(Guest post by Rick Duarte)
Recently I had an opportunity to work with fellow spa professional. She had hired me to be her business coach.
I refuse to be called a consultant, because in my past, consultants have done nothing more than tell me things I already know; things that I could have learned from just asking my guests; or used my operation to build their own resume rather than help me improve myself and/or my operation. To me, a “coach” helps you discover yourself, works with you to improve your strengths, and helps you accept weaknesses.
The person who hired me has been in business for over 30 years, with multiple locations. She reached out to me at the advice of a mutual friend, asking if I could help her. She knew that she was behind the times and needed to become current but—more importantly—more profitable. She had built these operations with her own blood, sweat and by her own admission…many tears. She was the leader and innovator in her area and field in the early years, but as the industry evolved and grew, she did not.
But in the end, a coach can only show you the path. It is up to you to start the journey.
Her problem is that she “thinks” no one can do it better than her, she doesn’t trust anyone to run her operations and she has built a “family” culture as opposed to a “business” culture. The truth is that she makes decisions based on sound personal reasons, as oppose to sound business reasons.
Unfortunately, in her mind and her staff’s minds, she is mom, not boss (or leader).
When I spent a couple of days with her it was very apparent that she loves her operations and her staff but is bogged down with the day-to-day management because for her, it is personal—not business. The personal was dragging the business down. She had administrative staff doing jobs that they didn’t have the skill sets to do, and paying them much more than they were worth. Also, because she had been in business so long, she had longtime spa staff members making much more than industry standard. On top of that they were able to dictate their own schedules to optimize their earning potential in the least amount of time. That left very little time for other spa staff to make a living.
As we worked together her phone kept ringing and she took time to handle issues that most CEOs or owners would not have dealt with. She told me there wasn’t enough time in the day for her to manage her operations while building business. I let her talk (vent). She knew things needed to change but didn’t know what to do. She felt responsible for her staff and businesses and didn’t want to let either down, but saw profits continuing to dwindle.
Whenever I take on a project I look at costs and cost controls if there is a profitability issue. We spent a good amount of time reviewing her financials. There were definitely some glaring concerns that were affecting her bottom line.
These would be easy fixes, but the real fix needed to come from a change in management and culture.
The afternoon of our last day together she was to speak at a women’s group function on the topic of wellness and beauty. She was excited to get out and talk to people about the topics she felt so passionate about. On the way, she took couple more staff calls and I could see first-hand how it brought her down. Then she would tell me more about what she was going to speak about and that smile, spark and twinkle in her eye would return.
I asked her why she didn’t hire a manager for each location, or a director for the operations. Her quick response was, “I can’t afford that. Money is already tight.” I asked her how much she thought she would need to invest in a manager(s) or director for day-to-day management. She estimated anywhere between $40,000 and $100,000 per year. I knew she was low on the $40,000, and too high on the $100,000, but I kept those numbers in the back of my mind.
We arrived at her speaking engagement and she had over 100 women engaged and listening to her every word. She promoted living a healthier lifestyle through wellness and beauty, and introduced many of these women to her business. At the end of her speech she handed out business cards with an offer for new customers. She was a great salesperson.
On our way back, I asked her if she knew on average how much each of her customers was worth in revenue in a year. She estimated approximately $5,000. I was impressed that she knew that number so quickly. She told me she was taught the value of customers gained and lost. I then asked her how many of those women she spoke to that day would become loyal customers. She estimated ten.
I told her then that for a half hour of work she potentially gained $50,000 in revenue just from one speaking engagement. As she drove, she turned around and looked at me. I could see the light bulb turning on.
I then asked, “So if you speak once a month you potentially have the ability for increase revenue by $600,000 a year?”
She nodded yes. I then asked, “And how much did you think you needed to pay a manager(s) or director?” A big smile came over her face! Financial problem solved. She could afford to hire someone. She just needed someone to help her look at it in a different way.
I wish I could say this story had a happy ending at that point, but unfortunately I can’t. As a coach, I can point out the obvious to help someone see the path but I can’t get them to start the journey until they are ready. She realized that she needed to step out of operations as it wasn’t her strength. She knew she needed to run the operations like a business. She knew that she would have trouble maintaining her family with a business culture, and she knew that her greatest strength was in sales and revenue generation.
In the end, she just couldn’t bring herself to hire someone to manage operations. Profits will continue to decline and possibly in time her business may be too far gone to survive. She is a smart person, but she can’t let go.
She knows the path, she knows where it will take her but she can’t start the journey until she is ready to change.
Unfortunately, readiness doesn’t always come from being enlightened—it comes from desperation, which by then is usually too late.
Know your strengths, accept your weaknesses. When you are ready to “change” you can be happy and profitable.
Rick Duarte has more than 30 years of experience in the Hospitality industry and serves on the boards of many hospitality organizations. In 1999 Rick was awarded the Financial Excellence Award by the Marriott Corporation, and the 1999 Food & Beverage Department of the Year John Q. Hammons Hotel Properties award. Rick has also been advisor to the Green Spa Network, nominated to the Speakers Taskforce for ISPA Conference (2009), and started the Sundara Inn & Spa Golf & Spa Classic benefiting Breast Cancer Recovery.
I live my life with a very realistic positive view. My mantra has always been, “Everything in life happens for a reason.” I have had my ups and downs in life and though I may not have understood “why” I had that hand dealt to me at that time, I always learned from it. It shaped me into the person I am today and will continue to shape me in the future. Also, I have learned in life to never take yourself to seriously… please meet my alter ego: Capt. Landshark!