2009

BUSINESS PLAN FOR:

RIVER LANDING VILLAGE SPA

ORGANIC DAY SPA AND MASSAGE THERAPY

Julie OrthnerComm 447

12/03/2009

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TABLE OF CONTENTS

1.0 Executive Summary …………………………………………………………………………………………..4Management Team…………………………………………………………………………………………….5

2.0 Business Overview …………………………………………………………………………………………….62.1 Introduction…………………………………………………………………………………………….62.2 Industry Overview……………………………………………………………………………………62.3 Mission Statement……………………………………………………………………………………72.4 Values………………………………………………………………………………………………………72.5 Our Philosophy ……………………………………………………………………………………….82.6 Goals & Objectives…………………………………………………………………………………...8

3.0 Operations Plan………………………………………………………………………………………………….93.1 Location…………………………………………………………………………………………………...93.2 Floor Plan……………………………………………………………………………………………….103.3 Flow of Organization……………………………………………………………………………….10 3.4 Quality Control Programs……………………………………………………………………….113.5 Organizational Tasks………………………………………………………………………………113.6 Supply Analysis……………………………………………………………………………………….133.7 Service Providers…………………………………………………………………………………….133.8 Capital Budget ………………………………………………………………………………………..133.9 Operating Expenses ………………………………………………………………………………..14

4.0 Human Resources Plan………………………………………………………………………………………154.1 Organizational Structure…………………………………………………………………………154.2 Job Descriptions………………………………………………………………………………………154.3 Recruitment…………………………………………………………………………………………….164.4 Training Programs………………………………………………………………………………….174.5 Human Resource Strategy……………………………………………………………………….18 4.6 Labour and Management Costs………………………………………………………………..184.7 Shareholders’ Agreement………………………………………………………………………..18

5.0 Marketing Strategy ……………………………………………………………………………………………195.1 The Marketing Mix…………………………………………………………………………………..195.2 Segmentation, Targeting, Positioning……………………………………………………...235.3 Competitive Analysis……………………………………………………………………………….235.4 Marketing Plan………………………………………………………………………………………..24

6.0 Financial Plan…………………………………………………………………………………………………….266.1 Capital Requirements ……………………………………………………………………………..266.2 Summary of Projected Income Statements………………………………………………276.3 Summary of Projected Balance Sheet………………………………………………………276.4 Dividend Policy……………………………………………………………………………………….27

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6.5 Economic Forecasts…………………………………………………………………………………276.6 Break-even Analysis………………………………………………………………………………..276.7 Net Present Value……………………………………………………………………………………286.8 Internal Rate of Return……………………………………………………………………………28

7.0 Summary……………………………………………………………………………………………………………28

TABLES

Table 1 – Initial Investments…………………………………………………………………………………..13Table 2 – Working Capital……………………………………………………………………………………….13Table 3 – Cost of Goods Sold…………………………………………………………………………………….14Table 4 – Operating Expenses………………………………………………………………………………….14Table 5 – Yearly Staff Increases……………………………………………………………………………….17Table 6 – Service Prices……………………………………………………………………………………………19Table 7 – Competitive Analysis…………………………………………………………………..................23Table 8 – Marketing Budget……………………………………………………………………………………..24Table 9 – Capital Requirements ………………………………………………………………………………26Table 10 – Summary of Projected Balance Sheet……………………………………………………..26

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1. 0 EXECUTIVE SUMMARY

River Landing Village Spa’s location is planned for the new up and coming River Landing Village Square. This location is an ideal location for this type of business as it is located in the downtown core and the heart of Saskatoon.

River Landing Village Spa is a full service organic day spa offering massage therapy and a variety of other amenities in order to serve guests a natural, quality experience. With expert qualifications and industry experience our management team is sure to meet the needs of this business venture.

This organic day spa is also highly committed to serving the environment during the global trend to a greener environment. This entitles River Landing Village Spa to be part of the Green Spa Program being committed to eco-friendly product use. By doing this only pure, natural products will be used during all services offered at the spa and all products sold. These products are of the highest organic purity and offer great results for clients using our products insuring that all guests receive the results they have hoped for.

At River Landing Village Spa we are committed to the highest level of care and quality. In order ensure all services are done consistently and effectively training and development is an ongoing concern at this spa.

