serenity spa

8/3/2019 Serenity Spa

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Serenity Spa LLC1

81,600,000

VISITORS

$6.8 BILLION

1.0 │ Executive Summary

81,600,000 people visit day spas within the United Statesin a given year, each spending an average of $143 dollarsper visit. ¹

Annual day spa revenues amounted to $6.8 billiondollars in 2004 and are expected to rise above $7.8 billiondollars by 2007. ¹

Day spas have always offered a limited number of services that are safe for expectantwomen. However, many of these spas have placed restrictions on what and when thesewomen can receive these services. Massage Envy, a franchised day spa with 13locations in and around St. Louis refuses to service women in their 1st trimester. TheFace and Body Day Spa, a St. Louis based company with 3 local day spas refuses togive a foot massage to women throughout their entire pregnancy. Expectant women

have found it difficult to find a spa that offers spa services that directly caters to their needs. The needs of expectant women have begun to be met in states such as NewYork, New Jersey, Arizona, and Ohio; and now they must be met in Missouri, specificallySt. Louis.

Serenity Spa LLC has the answer.

Our team has created a spa that will directly cater to the needs of women who areattempting to get pregnant, are pregnant, or have recently given birth. Serenity Spa willmake its services and products available to every woman, but will cater those productsto those women recently mentioned. Our ability to cater specifically to these women isdue to our staffs of certified massage therapists and estheticians who have completed

an advanced prenatal class. Our team will create a spa that enables expectant womento feel comfortable in their ever changing bodies, while providing them with a placewhere they can connect with themselves along with other women who are in similar lifesituations.

Based on our business plan, Serenity Spa expects revenues to reach just over $680K bythe end of year 3. Our team has designed a variety of services that will allow expectantwomen to receive massages, facials, body treatments, and nail applications, all whilebeing pregnant. In addition to our services, Serenity Spa has selected a product linethat is safe, all-natural, and healthy for both our clients and their babies.

Our spa will generate at least three revenue streams:

1. Spa Services (i.e. massages, facials, body treatments, and nail applications)2. Spa Products (i.e. skin treatments, lotions, nail polish, and belly casts)3. Health & Fitness (i.e. yoga classes, health seminars, cooking classes, etc.)



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¹ Industry statistics were derived from a 2004 industry report at www.experienceispa.comSerenity Spa plans to target expectant women through a variety of marketing outlets.We will offer or initial client’s promotions that consist of up to 20% off their returning visit.Promotions such as these will help retain clients and reach new ones through thefollowing marketing outlets. Our marketing plan consists of the following outlets:

1. Word-of-Mouth (i.e. Business Card Distribution and networking)2. Print Advertisements (i.e. local magazines and journals)3. E-Marketing (i.e. “e-mail blasts” and web promotions)4. Covert Advertisements (i.e. hospitals, maternity classes, baby boutiques)

In order to achieve our 3rd and 4th milestone (spa construction and grand opening),Serenity Spa is seeking $450,000 in funds in exchange for 30% equity in the company.

Income Statement Snapshot Financial Projection Case 3

Year One Year Two Year Three

Spa Services $265K $375K $486KHealth & Fitness $33K $70K $70K

Spa Products $62K $95K $123K

Total Revenue $360K $540K $679K

Operating Expense $313K $357K $430K

Income / EBITDA $47K $183K $249K

ROI Snapshot

Year One Year Two Year ThreeNet Income $47k $183K $249K

Return on Investment 0% 0% 6.5%* ROI based on minimum capital contribution of $5,000

Cash Flow Statement Snapshot

Year One Year Two Year ThreeNet Income $47K $183K $250K

Gross Cash Flow $55K $183K $250K

Accounts Receivable $33K $1K $10K

Cash Flow (Operations) $87K $184K $260K

Cash Available $87K $184K $260K

Cumulative Cash $190K $368K $520K

2.0 │ Vision & Mission



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2.1- Mantra

“Serenity, Tranquility, & Maternity”

2.2- Vision

Our vision is to create a serene environment that allows expectant women to connectto their mind, body, and spirit through spa services and education.

2.3- Mission Statement

Our mission is to reach, inform, and educate every woman in the maternalcommunity about the benefits of spa services during pregnancy through educationalclasses and community involvement.

2.4- Values

~ Trust ~ Education

~ Integrity ~ Ethics

2.5- Supporting Attributes

Service: Serenity Spa will offer its clients a variety of spa services that are directlycatered to expectant women. Through our staff of certified massage therapists andestheticians, Serenity Spa will be able to provide its clients with a relaxing andtranquil service that meets all their needs.

Diversification: Our staff will strive to meet the needs of each client. Since awoman’s pregnancy can be a difficult time, Serenity Spa plans to customize itsservices to cater to those ever changing needs.

Community: Community involvement will be essential for the completion of SerenitySpa’s mission. It is our goal to make Serenity Spa accessible to expectant womenwho can not typically afford those services.

