Spa Health Club Business Plan
Spa Health Club Business Plan
Spa Health Club Business Plan
Executive Summary
VNS is a socially and environmentally conscious health club that is concerned not only with physical beauty but also
with mental well being. It is a health club with environmental and social concerns that sets it apart from other clubs; all
products used are plant safe and cruelty free. We at VNS feel that pampering our clients' leads to the health and well
being of the greater society, therefore, we address the special health concerns of our clients with exercise, yoga, and
meditation.
The goals of our company are to be profitable and build a product line through name recognition. It is the immediate
goal to launch an additional product line into the beauty market, while the long-term goal is to go public with several
health club facilities and an active product line.
• Create an environment for people to feel good about themselves, both physically and mentally.
• Provide services for those seeking natural means to strengthen and heal their bodies due to injury or illness.
• Provide services for the needs of women in shelters and those struggling financially.
• Provide special activities for various holidays.
1.2 Objectives
1.3 Mission
The goal of our company is to enhance the lives of men and women by providing an atmosphere that aids the body with
relaxation techniques and health conscious alternatives.
Company Summary
VNS has been a dream for the founders; it was essential for a salon/health club/spa to nurture mind, body, and
spirit. This combination is hard to come by in Varanasi, and so the four founders decided to create the VNS health club
and sought the backing of three angel investors.
VNS is located in the Lanka Varanasi (Near BHU), Utter Pradesh, and provides a magical setting for this soothing
building. It is downtown and in the heart of our target market.
Start-up
Requirements
Start-up Expenses `
Legal 7,500
Stationery etc. Rs.500
Brochures Rs.5,000
Consultants Rs.0
Insurance Rs.500
Rent Rs.4,500
Research and development Rs.0
Expensed equipment Rs.2,500
Other Rs.4,500
Total Start-up Expenses Rs.25,000
Start-up Assets
Cash Required Rs.500,000
Start-up Inventory Rs.5,000
Other Current Assets Rs.75,000
Long-term Assets Rs.0
Total Assets Rs.580,000
Total Requirements Rs.605,000
Start-up Funding
Assets
Non-cash Assets from Start-up Rs.80,000
Cash Requirements from Start-up Rs.500,000
Additional Cash Raised Rs.0
Cash Balance on Starting Date Rs.500,000
Total Assets Rs.580,000
Liabilities
Current Borrowing Rs.0
Long-term Liabilities Rs.0
Accounts Payable (Outstanding Bills) Rs.5,000
Other Current Liabilities (interest-free) Rs.0
Total Liabilities Rs.5,000
Capital
Planned Investment
Investor 1 Rs.200,000
Investor 2 Rs.200,000
Invertor 3 Rs.200,000
Additional Investment Requirement Rs.0
Total Planned Investment Rs.600,000
Services
VNS is a combination salon, spa, and health club. We specialize in improving the mind, body, and soul. Each part of the
club offers different services: haircuts, color, and styling in the salon, full-body pampering in the spa, and fitness classes
in the health club. Each of these services is designed to nurture one's complete self, and, in turn, improve self image.
Future services include a product line that is pure and natural: no animal testing, and the use of only organic
ingredients. Another goal for the future is making our kitchen available for rent by start-up restaurants hoping to
introduce their food to our clientele. Ideally, VNS would like to create similar clubs in other cities as well.
Market Analysis Summary
The initial market for VNS is Varanasi, Utter Pradesh. With its growing population of moderate to high income
professionals, Varanasi provides an ideal market. It is also one of the fastest growing areas in the Utter Pradesh, with a
continually expanding consumer base. Another advantage to the Varanasi market is the high level of travel to the area,
especially among Tourist. This also increases our possible consumer base.
VNS aims to provide health and spa services to those seeking physical and mental well being. Women between the
ages of 18 and 70 are the vast market, with an emphasis on professional women in their mid twenties through their mid
fifties. Also, women battling or recovering from a serious injury or illness are another specific target market. For men,
professionals concerned about their appearance are our main market. They are often in their late twenties through their
mid forties. We target anyone who is searching for a natural method to heal body and soul, regardless of age or
income.
