For many of us 2010 is and was a welcome challenge compared to 2010. Many firms for which we consult or advise had a very difficult go in 2009 as they saw traffic, revenue and services contract.
While there have been many who have seen a rise in profits and volume, many have seen eroding sales, margin and flow since the end of 2007. In business terms this is a long-time.
I won’t digress into my personal observations of recessions, the recession in 89-91 was for a short time equally severe as what we are experiencing today. The big difference being how long the economy was contracted.
In the recession in 89-91 we were basically in bad sorts for about 18 months. Even smaller, less capitalized firms were able to sustain themselves – especially with a quick and measurable recovery that was experienced in 92-93.
Many I have spoken to want to include the recession of 2000-2001. Yes, our economy slowed substantially, that contraction was as much about technology and the infamous “internet bubble” as much as anything else. This coupled with the tragedy of 9/11 put the brakes on the economy and slowed us measurably…but not like this.
Many economists – myself included – believe our “recession” began at the end of 2007. I agree. The holiday traffic, sales, and good mood of the nation just seemed a bit different…something was not quite right. The same feeling I got at the end of 89.
With that said, where does that put us related to the spa industry?
Well for one, sustainability seems to be a watch word for many. If you have had the capital, resources and business model to get you this far, the focus should be maintaining for an extended period of time – probably up to a year or more.
There are plenty of excellent operators out there who also at the right place at the right time with the right staff; but on the whole many firms – firms that have been extremely successful in the past – are having a tough time.
Throughout this blog I have written about ideas you can or should consider to either increase revenue, increase margin, decrease expenses or help retain clients and staff. Some ideas are as simple as effective follow-up following treatments and as complex as introducing medspa treatments requiring significant capital expenditures and hiring or training of certified staff.
All of these ideas can be helpful to almost any size firm…and many of these ideas are those that we hear about, either through communications or hands-on observation.
If you have ideas that you think will help others in the industry, please let us know and good luck in 2010!