Selection: Serenity Spa will appeal to a very niche market. Therefore, it is our goalto offer a variety of services that directly cater to the needs of expectant women.Through these services, Serenity Spa will develop and maintain our clients’ minds,bodies, and spirits.

3.0 │ Service / Product Mix



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3.1- Service Description

All of Serenity Spa’s massage therapists and estheticians have undergone intensiveprenatal training. Due to this training, they are capable of providing a safe massageand facial through ALL stages of pregnancy, not just the 2nd and 3rd trimester likemany spas who do not hire specialists. Since our clients will be at different stages of

both conception and motherhood, Serenity Spa has designed a multitude of servicesthat will meet their needs. Our services have been categorized into 3 differentstages; Preconception, Pregnancy, and Motherhood. Depending on the stage of conception, clients will be able to purchase a variety of services that are safe for their given stage. The following service key will assist our clients in understanding whatservices are safe for their given stage.

Service Key:

= Preconception = Pregnancy = Motherhood

Massages

The Preconception massages will be marketed towards those clients who areattempting to conceive a child, but are currently experiencing some difficulties.These women have most likely visited a fertility specialist and/or OBGYN for advice about their pregnancy. According to a study published in the “Healthand Daily News”, women with high cortisol levels are three times as likely tomiscarry during the first three weeks after conception. The benefits of our Preconception massages will reduce the likelihood of a miscarriage byincreasing the body’s blood circulation, which will decrease the body’s cortisollevels. The benefits of the Preconception massages can aid a couple inconceiving a child.

The Pregnancy massages will be marketed towards those clients who arecurrently pregnant. The Pregnancy massages will be our main revenuegenerator because the majority of our clients will be expecting. In addition, alarge portion of our advertising budget is allocated to attracting these women.The expectant woman is underserved in the St. Louis market due to local spasrestricting expectant mothers from receiving certain massages at certain times.The benefits of our Pregnancy massages will be reduced cortisol levels alongwith a decrease in lower back tensions and pains. According to an articlepublished by the “American Pregnancy Association”, 50% - 70% of pregnantwomen experience back pains due to an increase in hormone levels, additionalweight gain, changes in posture, or stress. Our Pregnancy massages will helpexpectant mothers enjoy more of their pregnancy and avoid a

majority of these routine discomforts.

Our Motherhood massages will be marketed towards those clientswho have recently delivered a baby and/or are ‘experienced mothers’. Serenity

- Preconception

- Pregnancy

- Motherhood



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Spa classifies ‘experienced mothers’ as women who have delivered a baby morethan one year prior. It is important to include ‘experienced mothers’ into thisstage because they too deal with similar stresses that are accompanied withraising a child. The women within this stage are dealing with a variety of differentstresses, such as postpartum depression, lack of sleep, and additional changesin lifestyle, such as career and social changes. New mothers can experience

some form of postpartum depression. A relaxing massage can reduce the levelof stress by reducing the body’s cortisol levels, which in turn can lower thewoman’s chance of experiencing postpartum depression. During the first year,new mothers carry their infants through many daily activities, adding strain totheir bodies.

Our clients will be able to purchase a variety of massages, depending on the stage inwhich they are classified. The following massages have been identified by their given stage and may be purchased by clients who are categorized within that givenstage.

Pregnancy massage……

Swedish massage………

Aroma Therapy massage

Deep Tissue massage…..

Stone massage…………..

Each massage encompasses a multitude of benefits that will enhance the woman’spregnancy given her various stages. All clients will be able to purchase an Infantmassage which consists of a 25 minute session that educates the mother on avariety of gentle massage techniques that can be performed on their child.

According to an article published by the “Healthy Child”, an infant massage can helpregulate the infant’s sleeping pattern, respiratory system, and digestive system, andcan increase the infant’s ability to gain weight. These benefits will help the mother regulate her sleeping pattern and reduce the level of stress in her life.

Body Treatments

All of our clients will have the opportunity to indulge in additional services that areperfectly paired with a massage. The additional services consist of a Foot & Leg ruband a Belly rub. Below is a description of the additional services along with a clientstage description.

A Foot & Leg Rub consists of a 25 minute treatment that involves a seasalt scrub, a peppermint balm massage, and an application of cooling gel.According to an article on alternative-healthguide.com, a leg massage has beenshown to increase blood circulation in the legs, which reduces the appearance of varicose veins and minimizes the amount of swelling around the ankles.



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A Belly rub involves a 25 minute treatment that consists of a

gentle massage of the mother’s belly. The application of products such asborage seed oil has been known to reduce the appearance of stretch marksaround the woman’s belly.