In order to make this business venture successful the combination of location, quality employees, professional products, and ongoing marketing are going to key drivers to make this possible. With our beautiful river view and the strategic layout design our staff will be able to maximize the experience for all guests gaining a loyal clientele. Customer service is a main objective for River Landing Village Spa and our experience and friendly spa will ensure that no client leaves unhappy.

With prime real estate and low start up costs this spa is sure to succeed in this market. This is going to be a high traffic area with hotels, restaurants, residences and many retail stores located in the village square we are able to capitalize on a huge opportunity and tap into a new Saskatoon market.

The planned start up for River Landing Village Spa will commence upon the grand opening of the square. This will ensure high community interest and draw customers to visit the hit tourist spot!

River Landing Village Spa – “A natural way to embrace your beauty within.

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Management Team

Julie Orthner

I obtained my esthetics diploma from the Blanche Macdonald Centre in Vancouver, British Columbia in February of 2006. During that time working with an organic product line I established experience in sales and promotion. After moving back to Saskatoon I was able to get a job at a local spa gaining knowledge and experience of the industry as a whole. Perfecting services and getting first hand experience with clients I was successfully able to build a full clientele. Along with that my sales experience gave me an advantage to sell a wide variety of professional products. Along with all of my esthetics training I also worked in the front end, managing employees, booking appointments and taking care of all administrative duties.

After already obtaining my business diploma decided to go back to school and obtain my marketing degree at the university of Saskatchewan to expand my knowledge in all areas of the business world. Through my many years of schooling and my industry experience my qualifications very closely meet the needs required for this position.

Lauren Evans

After graduating from the university of Saskatchewan in 2000 and obtaining both her CA and masters degree Lauren has proven her high level of work ethic and quality performance. Being a desirable candidate in the accounting industy she obtained a job at Deloitte. Here she has worked for a number of years and moved her way up to senior management. After having two children and establishing her family is now ready for a career change. With her experience and drive she will be able to successfully manage the financial and administrative duties of this new business venture.

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2.0 BUSINESS OVERVIEW

2.1 Introduction

River Landing Village Spa will be a full service organic spa. With a wide range of organic spa services will be offered, massage therapy and a variety of other amenities. Our staff will provide quality and consistent services that will ensure that each client is treated with loyalty and respect with each visit to our spa.

2.2 Industry Overview

This spa industry is currently on the rise in both Saskatoon and all other major cities. With beauty and hygiene growing in popularity industry has a large opportunities that need to be capitalized on. People now a days are spending more money than ever on luxury product and services. This is especially true in a booming city like Saskatoon. With the economy on the rise and predictions of continual growth for our community it is no doubt that a new spa would be a perfect addition.

There are many rising trends in the spa industry and with continual pressures by society to create an image of beauty the demands for more options are rising. These images are created by a number of various magazines and news articles discussing the many options and non-surgical alternatives individuals have to meet their beauty needs. With this ongoing popularity appointments are being harder than ever to achieve and space is becoming limited in spa facilities.

Gift certificates in this industry are also becoming a high demand items for both holiday gifts and pre-payment options. These gifts offer an incentive for individuals to try a new service while helping us to gain high profit margins. Gift certificates are an essential part to a successful spa and considered an industry standard.

After extensive analysis of this industry it is proven that there is definitely a large demand for more diversity in spa locations in Saskatoon. With the proper execution and utilization of prime location this new business venture has a large opportunity to gain market share within this industry.

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2.3 Mission Statement

Our goal is to provide a quality service and an amazing experience to all our guests. With the knowledge and consistency of our service our staff will strive to create a memorable and rejuvenating experience with each visit. Our goal entails building enduring and rewarding relationships with our clients and community, through knowledge, wellness and superior service.

2.4 Values

Integrity

Our inside values are congruent with what we advertise on the outside, at all levels. We don’t exploit, mislead or take advantage of our guests or co-workers. Honesty is essential.

Communication

Communication is the key to success in any relationship. If you have any questions or concerns about our policies and procedures, please do not hesitate ask our Management Team.

Teamwork

We encourage a supportive and natural environment. We are more effective as a team together. We do this by communicating, co-operating and working as a team.

Respect

We offer a high level of respect and encourage all individuals to express their personal style. As a beauty provider we encourage that respect to be reciprocated on a levels of our staff and we will continue to offer the quality services you deserve.

Self-care and Improvement

Our mantra is to practice what we preach. As health care workers we continue to improve ourselves, so we can lead by examples. We continually seek for new opportunities for growth and opportunity doing this through others’ knowledge and experience.

