How My Spa Makes $3.3M/Year Through A Robust Recurring Membership Model

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📅 22 novembre 2024 ✍️ By Dylan Edwards ⏱️ 20 Mins Read 🗂️ Blog 🕒 Last updated: 23 novembre 2024

Hello! Who are you and what business did you start?

Hello! I am Loni, the founder of Glosshouz, a full-service day spa, out of Centennial, CO. I created the business in 2016 after a 15-year career as an electrical engineer working for other big technology companies.

I’ve always been the kind of person to pick a challenge, go after it, and grow from there - one day at a time, as my grandmother who I grew up with used to always say. I wasn’t the first person to join the military, US Air Force (as my sister did before me), but I was the first person to finish with a 4-year college degree in my family.

I enjoyed my engineering career, but after working for such big companies, I began to feel insignificant in having a purpose in my career. This led me to develop a burning desire to own my own company. As an engineer, I worked with mostly male colleagues, however, I grew up with all sisters (8 of us) and my personality is such that I have always been the “Friend coordinator” if you know what I mean, getting all of us girls together for occasions and/or keeping the peace in the group. I think this is what led me to develop a business primarily by women, for women. It is very fun and rewarding.

At Glosshouz “spa center” as we call it, we provide twenty different service categories of aesthetic and wellness services - everything from hair salons, blow dry bars, facials, nail services, massages, body wraps, injectables, threads, laser hair removal, waxing, facial lasers, vein lasers, RF Microneedling, body sculpting fat loss/muscle building, brows, permanent cosmetics, makeup application, bridal parties, little girls birthday parties, spa day packages, spa parties, and food & beverage service.

People tend to call it a one-stop shop for all things beauty and wellness.

My aim for the brand is to ensure the spa and our team are the friendliest, and we want our guests to feel very comfortable in the spa and to trust our expertise for all their personal care service needs.

We aim to make everyone happier and more confident when they leave than when they came in. I think we achieve that with our inviting environment, highly-skilled providers, and most importantly, our welcoming team culture.

We’ve grown over the 6 years in business to now have over 1000 monthly members and still growing. Our BFF Savings Program Members see the value in our recurring monthly membership to receive deep discounts in exchange for their loyalty in coming to our business for all their aesthetic needs. Revenue in 2022 was $3,311,338.

Over the years, the business has evolved into a robust recurring membership model that resonates with our guest clientele and benefits our business. About 62% of our revenues annually are from our members.

January 2023 begins an exciting chapter in our business initiatives as we embark on selling our Glosshouz brand and business model as a franchise offering. I’m excited to help other entrepreneurs learn how to be successful with the Glosshouz brand.

What's your backstory and how did you come up with the idea?

In my previous corporate career, I was constantly under pressure from so many angles, trying to balance a work-life situation with my marriage and my now three children. I would leave work in my business suit at 6:30 am and come home around 6:30 – 7 pm each night.

Alternately, I traveled quite a bit for work as well, which does take a toll on a mother. I simply needed a change. I remember a point of inflection in my past when I coincidentally sat next to a person at a wireless conference show I was attending. He commented to me at the time that he was a serial entrepreneur and loved it and would never do anything else no matter what.

From that point forward, I had the incessant bug in mind that I had to do something entrepreneurial. I even tried to get my husband at the time to start a swimming pool-building company, but he was not interested.

Then one day, we got an opportunity to move to Colorado for my husband’s work and we always dreamed of moving to Colorado. This was my chance! I struck a deal with my spouse that if we would move for his job then I would make a career change and start

my own business. He always thought I was a hard-working woman, and I remember at the time he said to me “if anyone can do it, you can.”

So, I resigned from HP, and we moved to the Denver metro area. At first, I did not know what kind of business I wanted to have. I researched all types of businesses and franchise opportunities including technology companies such as cell phone repair, solar panels, etc. (I was comfortable with technology), but in the end, I just thought to myself, why shouldn’t I do something more fun where I get to meet and visit with lots of people and make them happy all the time?

This led me to look into consumer businesses for beauty and wellness franchise ideas such as Dry Bar, Amazing Lash, Spavia, and others. The problem with these businesses, I thought at the time, was simply that I would probably need multiple locations to make the same or less income as I was accustomed to in my corporate career.

