ABC
Massage
Therapy
Business Plan
2014-2017
Prepared By:
1
Table of
Contents
Executive Summary
Page 4
Company Summary
Page 5
Company Objectives
Page 6
Competitive Landscape
Page 7
Competitive Advantage
Page 8
Operational Analysis
Service Analysis
Page 9-11
Page 11-13
Industry Trends
Page 14
Market Needs
Page 15
Market Analysis
Page 16-17
Market Trends
Page 18-19
Marketing Plan
Page 20-24
Start-Up Analysis
Page 25
Exit Strategy
Page 25
Financial Analysis
Page 26
Financial Highlights
Page 27
Break-Even Analysis
Page 28
Income Statement
Page 29
Balance Statement
Page 30
Appendix:
Sales Forecast: Year 1-3
2
Business Plan – ABC Spa Massage Therapy.
Executive
Summary
Massage therapy became widely used in Europe during the
Renaissance. In the 1850’s, two American physicians who had
studied in Sweden introduced massage therapy to the United
States, where it became popular and was promoted for a variety
of health purposes. With scientific and technological advances in
medical treatment during the 1930’s and 1940’s, massages fell
out of favor in North America. Interest in massage therapy
revived in the 1970’s and became the “norm” across Canada.
Introducing ABC Spa Massage Therapy, a massage therapy
clinic operated by a trained and licensed sole proprietor, Joe
Smith. ABC Spa Massage Therapy will offer a massage to
clients in a variety of styles – including traditional Swedish
Massage, Deep Tissue, Sports Massage, and others.
To meet a set number of objectives, through both the start-up
and development phase, ABC Spa Massage Therapy needs an
investment of $000,000 that will help purchase needed
equipment, market the services throughout Toronto, and provide
operating capital for the first three-to-six months.
The unique services of ABC Spa Massage Therapy, at an
average rate of $00 for 45 minutes, will be delivered using a
special massage oil called “_________”.
ABC Spa Massage Therapy will also be utilizing an exfoliating
cream called “____________” which will also be available for
sale at the clinic and also online on the business’ website for
additional revenue.
Being a start up business, ABC Spa Massage Therapy
estimates, with the financial assistance, this business will have
secured approximately 000 transactions within the first 2-3
months combined. The goal by the end of the first year is to
average a minimum of 000 transactions per month.
The objective for the first year is to generate revenues of
$000,000 and by the end of year three, to increase revenue to
$000,000. Based on market penetration and share, this is a
realistic and attainable goal for ABC Spa Massage Therapy.
3
Private & Confidential. ABC Spa Massage Therapy.
Business Plan – ABC Spa Massage Therapy.
Company
Summary
ABC Spa Massage Therapy is a sole proprietor business owned
by Joe Smith of Ontario who has successfully undergone a
rigorous 2,200 hour training program to become a Registered
Massage Therapist or RMT.
ABC Spa Massage Therapy will offer a massage to clients in a
variety of styles – including traditional Swedish Massage, Deep
Tissue, Sports Massage, and others.
Clients will quickly recognize the difference between ABC Spa
Massage Therapy and the other local competitors by being
transparent and posting certificates and awards on the office wall
and including them in printed marketing material.
In addition, Joe Smith will be very visible within the community in a
number of ways by attending numerous trade-shows and events,
massage therapy workshops, and industry related networking
groups.
Because of his broad background and training, Joe and his hired
team, will be able to offer a variety of modalities to better serve the
clients' needs. Joe firmly believes in business and massage
therapy ethics and will abide by the highest standards of integrity,
professionalism, and compassion.
The ABC Spa Massage Therapy goals are to abide by the set
code of ethics within the industry including client confidentiality
while making the business policies publically available and to offer
a sliding-scale rate pricing structure.
The overall mission is to run a profitable business by providing
therapeutic massage in a caring, professional environment. ABC
Spa Massage Therapy will tailor the client's experience based on
initial interview information, as well as in-the-minute feedback
during the massage, to insure the client's comfort and satisfaction,
and to increase repeat business.
The intention is to offer a massage that is effective, yet respectful
of the client's personal boundaries, so that the experience is
relaxing and energizing for both the client and the provider.
4
Private & Confidential. ABC Spa Massage Therapy.
Business Plan – ABC Spa Massage Therapy.
Company
Objectives
ABC Spa Massage Therapy has many objectives to meet over the
next three years while being mindful of the overall client experience
by using quality oils and lotions, appropriate scents, and soothing
music, nature sounds or silence - as the client prefers. ABC Spa
Massage Therapy will be positioned as a clinic that offers the
“freedom from life’s stresses during a 45 minute massage session”.