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Customer Accountability

We continually work to understand our clients, their diverse needs and expectations. We hold ourselves accountable for their ongoing satisfaction and loyalty. We do this by being focused on customer satisfaction.

2.5 Our Philosophy

Our Philosophy is to provide our spa guests with quality organic spa treatments in a friendly and relaxed atmosphere. Eminence products are not mass produced and do not contain artificial coloring or fragrances. The ingredients are hand picked and hand harvested to ensure premium quality. Every ounce of Eminence products receives personal attention to produce and package.

2.6 Goals and Objectives

Our customer service representative will help you select the treatments that are just right for you.  Whether your goal is relaxation, beautification, or therapeutic, we can help.  Our spa coordinators have extensive spa and salon experience, as well as training in our specific products and services.  We use state of the art software for proper bookings, transactions and client records. 

3.0 OPERATIONS PLAN

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3.1 Location

River Landing Village Spa is going to be located on 19th Street and Spadina. As you can see from the map it is going to have a beautiful view of the river as well as it will be located very close to the downtown core.

River Landing Village Square is planned to have a retail plaza, hotel, restaurants, and condominiums. This gives us the opportunity to target the public, tourists, and people working and living in the village in order to give us a wide rand of business.

This location will be ideal for tourists, people living in the village and individuals who want to experience the modern culture of River Landing.

3.2 Floor Plan

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The layout is designed to invite both walk-ins and people who want to enjoy a relaxing spa experience. Not only does this assist in a memorable experience but also helps to maximize efficiency throughout the spa.

We have massage rooms, esthetic rooms and pedicure station that overlook the river. There is also the couples/honeymoon suite and a wet room as well. Both these rooms double as massages rooms in order to create a number of uses for the area.

3.3 Flow of Organization

When a customer or client first enters the spa our receptionist will greet them. For manicure or make-up application appointments the guests will be able to relax in the front lounge before their appointment. For all other spa treatments clients will be escorted through the double doors into the quiet area where they will be able to change into robes and slippers and enjoy complimentary tea, water, or juice.

Once it is time for the appointment the therapist will come and retrieve their client from the lounge and take them to their designated area for treatment. During treatment time guests are shown full dedication throughout their service. When

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treatments are finished guests will be escorted back to the lounge where they are welcome to enjoy the lounge for as long as desired. Pedicure clients will be requested to stay in the lounge for approximately 15-30 minutes to ensure their polish is fully dried. The therapists will explain thoroughly what to do when they are finished (change back into their clothes) and to return out the doors back to the reception area for further direction. All retail products suggested by the therapist during treatment will be presented at this time.

The idea of the lounge is to create a longer more enjoyable treatment; this enables the clients to feel like they are able to spend more quality time at the spa. This process will help to give clients the ultimate spa experience and also offers efficiency for the therapists to do many services throughout the day.

3.4 Quality Control Programs

Both ISO or HACPP will not be needed but there are strict policies in place in order to ensure that all services are done with quality and care in consistent manner. Consistency is a key aspect of this industry and it is important to offer quality services with ever visit.

3.5 Organization Tasks

Daily

The hours of operation for the spa are Monday – Tuesday from 10-6, Wednesday – Thursday from 10 – 9, Friday from 9-9, Saturday from 9 – 6, and Sunday from 12 – 5.

There will always be one owner in the Spa at all times. They will be there first and take care of all opening procedures and ensure that the spa is ready for operation upon opening. All staff is required to be at work approximately 15 minutes early in order to prepare effectively for their first client.

Throughout the day employees are required to clean their rooms or stations after each client. This includes proper sanitizing of all tools used in the treatment, changing linens, and making sure that it is clean for the next use. During any downtime all therapists are in charge of handling laundry, dusting, and tidying where necessary.

At the end of each day each employee will be assigned a daily duty in which they will need to take a few minutes at the end of each day to fulfill. These duties include cleaning bathrooms, pedicure stations, vacuuming, dusting, etc. Each task should take no longer than 15 minutes.

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The receptionist will be responsible for a variety of tasks during her workday. Along with being required to have full working knowledge of spa solutions software system she will also be answering our multi-line phone with proper etiquette and administrative techniques. The receptionist or owner at the front desk will greet all customers and clients entering the spa. All greetings must be pleasant and thorough and create a welcoming feel for all visitors, these is essential for continual visits as a first impression is always the most lasting. During down time the receptionist will be responsible for keeping client files up to date, confirming appointments, and restocking product in the retail area.