I had no desire to have a business that made less compensation than I had been earning previously! Also, at the time, starting one location seemed like a big project, let alone the notion that I would need to start three or more locations! As well, I worried about selecting a business that only offered one kind of service (massage, lashes, blowouts, BOTOX, etc.). I thought this would be too specialized and risky.

What if people stopped doing lashes, or getting a blowout, or whichever service category it was may decline in popularity and something new may replace it soon? I did go down the path in discussions with a massage-type franchise. They were close to my home and very nice people developing the company.

However, in the end, I just didn’t think I could make enough income for it to be worthwhile. Over a few months, I came to realize I just needed to create something that didn’t yet exist. The idea of creating my brand of spa which would be beautiful and offer the convenience of many aesthetic and wellness services began to consume me.

From then on, it became apparent what I would do. My girlfriend back in Texas thought of the word ‘Gloss’ for my spa, and I liked that. I thought it represented glossy hair, skin, nails, and all things polished, but it didn’t seem to represent how big this idea of mine was becoming for a new kind of spa “center”. So, I added the modern ending of ‘houz’ to the name, and Glosshouz was born.

Take us through the process of building the first version of your product

I could tell you about the experience of building the Glosshouz spa center. The journey from concept to occupancy was quite an exciting time. First, you have to convince the bank you have what it takes to start a business. I made a business plan! Ha Ha, I just looked up what I gave the bank back then - it was my guess of conservative annual revenue growth over five years to a little over $2M!

I’m happy to say, we’ve since surpassed that significantly!

Next, came the process of looking for just the right location, about 4000 sqft will be needed. This process is similar to looking for a residential home, except with extra high-stakes negotiation.

You run all over town with a commercial realtor and look at the spaces that you think could work. You stand in the space and in your mind, you think of your imaginary customers standing here, walking there, interacting with staff, etc.

If you can envision it and it is in an acceptable neighborhood, you might move on to the technical step of - is it adequate for the spa build? Meaning how expensive would it be to construct the spa here? You have to consider so many variables that I needed spreadsheets to weigh the pros and cons of different locations I was negotiating at the same time.

There are things like: how many square feet is it, what is the price per sqft, do you have to do demolition of the space before you can get started, does it have the right HVAC, electrical, and plumbing capacity or will that need to be fitted, what is the TI possibility (tenant improvement dollars that the landlord will trade with you), what is the deferred rent possibility, can these be negotiated for the rent price over the life of the lease, what is the lease term, what are the neighboring businesses and do those compete or complement your business, obviously what are the demographics of the population surrounding, and so on…

The thing to understand about lease negotiations is that they can vary wildly from one location to another. This all depends on the landlord’s position and what financial situation they are in about the space. For a lease deal, many levers may move your price per sqft up or down or delay the start of rent, etc. One place I negotiated with suggested no rent for a year. In the end, I went with a TI of $114K and no rent for 9 months to give me time to build.

Next came the process of drawing the space out based on the location chosen to determine just the right flow for the spa space and I wanted to have a refreshments bar in the middle of it all.

We ended up with a plan for 8 treatment rooms, a relaxation room, a luxurious ladies' lounge, a party room, a bar area in the middle of the nail platforms, and the hair colorist room along with a cute blow dry bar area.

This plan I drew out over and over with the architects until it was just right. Next, I had to get multiple general contractor bids and select the one that I thought would do the best job for a fair price, on budget, and on time. LOL, that is hard to predict.

But of course, you have to keep moving forward. So, I did pick it, and as it turns out, we managed to keep it within budget and only slightly delayed past the planned opening date. We opened on Mother’s Day May 8, 2016, just 9 months after signing the lease.

Describe the process of launching the business.

Once we gained the official occupancy permit from the city, we were cleared to open for business! What an exciting time.

I interviewed and hired my opening team all ahead of opening day. So, a week before we were making appointments for guests, we were all in the spa organizing the space and placing all the products and tools and testing systems, etc. We all had our friends and family in to practice completing our service protocols on them and it was a lot of fun.

