Singapore has an affluent population which increasingly has been spending on their well being in recent years. The population here is willing to spend on luxuries such as spa treatments for relaxation or to upkeep themselves. In recent years, though there's an explosion of spa services on scene, there's still room for new players to enter the market in and it indicates the growth that's expected in this industry in the near future.
Compared to similarly developed countries around the region, Singapore spa scene is relatively well built up, regulated and in addition, the established pricing structure is cheaper when compared to similar countries such as Australia or Japan.
Our proposed business model is to recruit masseurs with the right skill sets and attitude whilst paying them a competitive remuneration model which encourages them to treat customers well, whilst at the same time, increasing their remuneration for every monthly target set & achieved. In addition, we will ensure that our operating environment remains conducive and cosy for our customers, aiming to give them a holistic experience whilst under our care. For example, in our foot Massage area, instead of having individual fixed screens with a selection of programs that's centrally controlled or a television on the wall which is common in spas locally, we plan to offer customers a selection of iPads which will have access to premium services such as Netflix and other premium offerings for them to enjoy whilst they are being massaged. This fits in well with our company’s motto of Holistic Wellness for the body, mind & soul instead of customers just getting a decent massage experience.
During our setup, we will explore various available government schemes that are available to startups like our company such as the Productivity and Innovation Credit Grant where up to 40% of eligible expenditure can be claimed from the scheme, subject to a capped limit. The utilisation of these schemes will help offset our startup costs and save our investors cash which can be put to better use.
We have an ambitious target set of a 80% customer retention rate in addition to a even more ambitious target of ensuring each of our customer repeats their experience with us at least twice a month. To help us achieve that, we will be rolling out a series of campaigns on a continuous basis to attract and retain customers whilst at the same time, maintaining a strict recruitment policy in terms of age group and looks for our masseurs. Being mindful to utilise all available slots during our operational hours, we will run an ongoing promotional campaign to fill up slots during "slow" hours to maximise available resources usage. This will help us meet our target of ROI in a year or less. Thereafter, we fully expect a profit of between 25K - 80K per month after costs.
Our management team has a combined experience of more than 10 years in the spa industry in various markets such as China, Malaysia, Vietnam, Indonesia and Singapore. At present moment, once we have our site selected, we have a pool of 7 established masseurs who are prepared to join our company with a notice period of either 1-2 months or immediately. These masseurs are either presently in Singapore, China or Indonesia. In short, whilst we do expect to take some losses during the first 3 months of formal operations, we do not expect any significant monthly losses and achieve either break-even state or better by the 4th month of our formal operation.
We estimate the initial start up cost to be in the region of 150K inclusive of rental deposit, necessary renovations, fittings, licensing, recruitment costs and the like. With another 50K for cash flow and OPEX purposes, we are seeking for a total of 200K investment amount. Out of this, we have currently secured 50K investment and is currently looking for the balance 150K start-up funds.
Besides having a solid team, the location of the spa is equally important with emphasis on convenience, accessibility, and ample parking spaces being paramount. Our management team is aware of this and will ensure that site of our business conforms to the above criteria whilst striving for an area within the identified region that is of a lower cost in terms of rental.
A month prior to the launch of formal business operations, we will focus our outreach and marketing efforts primarily in Singapore and also build an online presence via social media outlets such as Facebook, Instagram, online forums, company website and the like. Our team of masseurs will also reach out to their regulars to lure them over to our business, but though we will run opening specials, our business model will not be focusing on pricing as a feature to pull in customers or to retain them.
The online campaigns are aimed primarily at establishing our spa’s presence and to lure customers to visit by offering special pricing and/or other perks. We will also identify hours that are considered “off-peak” and run a ongoing discounted pricing during those hours in order to maximise the usage of our available resources. In addition, we will also advertise our presence on popular spa review platforms online as well as popular chat apps such as Telegram, WeChat, WhatsApp etc.
Once our operations has been formally launched, we will run campaigns such as customer loyalty programs, customer referral programs and others in order to achieve our customer retention rates and hence focus on our company’s growth and target of ROI in a year’s time. These programs will either take on the form of loyalty points, perks, discounts, purchase with purchase option(s) and credits for referrals.
We fully expect our company’s profits to be in the region of 25-80K SGD (translating to roughly 18K - 55K USD profit per month), after the first 6 months of formal operations. This range is expected to recur in a cylindrical manner mainly because during the PH/Long weekends or school holiday months in the region. If we assume an average of 50K profit per month after the initial 6 months of operation, we are expecting ROI to be fully met in 6 months after the launch of formal operations meaning we should have ROI in a year’s time or less once the business is launched.
Our management team will have monies invested in the business together with the other investors coming on board and we are proposing a equal distribution of 80% of the total profits on a monthly basis based on invested amounts until ROI is achieved. The balance 20% will be retained in case of any business needs.
After ROI is reached, profit taking for all investors will concur on a monthly basis with 70% of total profits being shared equally amongst all investors with the sharing ratio based on each party’s invested amount. The remaining 30% will be retained within the company for future expansion purposes.
Before ROI is achieved, our Management Team will draw no salary or income unless we hit specified set monthly targets which we will discuss with our investors.
Once the income for the first outlet is stable, we are proposing to use part of the profits set aside monthly to set up another 1 - 2 more outlets in Singapore to expand our market reach. Investors will be able to share upon 70% of each outlet’s monthly profits once the new outlets are stable at the break-even point on a monthly basis. The profit sharing for the additional new outlets will however be capped to a total of 2 years (from date when first profit taking happens).
More details can be gleaned by supporters upon contacting us personally. Thank you for your time and contributions!