Weekly

Each week all employees will be responsible for keeping up to date with their clients. Ensuring that their visit to the spa met their needs. This communication is also effective in making sure that all clients purchasing products from the spa are completely satisfied and after two weeks of use are seeing the results they wanted.

Monthly

Each month performance reviews will be done in order to ensure each client is getting the proper care and attention. In order to offer our clients full satisfaction during each service clients will have the opportunity to fill out evaluations of their service as well as the provider. These are optional feedback reports that will give us information needed to serve our clients better. These reports will be reviewed each month and discussed during monthly staff meetings. At this time we will also be reviewing treatments to ensure consistency and product knowledge.

At the end of each month an inventory count will be taken and the proper replenishing orders will be made. It will be necessary to make all eminence and youngblood orders one a month and a close eye must be made on popular and new products as these can only be made each month. All other products offered through the spa are found within Saskatoon and are more readily accessible.

All bills will also be required to be paid at month end; this includes utilities, phone/internet, maintenance costs, bank charges and supply expenses.

3.6 Supply Analysis

All supplies other that retail products and products used in services will be ordered through can-west and ESP beauty suppliers. From there River Landing Village Spa will order items such as wax, wax-strips, all nail tools, tweezers, extractors, gauze,

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etc. Towels and linens will be purchased through an organic linen supplier to stick with our Green Spa concept.

Cleaning supply for the spa will be bought through local discount stores such as Costco. From there we will also get our juice, tea, and other refreshments that are offered in our spa lounge.

3.7 Service Providers

Located in River Landing Village Square the Spa will have all electrical, plumbing and technical services provided by mall staff. Any further assistance in these areas will be outsourced to various businesses across Saskatoon.

As River Landing Village Spa has an accountant on location there will be no need for additional financial support or bookkeeping by an outside company.

3.8 Capital Budget

Capital costs for this business venture are low due to the high lease costs each year and the low cost of equipment as well.

All equipment costs are based on prices from Breizh Salon Services in Vancouver, British Columbia. The reason for choosing this supplier is that they are reliable and I have already built a relationship with this business. In addition they offer a 60 day guarantee on all products as well as free shipping. Therefore I feel this is the best decision as their equipment will be reliable and they offer a great warranty on all products.

Table 1 – Initial Investments

Equipment/Furniture 64,650Computers 4,194Leasehold Improvements 75,000Total Capital Costs 143,844

Table 2 – Working Capital

Cash $104,924Inventory on hand $9,558Accounts Payable ($7,171)

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Total Working Capital $107,311

Table 3 - Cost of Goods Sold Service Beginning Inventory - Cost of Service Goods Sold 213,150 Cost of Retail Goods Sold 63,000 Ending Inventory 9,558 Total Cost of Goods Sold 266,592

3.9 Operating Expenses

Operating expenses for the first year of business are predicted as follows:

Table 4 – Operating Expenses

Operating expensesLease 187,500Salaries 100,000Receptionist Wage 23,000Employee Benefits 23,676Insurance 765Bank Charges 600Telephone/Banking 1,920Education/Training 3,520Service Supplies 7,600Repair/Maintenance 1,000Office Supples 1,000Marketing Expenses 11,414Capital Cost Allowance 19,812Interest Costs 5,000Total Operating Expenses

386,807

4.0 HUMAN RESOURCES PLAN

4.1 Organizational Structure

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The Spa consists of two owners, receptionist, two estheticians, and two massage therapists. The owners will operate and run the organization and all employees will have their specific roles to play within it. The owners will act as the management team therefore no manager will be hired. This process will ensure equality and efficiency to the organizational flow. All employees will be treated as equals with limited seniority benefits. This industry is based upon performance and skill and all employees will be rewarded for their achievements in those areas.

4.2 Job Descriptions

Owners One owner will be required to be at the spa at all times during business operation. This will help to ensure that all duties, services and expectations are being met. This decision also allows myself to work as both director and esthetician being able to save on hiring an extra esthetician during the first years of operation. Also it will be important for the owners to be doing active marketing as well as promotional. This will entail a large amount of time devoted to online updates – twitter, facebook and blogs and developing a variety of promotions.

Both owners will be present during the hiring process of all employees to ensure coercion and uniform development. All employees will go through an extensive screening process to make sure they are a perfect fit for the position and spa.