To meet the following objectives, ABC Spa Massage Therapy needs
a start-up investment of $000,000 that will help purchase needed
equipment, marketing the services throughout Ontario, and provide
operating capital for the first three-to-six months.
Short-Term Objectives
The short-term business objectives within the first year include:
•
•
•
•
Driving business revenues to over $000,000.
Securing and maintaining a profit margin of 00%.
Providing approximately 0,000 hours of message therapy.
Continuing to build the brands awareness throughout Ontario.
To reach these objectives, Joe Smith will need to build a strong
presence paired with community awareness and referrals, along
with ensuring the client experience is met with consistency.
Long Term Objectives
The long-term business objectives within the first 3 years include:
•
•
•
•
Pay back of 00% or $00,000 worth of capital investment loans.
Driving business revenues to over $000,000 by year three.
Providing approximately 0,000 hours of message therapy.
To be in the top 3 of Massage Therapy Clinics within 10km.
To reach these objectives, Joe Smith will need to ensure he
executes strategic marketing campaigns with the assistance of a
marketing agency, that brand positioning is secured, budgets are
kept in-line, and that the business continues to stay ahead of
massage therapy trends, training, and client needs within the target
market.
5
Private & Confidential. ABC Spa Massage Therapy.
Business Plan – ABC Spa Massage Therapy.
Industry
Trends
As Registered Massage Therapists, ABC Spa Massage Therapy
will possess liability insurance and adhere to regulations set forth
by the College of Massage Therapists of Ontario and the
Regulated Health Professions Act.
The number of massage therapists has increased very sharply in
the last few years. Reflecting on this increase, data from a
Statistics Canada's Survey of Household Spending (SHS show
that actual household spending (after inflation) on other personal
care services (manicures, facial treatments, massages, etc.)
increased by 000% (or 0% per year) between 1997 and 2011.
This sharply rising trend in the number of massage therapists
should continue over the next few years, although at a more
moderate pace. According to the 2006 Canadian Spa and
Massage Therapy Sector Profile, prepared for the Canadian
Tourism Commission, there were more than 0,000 physical (not
home-based) locations in Canada at the time of the study, with
Ontario accounting for 00 per cent.
In 2010, the Canadian industry generated over $0 billion in
revenue, with 00 per cent of the revenues derived from treatment
rooms such as what ABC Spa Massage Therapy will offer. In 2010,
there was an estimated 00.0 million visits to Canadian spas and
massage therapists which has also helped the Commercial real
estate sector too – the spa industry occupies approximately eight
million square feet of indoor space.
The spa and massage therapy industry has grown 00 per cent
annually on average, with a cumulative growth of 000 per cent
from 1996 to March 2006. In 2005, the latest found study, per spa
revenues grew 00 per cent, with an increase in the spa workforce
at a moderate four per cent.
The spa and massage industry in Canada is expected to have
great potential in particular in Toronto, as it is a major tourist
destination. Spas and massage therapy clinics rely on tourists for
approximately 00 per cent of visits – equating to 00 per cent of
revenues – with one-third of all spas and massage clinics in
Canada qualifying as being tourism-oriented.
6
Private & Confidential. ABC Spa Massage Therapy.
Business Plan – ABC Spa Massage Therapy.
Market
Needs
While massage may have developed a reputation as a “decadent
treat” for people who love pampering, new studies are showing it
has a wide variety of tangible health benefits for everyone.
Research over the past couple of years has found that massage
therapy boosts immune function in women with breast cancer,
improves symptoms in children with asthma, and increases grip
strength in patients with carpal tunnel syndrome, just to name a
few.
New research is also starting to reveal just what happens in the
body after a massage. While there have long been theories about
how massage works—from releasing toxins to improving
circulation—those have been found with little to know evidence.
Massage therapy can be beneficial to people of all ages and
conditions and is widely used to help obtain relief from many
specific problems, including:
• Inflammatory conditions such as arthritis and tendinitis.
• Stress relief and associated conditions.
• Headaches and migraines.
• Muscle related conditions such as spasms, strains and sprains.
• Popular back, knee, and shoulder pains.
• Repetitive strain injury, in particular around the neck.
• Circulatory and Respiratory problems.
• Pregnancy and labor discomfort.
• Post sport or accident injury and post surgical rehabilitation.
Now, one study, for example, found that a single, similar to the 45minute massage that ABC Spa Massage Therapy will offer, has led
to a small reduction in the level of cortisol; a stress hormone in the
blood, a decrease in cytokine proteins related to inflammation, and
allergic reactions, plus a boost in white blood cells that fight bodily
infection.
A 2010 study with 53 participants also found a decrease in
cytokine proteins related to inflammation and allergic reactions. It
is also found that a weekly 45 minute massage could also help
the elderly and those suffering from musculoskeletal injuries and
people with chronic inflammatory disease.
