I want to open my own business someday – Ten questions to see if you are ready

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Article courtesy of spatrade.com

By Douglas Preston www.prestoninc.net

Whether you’re an esthetician, body therapist, hairdresser or manicurist, chances are you’ve dreamed of running your own spa or salon one day. It’s an attractive prospect, isn’t it? Being your own boss, setting your own work schedule, making a lot more money—who wouldn’t want a future like that? Then there’s the prestige, long vacations from a business skillfully managed by trusted employees, and the big cash buyout when it’s all over and you’re ready for an early retirement. This would truly the way to go—if  it were the whole reality. Now let’s look at business as it most likely proves to be for the brave entrepreneurs among us.

I’m a spa business consultant. I’m hired to fix businesses that have broken down or are about to, and there are many, many of them out there—some aware of their problems and others still in denial about them. They all have one refrain in common: “I never thought it was going to be like this!” And it seems that no one ever does, which possibly explains why so many Americans are eager to rush into the high-risk, demanding embraces of independent business ownership.

Don’t get me wrong here—I’m a successful independent business owner myself twice over, and I wouldn’t reverse that fact for anything in the world. But, I’m also one of the lucky ones, a rare survivor in a sea of foundered and forgotten companies that have put the small business failure rate at a staggering 99% over 10 years. I waded, worried, and writhed through a perpetual tempest of threats to my companies: three recessions, three fires, three lawsuits and countless employee defections with clients in tow. We had every imaginable financial crises, equipment breakdowns, earthquake disruptions, and new competitors closing in from every direction. Somehow, miraculously, we navigated safely around the rocks and shoals to stay profitably in business for 20 plus years. And the personal cost for this achievement?

Thousands of long, unpaid hours of work, threats from worried bankers to close our deeply overdrawn accounts, the erosion of a partnership/marriage, and the terror that caused the awful sleepless nights that had become an unavoidable facet of life. I never thought it was going to be like that!

So for those of you who are about to trace the footsteps of the hardy, the foolish, or the fearless entrepreneurs of spa business investment, evaluate your willingness to face the realities of your probable future as detailed in the questions that follow!

1. Can I financially and/or willingly accept a potentially long road to making money, any money?
The stark reality is that you may go many months, or even years, before the tide of cash begins to flow in a positive direction—that is, if it ever does. Most new business owners end up funneling far more up front cash into it than they ever imagined they would, and unfortunately many go into business without realizing what kind of cash reserves will be necessary to stay afloat. In addition to the financial resources, you will also need large reserves of confidence to keep your spirits high as you work hard for very little initial return. You are almost certain to experience this! Do you want to? Can you afford to?

2. Am I willing to work long hours without a break for little or no money, no gratitude, and no end in sight?
It’s important to realize that work-free vacations, relaxing weekends, and sleeping in will probably not be your realities as you build a business. Work/life balance also becomes very difficult as the constant demands of owning a business settle in. Your new reality will include a vast workload, including emergency calls at home or on your cell phone at any time. Be prepared to cancel plans at the last minute to fill in for an employee who calls in (or doesn’t call in) sick, to do the most menial jobs at the spa, and face the ire of angry clients affected by your battered service schedule.

3. How will I keep (or afford to keep) my employees around now that we’re not as busy as we expected to be?
Even if you’re paying your team a wage or salary there’s little that they loathe more than a flat service schedule. Boredom sets in faster than brown spots on bananas, and you’ll soon be dealing with an expensive and restless crew. Without the know-how or skill to inspire them during the lulls all new spa businesses experience, you’ll soon be spending your precious time recruiting, training and interviewing in regular cycles. What fun!

4. I thought that I was hiring professionals! Wasn’t I?
Uh-oh! The unfortunate revelation all spa owners discover has arrived at your threshold, too. Your spa therapists seem to have a curious habit of showing up late for work, running late on appointments, ignoring the dress code and slacking on sales of your retail products. How can they be so unprofessional?

One thing you will learn very quickly as a business owner: as wonderful and professional as some of your staff may be, employees will not care about the business the way you do—ever.

5. Do I know how to bring in customers?
Your potential customers are out there—circulating in the great mass of your local population, one that won’t necessarily drop everything and flock to your new (and possibly me-too) spa when you open your doors. Think about it: do you notice every grand opening you read about, even if it’s a business you might eventually patronize? As the Wicked Witch of the West said, “All in good time, my little pretty, all in good time”! You’re going to have to work hard to get noticed, then convert that attention into steady, long-term business. Until then, you’ll need cash reserves or a credit line to keep you afloat.

6. Do I know how to find good employees?
Great recruiting takes skill and time. Be prepared to educate yourself about good interview techniques and to talk to a lot of people before finding the professionals that will really help your business thrive. You can also count on the fact that recruiting is an ongoing and often constant activity throughout the life of a business.

7. Do I know how to manage people?
As a potential business owner you are about to set yourself up to be the leader of people, the example, the one that all turn to for direction and motivation. Even if you put a wonderful manager in place, you are still the ultimate authority in this operation. Management ability, patience, and firmness in the face of inevitable employee challenges are crucial to success—no wimps allowed. Are you really up to, and willing to take on, this challenging task?

8. I don’t like financial figures, computers, record keeping, and inventory management. Is it really such a big deal?
Yes, it is. While you may be able to hire someone to help you with accounting or business management, that doesn’t mean that you can ignore the numbers and what they say every day about your operation. Sticking your head in the sand when it comes to understanding these crucial indicators of business health will very likely lead you into financial trouble—and quickly.

9. But our concept is different! That’ll make the difference, won’t it? Won’t it? WON’T IT?
No, it won’t.

10. I have business partners that will help me through the rough spots so we’re going to be fine.
Yes, and the Titanic had a captain, first officer, a chief, and even the ship’s designer on board. Still she sank. It was what they overlooked that sank her, not what they believed they already knew. Little good that did then. It was the sister ship that benefited from the lesson—a retrofit the first one needed from the beginning.

There are two phrases you should never utter when forging ahead into a new business venture: “We’ll deal with that when we come to it,” and, “We already have that solved.” Revisit your plan often, get the opinion of a qualified professional, and prepare for the ride of your life! With skill, determination, money, and lots of luck you just might reach the end of the rainbow. Those of us who’ve made it can attest to the hard work but also the joys of success.

Best of luck to you!

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