P2 Million, Guts And Extra Care

Sunday, August 24, 2008

Michael Jay A. Villanueva, 25, was hesitant when his mother informed him of her plan to go into a spa and wellness business through a franchise.

He was discouraged by stories of his friends who were unsuccessful in their franchising businesses.

But his mom, Marlyn, was persistent.

Marlyn, who goes to spa and wellness centers to relax and unwind, was optimistic and went ahead with her plans.

During one of her spa visits, she met the owner of Grand Royal Spa and discussed about getting a franchise and opening it in Mandaue City, where the Villanuevas reside.

"After further studies on the system and on the market in Mandaue, I realize, it's better to buy a franchise," Michael said.

"Starting our own spa is hard because we don't have any experience, no idea how to start and practically no knowledge on how train the therapists." The Villanuevas are into the furniture business. They own an export company, Brickstone International, and a furniture retail store, Signature.

"When you buy a franchise, you buy the system so you already have a map on what to do with the branch. You (as a franchisee) also get the support of the franchisor," said Michael, an engineering graduate of the University of San Carlos.

Another advantage is spending less in advertisements since the store's name is already an established brand.

Grand Royal Spa has four branches in barangays (villages) Banilad, Talamban, Lahug and Capitol in Cebu City, which are managed by Merrick Anthony Siao.

Other branches are found in Dumaguete City in Negros Oriental, Bacolod City in Negros Occidental and Tagbilaran City in Bohol The Mandaue branch owned by Villanuevas is the only Grand Royal Spa franchise within Cebu.

The family spent P2 million, inclusive of the P300,000 in franchise fee, initial inventory and building renovation to start the branch.

The Grand Royal Spa in Mandaue opened in March 2006.

Michael said the public response was positive especially that it was the only spa and wellness center in Mandaue at that time.

The branch is located near commercial offices so they get a good traffic of loyal clients.

People from the B and C markets, who are business owners and office employees, comprise the majority of their customers.

Competition Two years later, the industry has become more competitive as more spas have opened.

The challenge lies on the entrepreneur's diligence, innovation and focus.

Continuous improvement in the delivery of service and creating a good ambiance is a must, Michael said.

"Some spa centers are offering new kinds of services. That takes a lot of effort on our part. It's good we can reach our franchisor and talk. Innovation is a factor because people always look for something new." Being in the service industry is another challenge for anyone who opens a spa and wellness center.

"(The) spa (industry) is sensitive because you take care of people. A person goes to your spa to experience personal touch. Clients just don't take off their clothes and get a massage. We are in the service industry that needs extra care," Michael said.

With tight competition, the battle may redound to which spa can offer the lowest price.

But Michael thinks otherwise.

"The most important aspect is the efficiency of your service. Are your therapists well-trained? Is your ambiance giving a relaxing feel?" Providing the best service to your customers should be top priority as they are your best advertisers, said Michael.

While he admits that increase in the prices of materials used in the spa has affected the industry, they cannot adjust the prices immediately.

Aside from consulting the franchisor first, he said, a "small change in price will affect the flow of customers visiting a branch." "Spa is a want item. With prices of basic commodities going up, people will attend first to the needs like food. It's important that we maintain price and keep operation cost low." For instance, Michael said, staff members are advised to turn off air-condition units and lights especially in the afternoon when only a few customers come in.

Vision It also helps to focus on the business' vision.

A set of goals on where the business is expected to be in five to 10 years is needed to bring your venture to the next level, Michael said.

"You have to change your mindset when it comes to money and business. It's hard to start when you're scared. You need guts, lots and lots of guts so go all out. Give 100 percent of your effort." The young manager has one advice to budding entrepreneurs: "Business is filled with sharks. Anytime you can lose your business to employees, customers or even to yourself. So be forward-looking and always be prepared."

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