The day of the launch was Mother’s Day, which is a great time to open a spa. I didn’t know it at the time, but Mother’s Day weekend has turned out to be the busiest weekend of the year for us. We had a little rush of business on that opening day, I remember. We had our website up for months by now, so guest clients were slowly finding us online.

We advertised on Google Ads and Facebook primarily and also attended events for the Chamber of Commerce and even put flyers on cars at the mall. I remember in the beginning, there were days when we would only have 5 or 6 clients all day. Eventually, people started telling their friends and family about us and pretty soon we were developing a steady clientele. The business has grown significantly year over year since then.

It’s not unusual for us to have 100-120 appointments per day now.

Since launch, what has worked to attract and retain customers?

Since I had never owned a business before, there were many things I needed to figure out the hard way. To name a few: how to efficiently advertise an unknown brand for everything we do, how to create a value proposition for our guest clients, how to drive key performance metrics to meet business goals, how to optimize the business to grow profitability, how to build culture and a workplace that attracts great and talented people...and the list goes on and on.

When it comes to strategies and approaches I have used to grow the business, my general strategy is the age-old saying, “do unto others as you would want to be done unto you”. I know that sounds simplistic, but it is the golden rule and it works in every scenario and circumstance.

Experience is the best teacher, but it also does not have to be your own experience! If you can learn from someone that has done it before, they can help you.

When I think about the hospitality of my spa center business, I want us to go the extra mile to make people feel welcome and comfortable –like they own the place themselves. I love it when a guest whips into the spa and says to us “I’ll take a mimosa and I’m headed to the relax room!” This signals to me they are happy and comfortable being with us which is the best compliment ever.

Also, we never want anyone to leave unhappy for any reason. Therefore, we empower each of our team members to take ownership and do whatever they need to ensure our guests feel happier and more confident every time they leave the spa than when they came in.

Over the years, the business has evolved into a robust recurring membership model that resonates with our guest clientele and benefits our business. About 62% of our revenues annually are from our members.

Originally, we had many guests that would only come for special occasions or a specific type of service that they would do over and over, but they wouldn’t necessarily be trying anything else. When we implemented the innovative BFF Savings Program™ our business grew significantly and rapidly. Our BFF Members love the benefits of the program, and I love that it rewards our best clients for their patronage.

It’s a great saving for them, and it promotes them to try new types of services they may not have tried otherwise. Our best clients are those who do multiple services with us regularly, and they find a great value proposition in our BFF Savings Program.

Also, I’m pleased that the medical aesthetics, the medspa part of the business, has significantly grown over time with all of the advanced service offerings we added and due to the reputation of our talented medical aesthetics nursing team. To provide consistently safe services and great aesthetic outcomes our team strives to learn and grow to become very safe and skilled.

If I were just getting started in business, knowing what I know now, the advice I would give myself is to not worry so much in the beginning. It takes time for word of mouth to catch on and to cumulatively grow the business month over month. This is to be expected and is normal.

Also, if I would go back in time, I would have created the BFF Savings Program sooner. Additionally, I would have gotten business consulting or else perhaps read all the business books first so that I would be better equipped to develop our team culture earlier. I believe we would have grown faster and accomplished earlier if I would have known how important it is to tune into developing the type of culture we want at the spa. The important lesson I learned is that once the culture is correct and all team members are driving toward common business initiatives, then everything else seemingly falls into place.

The reason why that works is that now you have like-minded people on your team that truly care and are truly contributing to help grow the business. You cannot do it alone. When the team is right, the customers can feel a positive energy and they experience the quality of our team’s work and see the pride and joy of us working together to make every guest happy every visit.

How are you doing today and what does the future look like?

Early last year I was invited to a Women’s Entrepreneurial group workshop online. I mentioned to the group how the business was doing well and that all my guest clients to the spa are always asking us “Is this a franchise?” “Is this a franchise?”.

At about this time, I was also thinking about expansion for the business, and ultimately growing the opportunities for my team in the business. Someone suggested that I read the book, “Franchise Your Business”. Once I read that book and discovered the process of how it must be done to support success, I determined that of all the avenues available to expand the brand and the business, franchising would be the fastest and most efficient.