Our market segmentation is specific to two target groups. Our first target market is the corporate workers of Varanasi.
We have chosen these people, ranging from early twenties to mid forties, because they are in stressful jobs and could
use relaxation and exercise. They also have the financial opportunity to regularly treat themselves to a facial or
massage. Often in the working world it is necessary to look healthy and fit, therefore, we offer exercise facilities to keep
people fit and happy.
The second group we target is people either recovering from an injury or people who have a condition which needs
special attention. We wanted to create a safe environment where people feel comfortable and get the attention they
need with out feeling ostracized or sick. We offer special classes, massage, and homeopathic opportunities for people
with specific needs.
The chart and table below outline the target markets we have chosen; however, for simplicity's sake, we break our
market into two segments: Women and Other. We firmly believe that women would take advantage of our services
more often than men would.
Market Analysis
To continue customer awareness, we have created a monthly newsletter, highlighting monthly specials and
other events that are important to the company.
Our market's needs are simple: people want to look and feel good. We aim to please people who want this. It has been
determined that our target markets are also interested in social issues such as the environment and community. These
ideals provide VNS with a competitive edge because we are committed not only to the needs of the community, but it's
concerns as well.
4.3.1 Competition
Our indirect competition includes salons, health clubs, and spas in the Varanasi area. Because VNS is a full-service
salon, there is no direct competition.
All these promotional methods mesh together to form a sturdy advertising base for the company to grow on.
Our competitive edge is that we offer a relaxing atmosphere that can refresh the mind, body, and soul. Offering special
classes for those with serious health concerns sets us apart, as does the availability of all services under one roof.
5.2 Sales Strategy
Our revenue is earned in several ways. First, with memberships in which there is a monthly charge that provides
discounts on services; full price is charged to non-members for services. Our main goal is to foster relationships with
clients and keep them through quality of service and products. The second method of sales will be encouraged through
repeat business and word-of-mouth advertising.
The Sales Forecast is in monthly detail in the chart, and the summary follows in the table.
Sales Forecast
Unit Sales
Sales
Management Summary
VNS’s location in Varanasi will be staffed according to department. The salon will have two full-time stylists and the spa
with be staffed with a full-time beauty technician and masseur. The health department will have three part-time
instructors working on rotating shifts.
Management will have four managers, each with specific areas of expertise: financials, publicity, human resources, and
ongoing development.
Personnel Plan
Total People 11 11 11
Leasing the location with the option to purchase the property is ideal for the company. The equipment, including
exercise equipment, was purchased with start-up funds, leaving VNS with little monthly costs beyond rent, utilities, and
payroll. VNS has a small staff of service providers whose payroll is subsidized by tips from clients. The managers are
paid modestly,with their pay tied to the success of the company.
The main assumptions are the continued market need and the ability to deliver. We have included financial
assumptions below.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Other 0 0 0
Key to the financial success of VNS is continued annual growth. While there are times of the year, especially holidays,
where sales are expected to rise substantially, annual growth is imperative. The direct costs of providing our services is
small, so increasing the number of clients receiving services will aid the bottom line. The inventory turnover increase
shown in the chart is the result of rounding, our inventory remains steady at approximately two months in stock.
The Break-even Analysis in this plan makes many assumptions to achieve an estimate. Almost all cost in the operations
will remained fixed. Salary for employees, lease, and utility costs are all considered as fixed costs.
Break-even Analysis
Assumptions:
Expenses
The following chart and table show the cash flow for VNS.
Pro Forma Cash Flow
Cash Received
Assets
Current Assets
Long-term Assets
Current Liabilities
Ratio Analysis
Percent of Sales
Main Ratios
Activity Ratios
Debt Ratios
Debt to Net Worth 0.07 0.07 0.06 n.a
Liquidity Ratios
Additional Ratios