It will be the owners’ responsibility to fill in where there may be areas of weakness. This hands on approach to management will enable us to get a feel for what is working within the spa and what areas need further development. Observing the organizational flow and continually improving on it is going to also be a large part of the owners’ job description.

Receptionist

River Landing Village Spa’s receptionist is going to be the first face and voice our clients see and hear. For this reason the receptionist is required to have an enthusiastic, pleasant, and charming personality. This essential in this industry as it is our job to create an atmosphere of comfort and relaxation.

They will also be required to be able to work well with others in the staff with good organizational ability to ensure all staff is in the proper locations of the spa.

Estheticians

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An esthetician’s persona and the ease in which they carry themselves is a key aspect to finding the perfect candidates. Along with knowledge and skill this asset will be able to carry them through their careers as successful esthetician. Caring and compassion for all clients will be expected by the therapists and complete discretion in order to maintain the security and comfort of all clients.

Massage Therapists

Similar to estheticians it is essential for massage therapists to have the personality for the job as well. Along with that extensive knowledge is a must and they should all have their certified massage therapy training; this is a crucial aspect of the industry as all massage therapy treatments have the opportunity to develop a monthly clientele. Generally speaking in the spa industry massage therapy is what brings clients into a spa and esthetic services are add-ons to keep them happy.

4.3 Recruitment

Being committed to the highest level of service all staff will be recruited from The Blanche Macdonald Centre located in Vancouver. This is one of the top makeup and esthetics schools in the country.

After attending this school myself when I received my esthetics diploma I was able to experience the real-life hands on experience and extensive knowledge that this school has to offer. They insure that all students are developing the proper skills to enter into the workforce. I was also able to build a number of contacts at that time and have access to promote my spa and obtain top recruits. I am also aware that many people across the country travel there to go to school and return home when they are finished. This makes River Landing Village Spa a great opportunity for students from Saskatchewan to return home and secure a job. Having our spa linked to Blanche Macdonald will create a high brand image and create a feeling of ease with all customers. Being in the hands of trained professionals who know what they are doing make all the difference in this industry.

4.4 Training Programs

All therapists hired at River Landing Village Spa will have thorough training and all required certificates. Along with that they will go through expensive training programs within the spa for both service consistency and product knowledge.

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Eminence training is one of the most important training programs that all therapists will undergo upon hiring at the spa. For the first employees hired there will be a three-day program with an eminence trainer who will come and do a run through on all products, the benefits, and how to recommend the proper products to each client. Being able to form the proper product combinations for the most individualized and effective treatments is one of the most important aspects for obtaining the highest skin care results.

LED light therapy – The eminence trainer will also be giving an in-depth training certification program for the LED light therapy that we will be offering through the spa. No therapist will be able to use the LED light therapy without obtaining the certification training.

Training with BioSculpture – different gel nail products have different procedures to obtain maximum results. For this reason a BioSculpure trainer will come to the spa as well for training on this new and improved product line.

It will also be essential for all our staff to have working knowledge of the computer system Spa Solutions and all sales processes. Also for all staff to have a proper understanding of all products and ingredients no matter which area of expertise you have.

4.5 Human Resource Strategy

This industry has a high turnover rate so in order to reduce this we will be dedicated to hiring quality staff committed to their job. River Landing Village Spa has a commission based pay system which also helps with maintaining quality employees. It will also be a goal of the management team to ensure we are working with the employees to establish a consistent and loyal clientele to keep services consistent and workers happy.

4.6 Labour and Management Costs

Table 5 – Yearly Staff Increases

YEAR 2010 2011 2013 2014 2015

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Estheticians 3.5 4.5 5 5.5 6RMT 2.5 2.5 3 3 3Receptionist 0.5 0.5 1 0.5 0.5Manager/Director       1 1

All therapists will be paid on a commission basis; this encourages a strong work ethic upon employees and is a system where they are able to earn what they deserve. In the first year of operation labour costs are minimized, as owner/esthetician will be working jointly as a therapist in order to lower commission costs. As the spa continues to expand additional employees will be hired to meet demand. At year five the spa meets full capacity.

In year four the co-owners will hire a spa director and manager to lessen the workload. This new employee will be hired on a salary basis and have a wide range of administrative duties to fulfill.

4.7 Shareholders’ Agreement

The two owners will own all of the company shares, it is a private corporation. This organization with be operated as a partnership.