7
Private & Confidential. ABC Spa Massage Therapy.
Business Plan – ABC Spa Massage Therapy.
Market
Analysis
While car insurance will typically pay for a massage for only a
limited time period (less than one year), many health insurance
policies now have Alternative Care coverage with a renewable
annual maximum. The rapid turnover of this group is offset by the
fact that they will pay top dollar per session. The key is to keep
getting new referrals.
The self-pampering clients tend to have more disposable income
and can indulge in massage for relaxation. These individuals are
the core of long-term repeat customers. These clients will come
once a week to once a month for years, and often refer other
family and friends. The difficulty working with these clients comes
from the 'familiarity breeds contempt" factor – meaning they think
they deserve lower rates, seem to cancel on short or no notice,
and can come to seem as friends, rather than clients. The
challenge here is maintain a professional relationship, while
encouraging the warmth and personal connection that is as much
a part of their experience as the actual massage.
The third group is the alternative care users. These are people
who mistrust allopathic medicine, and prefer to use massage
therapists, naturopaths, herbalists, acupuncturists. A local
networking group of alternative care providers is a great way to get
referrals, as well as placing posters on other practitioners offices,
and ads in the local alternative newspaper. The problem with this
group is that they can tend to have relatively small disposable
incomes, so that a massage once every two months may be all
they can afford. A relatively large pool of these clients will book
only 00% of the available appointments in any given month.
The final group which can be another core portion of revenue
generation, the amateur athletes. There is a large population of
runners and bicyclists in Toronto, as well as out-of-town
participants who return for annual events, and book massages
during those times. This business tends to be slightly seasonal as most amateur athletes will only train, or gear-up their training
during the Spring and Summer months. However, they are a very
loyal group, and will readily give word-of-mouth recommendations,
especially if they see a massage as having given them a specific
boost to their performance.
8
Private & Confidential. ABC Spa Massage Therapy.
Business Plan – ABC Spa Massage Therapy.
Financial
Analysis
Being a start up business, ABC Spa Massage Therapy estimates,
with the financial assistance, this business will have secured
approximately 000 transactions within the first 2-3 months. The
goal by the end of the first year is to average a minimum of 000
transactions per month.
The objective for the first year is to generate revenues of $000,000
and by the end of year three, to increase revenue to $000,000.
Based on market penetration and share, this is a realistic and
attainable goal for ABC Spa Massage Therapy.
ABC Spa Massage Therapy will pay back the principal $000,000 to
the investors and grant programs over the course of five years at
$0,000 per month. As a majority of grant programs do not charge
interest, it is expected that this business will only pay back the
principal amount. However, if interest payments are required, ABC
Spa Massage Therapy would anticipate a 0% rate over the five
years.
The financial plans, including the income statement and the profit
and loss spreadsheets, are based on statistical data and using the
highest knowledge of Joe Smith. Thus, this business plan
represents a conservative but realistic outlook of this business’
overall future.
This business will have sufficient bottom line capital to withstand
any small amounts of negative cash flow. The rest of the expenses
are based upon traditional business costs and expense trends
within the massage therapy industry. The expenses increase each
year based on inflation and the necessary needs of a growing
business.
Direct cost of sales are very low for the business as most costs
are fixed. Travel to client sites, printing and paper, and other direct
supplies for clients are the only direct costs for services provided
directly by ABC Spa Massage Therapy. The marketing is situated
at 0% of the monthly profits (including the $000 for Google
advertising) in years two and three, which can increase or
decrease at the discretion of Joe Smith.
9
Private & Confidential. ABC Spa Massage Therapy.
Business Plan – ABC Spa Massage Therapy.
Income
Statement
Year 1
Revenues
Sales
30 Minute Massage (In-House)
45 Minute Massage (In-House)
45 Minute Massage (Out-Call)
Merchandise Sold
Total Sales
Investments & Grants
Further Investments Received
Total Investments Received
TOTAL INCOME
Expenses
Cost of Services
Total Cost of Service
Total Gross Profit
General Expenses
Lease and Building
Assorted Bank Charges
Marketing and Advertising
Equipment Purchase/Repairs
Laundry and Supplies
Depreciation of Assets
Employee Salaries (Receptionist)
Business Insurance
Professional Fees
Telecommunication
Office Furniture & Supplies
Travel and Entertainment Costs
Miscellaneous Costs
Payroll Taxes & Benefits
TOTAL GENERAL EXPENSES
Other disbursements
Grant & Loan Disbursement
TOTAL OTHER EXPENSES
TOTAL EXPENSES
NET PROFIT BEFORE TAX
Income Tax (estimated at 25%)
NET PROFIT AFTER TAX
Year 2
Year 3
$0
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10
Private & Confidential. ABC Spa Massage Therapy.