As well, I love the idea of helping others become business owners and working with other entrepreneurs to help them gain success with the Glosshouz brand. I am a very detailed and process-oriented person. I believe that to grow a successful franchise system, I need my franchisees to be successful and for that, they need systems and processes to help drive growth.

After the last year of developing these systems, we have just published our Franchise Disclosure Document (our public offering for the Glosshouz Spa Center business opportunity) and we also recently launched our franchise website this month.

We are now actively looking for great individuals who want to start a fun and rewarding business with our Glosshouz spa center brand, and we are prepared to teach you how to be successful with your own Glosshouz spa center business.

What platform/tools do you use for your business?

I use Wix for website development because it is easy for me to use and to be able to change the specials regularly. I believe in transparency for pricing, and I want the flexibility to offer deals and discounts that change seasonally for the holidays.

I also use Constant Contact for email marketing. The user interface is very good and once you have emails you’ve done over time, you can find them by topic easily and reuse them later as needed.

We use MindBody for our spa operating software and it is very comprehensive and easy to use. We also currently use weave for our texting system and our clients love that feature.

What have been the most influential books, podcasts, or other resources?

Oh! Where to start…there are so many.

Podcasts I have been into for the last year have been all things franchising, of course. I’ve probably listened to nearly 3-400 podcasts on this topic. Franchise Secrets, Franchise Your Business, Franchise Empires, Franchise Today, The Franchise Manual, Franchise Findings, Franchise Euphoria, …there are so many and they are so interesting!

They tell the story of different brands and owners and founders. I’ve learned over the last year that there is a whole franchise community out there where an individual or group may own from just one to a handful, to hundreds of locations of one or multiple franchise brands. It’s amazing! Also, there are about 4000 franchise brands out there that may be new having only a few locations to others that may grow to hundreds of locations in the U.S. And don’t forget, the Mac Daddy of them all, McDonald’s, which Google says has more than 14,000 locations in the U.S. alone (they are also international).

For books, I enjoyed “Rich Dad Poor Dad” by Robert Kiyosaki This is a famous book that gives a strong affirmation for why you shouldn’t be working for someone else (you could learn from them until you learn enough to start your business!) A business is a great asset and there are so many financial advantages to having your own business.
Over the years I’ve read and loved all the must-read greats like: The Great Game of Business, Good to Great, Built to Last, The eMyth, Profit First, Traction, and more. Each of these great books departs wisdom that would take entrepreneurs years to learn or figure out, if ever. I was influenced by them all in my strategic thinking, leadership skills, and operational processes learned.
I recently just read the “Win Win Wealth Strategy” by Tom Wheelwright. This book gives a great perspective on taxes. It is an informative read about how we should think of being taxed and how to not be taxed by investing legitimately in government-favored initiatives.

Advice for other entrepreneurs who want to get started or are just starting?

My advice for other entrepreneurs is just to do it. All the plans in the world will not get you there if you do not act upon them. It may seem difficult and intimidating at first, but just take that first step, and once you start doing it, always treat others how you’d like to be treated, use your common sense, and you will figure it out to keep moving forward, keep growing, and you will get to be successful in business.

There’s always a difference between those who say they want to do something and those who do it.

Another tip: I once read somewhere and I agree that when you are first in business for yourself, you run into a tough business problem, and it seems like such an unexpected, monumental crisis at the time that you stay up late at night worrying about it and you need to expend so much energy to work through the problem and be able to solve it.

You have these tough problems, one after another, of all types of new incidents or issues that can have you quite challenged at times. Then, as the years go by-- you still have business problems and issues, but now they are not new.

When it happens the second time, you think to yourself “oh, yes, I’ve seen this issue before. I know what to do in this scenario and it’s nothing to worry about.” You just take care of it as you have learned how to do in the past. Realizing this phenomenon is true has been the biggest relief to me over time.

Experience is the best teacher, but it also does not have to be your own experience! If you can learn from someone that has done it before, they can help you.

Are you looking to hire for certain positions right now?

The Glosshouz spa center is always growing and looking for great hair stylists, nail techs, massage therapists, and nurses (for medical aesthetics).

For the franchising business, I expect to be hiring soon.