5.0 MARKETING STRATEGY

5.1 The Marketing Mix

Services and Products

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The products I plan to use in the spa will also be an important element to retaining clients and promoting retail sales. I have chosen to use pure and organic product lines. The main product line used is Eminece Organics.

The Eminence Organic Skin Care line offers products that are so natural you can see the fresh fruit pulps, seeds, and smell of real herbs. These delicious products smell and feel so good you’ll have a refreshing experience with each use. With a high level of natural active ingredients the results clients will discover will be amazing.

100% reassurance can be made when using these products, which use environmentally responsible practices as well. Eminence chooses to develop plant-based products that use sustainable farming practices and uses wind power energy. By using these products clients prove that they deeply care about their health as well as their beauty. These products are made free of chemicals of any sort and when used on your skin provide a healthy, clear and radiant glow.

This line of skin care products are assured to create an addiction to the natural beauty that emerges with each use. This encourages repeat retail purchases and as all products are used in our services as well clients will soon become drawn to these delicious services as well.

Along with effective products River Landing Village Spa is also able to offer LED Light Therapy, which is exclusively offered through us to add value to Saskatoon clients. This amazing LED Light Therapy System uses safe and effective use of light technology to help to diminish the appearance of fine lines and age spots. Designed by a team of dermatologists this therapy is effective for firming of the skin while naturally making the skin appear smoother, tighter, and much more radiant!

Another natural product used by River Landing Village Spa will be Youngblood mineral cosmetics. This line of make-up is made with mineral pigments from the earth and are much healthier for your skin than the conventional make-up lines we see everyday. It is non-comeogenic and contains no petroleum dyes, which are found in most lines. Mineral cosmetics are also a rising trend within the industry and offering these products at my spa will help to put me not only ahead of the trends but also in line with the more environmentally conscious consumers.

Bio-sculpture is a gel nail product that contains no dust, fumes or odor making it healthier for both our clients and the therapist. This alternative to the conventional methods of gel nail application makes for a healthier spa environment for everyone in the building.

Other lines offered through the spa are our line of nail colors offered through China Glaze and Gewhol foot care products.

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Using only natural and organic products enables River Landing Village Spa to be a part of the Green Spa Program. This invites spas that share in a passion to be eco-conscious to work together in supporting the green movement. All members prove that they are actively involved in environmentally friendly practices including reusable bags, linens, and low voltage lighting. By keeping up with this Green Spa Program will ensure all guests to experience how beauty can feel so good!

Pricing

Table 6 – Service Prices

ServicesPrice

Pedicure 60Spa Pedicure 70Specialty Pedicure 80Manicure 40Spa Manicure 50Gel Nails 6030min massage 4045min massage 5060min massage 6590min massage 100Warmstone massage 8060min Specialty massage 8590min Specialty massage 110Body Treatment 80Specialty Body Treatment 85Body Wraps 105Facial 70Spa Facial 80Specialty Facial 110Bath 30Steam 35Brow Wax 20Lip Wax 15Chin Wax 15Face Wax 30Underarm Wax 20Arms Wax 30Back/Chest Wax 40

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Lower Leg Wax 30Upper Leg Wax 35Full Leg Wax 60Bikini/Brazilian Wax 50Make-up Application 45Bridal Makeup (with trial) 100Total # of services 34Total Revenue $1,975.00Average price per service $58.09

It is essential for our spa to maintain a competitive product and service price line. As this River Landing Spa is high-end spa offering a variety of extra amenities our prices will be aligned with a quality and consistent service.

As River Landing Spa offers an organic professional product line the prices are appropriately aligned for these high active ingredients. With these organic products being handpicked we offer only the highest quality options.

Prices for all products will be a % markup of their wholesale cost. There is a high margin available for all retail products as markup is generally %...

Discounts will be offered for first time customers or clients and can be given upon therapist/owner discretion. Discounts are offered for services only, if by owner discretion there will be no deduction for the therapist. Therapists are also able to offer discounts to preferred or new clients, at that time therapist would be deducted from their cost.

All prices for services at River Landing spa will increase approximately every 2 years as per industry average. Prices for retail products will increase upon inflation or wholesale price increases only. Products will not be discounted in order to maintain their high value and

Promotion

The plan for promotion is to flood the media about Riverlanding Village Spa before the grand opening. We want to create a buzz within both the industry and to the public to make River Landing Village Spa the place to be.

This will be achieved through radio, newspaper, and help from various locations in the downtown core. Examples of business I will market with are Manhattan casuals, Durand’s, Lululemon, and Dina’s. This is a great way to get our name out to the public as well as targeting our ideal demographic.

