got a market for it. So some products you might be like, I'll just do 10%. Some products you'd be like, well, actually, let's just go for 40% on it because we make a lot more money out of it. So be fearless with your pricing and you can implement that straight away. I would even— I bet you've got your prices on your website, haven't you? And on your Facebook page and things like that.

I've got it on my website.

Yeah, I would even be tempted whilst you're testing your pricing. So there's a validation process you're going to go through here for a month or two. Just pull the prices off your website so people actually have to inquire and speak to you.

Okay, yeah.

Because don't forget, again, you're going to get people who will be going to a dozen different websites and picking the cheapest, and you'll never have the opportunity to speak to them. That 70/10/2 starts with the conversation. Yeah.

That's the question, yeah.

Don't think about price. We just need to get you into the spa because then we can show you the amazing value which we've got. By the way, did we— what we haven't put on our website is we've got this great offer on at the moment, which is a 15-minute foot rub whilst you're having your manicure. Oh, how much does a manicure cost? Oh, it's— well, it's £40. I know that may sound expensive. In fact, you don't even have to justify it. You say it's £40. They may say, oh gosh, that's expensive. Say, well, yes, but we are the best in the area. Why don't you just come down and experience it? Look, if you don't feel you get value for money out of it, We'll just give you a refund. It's not worth our reputation to be taking money off people who don't get what we do.

Bold.

It's bold. And there will be no other spas in the local area that will be doing money-back offers like that. And don't forget, if a client comes in and for whatever reason they don't get value out of it, you can hand on heart say, well, actually, we either did the best possible thing and they just didn't get it, in which case, not the best client, or actually, oh gosh, You know what, actually we messed something up. We could have done something better. You've learned from it. Hopefully they might still come back because you've given them great value anyway. It's, you know, I've been doing money-back guarantees on all of my products for 20 years. I've had 2 people ask for their money back. And to be honest—

I read that in your book and it worries me because it's not me doing the treatment. If it was me doing the treatment, I would be 100%. But when you've got I think that's what worried me doing it that way.

So you need to— there'll be a way. I mean, this is a little Brucey bonus that we can tag on to the end of this actually, because we are kind of pretty much over time now. But with staff, have you got a handbook there? Have you done training with them on how, like, your mission values— sorry, mission, vision, core values— do they share in what the business is about? Do they get it?

They do, yeah. They are brilliant members of staff. Yeah, they are.

So one of the things which you could say is we're going to be implementing a— you could implement a bonus scheme which could be just an extra £100 or £200 which is split between all of them each month, that if we get 100 happy clients at the end of every month, they get to share in the bonus pot. So little incentives like that just will, you know, and by the way, How we get 100 happy clients is we make sure that we're the best of the best of the best. So this is what— and what we're also going to be doing is we're going to be introducing a scheme whereby we offer a value-based money-back scheme. So if the client comes in and they're just, they just don't, they're not happy, we have a no quibble, we just hit the refund key for them. That will obviously be deducted from the total of the 100. So if we end up with 99 because you've not done the best job that you possibly can do for whatever reason, you don't get the bonus. Sorry. So you can tie in— there's always ways to kind of try, you know, tie in and get people motivated. And if they're motivated by money, that's a good one. They might be motivated by other things. Well, actually, what we'll also do is we'll chuck in— you get, you know, well, you get a little bit of a bonus in your pay packet, but also you get a couple of free treatments off the rest of the team. You know, we'll make time for it. You know, there's loads of different ways to incentivize it.

Thank you.

Cool. No worries. Right. So for everybody who's been watching, listening, I hope you enjoyed this episode of Fix Your Business. If you want to be in Laura's seat, not physically, that would be a bit weird. But if you wanted to be sat where Laura sat and be a guest on Fix Your Business and let me tear your business apart and build it back up again and hopefully make it better, all you've got to do is just email me, robin@fearless.biz. Give me a few details about your business. so that I can make sure that you're a good fit for the show. Don't forget as well to subscribe to the YouTube channel. That just helps other people to find the business. And if you particularly enjoyed this episode, there's a little thumbs up button, so give it a little like as well. Thanks, Laura, you've been an absolute star.

Thank you.

Hope you got value out of that, and I'm sure that we'll be speaking at some point in the future as well.

Yeah, perfect. Thanks, Robin.