Key steps to successful annual business planning

Are you ready for the New Year? Before you know it, you’ll be ringing in 2020 at your spa or massage practice and you want to make sure it gets off to a good start and stays that way. You probably know by now that you can’t leave things to chance or just “go with the flow.” Success requires planning. Writing an annual business plan helps you focus and prioritize activities so that you have a clear direction and goals for the New Year

Your annual plan should set goals and benchmarks for performance. Above all, it should be realistic. Setting unrealistic goals, whether about revenue, new client acquisition or additional services you want to offer, can lead to activities that increase your expenses, which impact cash flow. Think of businesses that have tried to expand too quickly or without careful planning that ended up losing money and closing their doors.

Make it a team effort

The most successful planning involves getting your team involved.  They may know aspects of your spa or massage practice even better than you. For example, your receptionist may be the first one to hear client concerns.  Your professional staff may have good ideas about new treatments to offer and what clients are saying about purchasing retail offerings. Your team meeting should cover the following questions:

  • What is one area where your spa or massage practice underperformed this year? What should we do to fix it?
  • What is the area where the business performed at its best? How can we repeat this?
  • What part of the business demonstrated the most opportunity for growth opportunity? What steps should we take to maintain the same momentum?
  • What metrics should we use to measure success over the coming year?

Using the input from your team, start to build your plan. The steps should include:

Assess the market

Examine the competitive landscape, looking at both established spas and massage practitioners and new market entrants. Conduct online research through social media and review sites to find out what clients are saying about the competition.  Also ask your vendors and business associates what they know about the competition.  Assess your advantages and disadvantages against the competition so that you know your opportunities and challenges in the coming year.

Include on and offline research about your own spa or massage as part of your marketplace assessment to find out what clients and prospects are saying about your spa or massage practice. Also determine if the marketing messages about your business are resonating with your clients and prospects. You may find that your business has a perception problem that needs addressing.

Review your marketing program

Evaluate your marketing activities both on and offline.

  • Look at response rates of your direct mail and/or email marketing to determine what campaigns have been the most successful.
  • Assess your web traffic to see how much it has grown and where visitors are coming from – email marketing, online ads, social media channels or blog posts. Also analyze where most of your visitors are spending time on your website to determine if you need to make any changes.
  • Evaluate what other marketing activities, such as community involvement through volunteer work or sponsorship and participation in local business events, have helped raise your visibility and attract new clients.

Based on your research and your goals, determine what activities you want to continue or launch next year, and set a budget for each.

Analyze operations

Analyze your operations. This includes everything from rent to information technology. Identify what changes are needed to improve efficiency and productivity and support growth.

Determine hiring needs

Decide who you need to hire to meet projected goals. Consider what areas of expertise you need to service new client targets.

Review financials

Review financial information over the past three to five years, if applicable. Break down total sales into different service areas and retail products.  Next determine gross profit margin for each. Include figures on capital expenditures and make sure that balance sheets and profit and loss statements are up to date. Use this information to forecast financials for the next three years.

Planning will take some time, but it will be well worth the effort to keep your business on track to meet your goals for the next year.