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With Social media on the rise it will be important of our business to have both a facebook and twitter account. This will give prospective clients an introduction to the new spa opening and create an online excitement. Throughout the life of the buisness this will help to keep in touch with clients as well as continual advertising for monthly specials and discounts will also be communicated this way.

The Grand Opening will be open to friends and public we will offer tours of the new spa, offer drinks and appetizers, beauty fashion show, tips and FAQs about our organization and beauty. During this time potential clients will get to experience the layout and beautiful décor. Along with the ambiance that is set they will be shown our spectacular river view. During the party their will be draws and give-always in order to lure clients to enjoy our spa. Along with this fantastic night we will be displaying our green spa efforts and our plans for future development and community involvement for our spa to contribute to this trend.

There are many trade shows and events that happen in and around Saskatoon that River Landing Village Spa cannot wait to be apart of. Along with community involvement these high profile events help to establish our name and create a positive brand image to all members of Saskatoon.

There are two Bridal Trade Shows that happen each year. The plan for these trade shows is to get established as the modern new facility that Brides’ will chose to be a part of. Being at these trade shows will allow our spa to book bridal parties for both bachelorette parties before the big day, pampering the day before, and make-up that day. For these events we will work with a hair stylist that will come in and be able to offer hair service to members of the bridal party. This will benefit our spa by utilizing our facility and profit from makeup sales. The hair stylist will not be hired by River Landing Village Spa and all hair styling services will be limited to group bookings.

Place

River Landing Village Spa will be located in the heart of River Landing Village on Spadina Cresent and 19th Street. This location is ideal for a spa with many retail stores, hotels, residences, and many restaurants found within the village. This will encourage both street traffic and tourists to enjoy the village and all it has to offer. Being located to such a prestigious hotel on the river will also give our location a lot of opportunity to serve their customers as well. Working in conjuction with local retailers in the downtown core will help to develop a strong brand image within the community and take full advantage of this wonderful location.

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5.2 Segmentation, Targeting, Positioning

The target audience for River Landing Village Spa is going to be young professionals living and working in the village and downtown core, as well as tourists visiting the various hotels and the new hotspot in Saskatoon, the Village. Being positioned as a high end spa we will attract a large number of clients for our location, quality services, amenities and beautiful river view.

Being a Green Spa will also be a great benefit for our spa to take part in the global trend towards a greener environment and be apart of the green spa program.

5.3 Competitive Analysis

The highlighted spas in the competitive analysis table show the main competitors that River Landing Village Spa will have. These include spas that are located downtown such as Angles SalonSpa, riverside spas such as Edgewater Spa, and organic wellness spas such as Sunday Morning Organic SalonSpa and Medspa at Oshun House.

Table 7 – Competitive Analysis

Angles SalonSpa Sunday Morning Organic SalonSpa

ETHOS SalonSpa Spa Ahava CHEL SalonSpa Changes Hair, Skin & NailsJust For You Day Spa Visons SalonSpaBeverly Ashdown Nail Spa Sunsera SalonsBlondo’s on Broadway Medspa At Oshun HouseThe Make-up Studio Ohara’s Salon SpaRiverstone Massage & Esthetics

Clearly Nails

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Paramount Spa & Salon Laser Hair & Skin ClinicEdgewater Spa N irvana Laser Centre

Table 8 - Marketing Budget

Marketing Budget 2010 2011 2012 2013 2014

AdvertisingRadio 5,000 5,100 5,202 5,306 5,412Pamphlets 1,500 1,530 1,561 1,592 1,624Yellow pages 1,000 1,020 1,040 1,061 1,082

Promotions Brochures 2,500 2,550 2,601 2,653 2,706Business Cards 400 408 416 424 433Website 1,014 14 15 15 15

Total Marketing Expenses

11,414 10,622 10,835 11,051 11,272

5.4 Marketing Plan

The Market

The market in Saskatoon is currently on the rise and with our booming economy products and services will a continual necessity for all individuals to enjoy their favourite spa services and retail products.

Competition

Competition within Saskatoon is highly competitive. With River Landing Village Spas expertise within the industry and high level of involvement in environmentally friendly procedures we are able to differentiate our spa from the rest. Offering only the highest quality products in Saskatoon’s new urban center a number of new clients will be attracted to this spa for all their services.

Another advantage our spa has is our spectacular river view. This gives Saskatoon citizens to enjoy the sights of the city while enjoying their treatments. This is unlike any experience at other spas and will help us differentiate our services.

Purchasing Patterns of Consumers

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Consumers buying behaviours are on the rise. Luxury items are becoming more affordable as the average disposable income in Saskatoon is thriving. This works well for our business and location, as downtown is a high cost luxury segment of the city.

Once individuals experience the spa and get comfortable with a specific therapist it is likely when choosing their next spa visit they will decide to come back to River Landing Village Spa. This is true for a number of reasons. The average spa consumer does not like change; when dealing with such intimate procedures and private issues once a client is able to bond with their therapist it is a normal response to continue to see them to reduce anxiety with each visit.

Product Service Features

All products are documented effectively during each visit to ensure that each client is treated with the utmost care with each service. This also helps to reduce any allergy reactions or special treatments to those with specific disorders or disabilities. This proves that we truly care about each guest and that when they return to our spa they feel extremely special and grateful that we remember them.

Sales and Profit Objectives

For the first year of production it is predicted that River Landing Village Spa will be working at 75% capacity. This is a realistic prediction for the first year of production due to the location of this high-traffic spa. Being located in the heart of River Landing Village is a strong strength in order to aid in the success of this new business venture. Along with the high traffic area there will be limited staff working slow hours and have the majority of staff on during peak service times. Also with only six therapists working in the first year and with our spa allowing for nine at full capacity this percentage is an accurate estimate.

For Retail sales in the first year it is predicted that approximately 30% of all services that are done at the spa will purchase retail products at an approximate cost of $80. This is an extremely conservative estimate, as many customers entering the spa will purchase products without receiving a service at the spa. During peak seasons such as Christmas and Valentines Day these sales also increase substantially.

Channels of Distribution

To reach our required target market we are undergoing a number of promotional techniques such as radio, social media, and pamphlets as mentioned above. The most important form of advertising for our spa will be word of mouth and it is

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essential to create a positive buzz for our business. By reaching our target market and meeting the needs of each customer River Landing Village Spa is sure to succeed in creating the right clientele for our design.

By attending various community events and showing our involvement in both the environment and with our city we will be able to establish a strong loyalty with individuals who feel the same. Creating a bond with other Saskatoon citizens and businesses will help to benefit what people think of when they hear our name, and will cause individuals to think twice when choosing their spa of choice.

6.0 FINANCIAL PLAN

6.1 Capital Requirements

As mentioned previously capital costs for this business venture are quite low. This results in little need for high debt and equity financing.

Table 9 – Capital Requirements Capital Requirements Bank Debt 50,000Common Shares 100,000Total Capital Requirements 150,0006.2 Summary of Projected Income Statement.

For the financial analysis of River Landing Village Spa very conservative numbers were used in order to ensure that numbers were both reliable and realistic in analyzing the business venture.

Along with inflation spa service prices increase every two years by approximately 10%. Retail costs increase strictly on inflation and when wholesale costs are increased. With the strategic planning of both scheduling and prices River Landing Village Spa is able to make a profit starting in year 1.

6.3 Summary of Projected Balance Sheet

Table 10 – Summary of Projected Balance Sheet

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YEAR 2010 2011 2012 2013 2014TotalRevenues 753,375 993,059 1,492,94

01,620,127

1,867,571

Net Income 84,480 185,534 424,804 449,163 538,391Cash Flows 104,924 96,9 1 0.5 0.5

6.4 Dividend Policy

Dividends will be paid out starting in year two. With high profit margins this seemed like the proper time to start payout.

6.5 Economic Forecasts

With Saskatoon continually growing this trend is predicted to stay stable over a number of years. Both interest rates and inflation were taken into account when establishing profit margins.

6.6 Break-even Analysis

The goal for the first year is to be working at a 75% capacity rate in the spa, meaning 75% of the time services will be booked with our therapists. This is based on strategic planning of the staff schedule and peak times of service. In order to break-even the spa must be working at a 63% capacity rate. 6.7 Net Present Value

Based on my financial model my net present value is $1,134,527

6.8 Internal Rate of Return

The internal rate of return based on my financial model is 181%

7.0 Summary

River Landing Village Spa is a full service organic spa offering massage therapy and a variety of other amenities. This is a great opportunity for a business venture and has potential offer great profit. As this industry is continually growing this is a great market to tap into and offer Saskatoon a “a natural way to embrace their beauty within.”

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