Facials

Facials will be available to all of our clients, no matter what their stage of conception.The use of all-natural products results in a safe application and rejuvenation of theskin. Our facials consist of a one hour treatment that is designed to reduce the lookof aging and stress by removing built-up dirt within the skin. The following facials willbe provided:

The Glowing Mom facial includes a gentle massage of the face, neck,

and shoulders. The massage is followed by a steam mask, which is designed toopen the facial pores, releasing built-up dirt. This treatment will extract clogged

pores and exfoliate the skin which makes the skin cleaner and healthier.

A Hot Stone facial begins with a warm mud mask that removes micro

particles from the skins surface. The warm mud mask is followed by a hot stonemassage of the neck and shoulders. This treatment will create an even color within the skin while purifying the facial pores.

Hands & Feet

Manicures and Pedicures are a wonderful way to end a relaxing day at the spa. Our Hands and Feet services consist of nail treatments or a simple polish exchange.

Below is a description of the following Hands and Feet services.

Starting with the hands, women will be able to indulge in a relaxing

manicure or a simple polish exchange. The manicure consists of a 30 minuteservice that includes a gentle hand massage with a variety of oils followed by ahot towel. Our clients will be able to select from a variety of nail colors that willbe applied after the nails have been filed, buffed, and shined. A polish exchangeconsists of a 15 minute treatment that removes the existing nail polish andincludes the application of a new nail polish along with a shine and buff.

For the feet, clients will be able to purchase a pedicure. The pedicure

consists of a 15 minute soak in a relaxing foot bath that will be followed by a 30minute foot scrub, foot massage, and a nail polish application. Clients who prefer to pamper both their hands and feet will be able to purchase a package thatincludes a manicure and pedicure at a discounted rate.

Fitness & Health Classes

- Preconception

- Pregnancy

- Motherhood



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Serenity Spa will offer a variety of health classes throughout the year.The yoga classes will meet at various times throughout the week and will helpwomen maintain a healthy weight during and after their pregnancy. The yogaclasses will be designed to accommodate those clients who are at different stages of conception.

Expectant mothers will be able to participate in a yoga class that is specifically

designed to meet their needs. Expectant women are limited to certain yogamovements and stretches due to their changing body.

Women who are not expecting will be able to participate in a traditional

yoga class that encompasses all of the yoga movements and stretches.

Health classes will be available for our clients along with their family and friends.Our health classes will encompass a variety of topics that include recent pregnancyand motherhood breakthroughs, such as “Understanding your Baby’s Cry” and

“Healthy Meals for You and Your Baby”. These classes will provide our clients withan educational opportunity to learn about various pregnancy and motherhood topics.

“Understanding your Baby’s Cry” will include a visit from Sally Kiester, who is theauthor of the book ‘A Secret Language of Babies’. Sally claims to have unlockedthe secret language of babies. Her research has found that babies cry differentlywhen they want to be fed, held, and burped. Her visit will help local mothersunlock the cries of their babies.

“Healthy Meals for You and Your Baby” will consist of an all-inclusive hands-oncooking class with a local chef that is knowledgeable in healthy meals thatnourish both the mother’s body and her baby. Cooking classes will be held at

local culinary schools, where clients can achieve the hands-on experience.

“Infant Massage Class” has been designed to gather women who are looking for a mother’s support group. The class will educate them on a variety of

techniques used on infant massages. According to Web MD, doctors suggestthat women who are experiencing postpartum depression should join a mother’sgroup, such as an infant massage class.

Packages

Serenity Spa has designed a variety of packages that will meet the needs of itsclients during each stage of conception. A package for each stage has been

specifically designed. Clients who purchase a package will be able to indulge in our exceptional services at a 15% discount.

Preconception Package consists of Swedish massage, a Hot Stone facial,

and a Manicure / Pedicure. The customer will be greeted with a bouquet of fresh

- Preconception

- Pregnancy

- Motherhood



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cut flowers and treated to a light lunch after she receives her massage and facial. This package is designed to reduce themaximum amount of stress, increasing the woman’s chance of conceiving a child.

Pregnancy Package consists of a Pregnancy massage, Glowing Mom facial,

and one of the following services; Manicure, Pedicure, or Belly rub. The clientwill be greeted with a bouquet of fresh cut flowers and treated to a light lunchafter she receives her massage and facial. In addition, clients who purchasePregnancy Packages will receive a baby gift upon the delivery of their child and acoupon for 10% off their next visit to Serenity Spa.

Motherhood Package consists of a Swedish massage or a Deep Tissue

massage, a Glowing Mom facial, and a Manicure / Pedicure. The client will begreeted with a bouquet of fresh cut flowers and treated to a light lunch after shereceives her massage and facial. This package is designed to reduce thetension of the arms and shoulders along with the lower back while refreshing the

new mom’s appearance.

3.2- Product Description

Spa Products

Serenity Spa plans to offer a variety of products that caters directly to its clients.According to Dot Gieseler, the vice president of Pure Harmony Day Spa, spaproducts can contribute anywhere from10% to 30% of total revenues.Serenity Spa has developed a plan

to ensure that our products willcontribute an average of 20% of our total revenues. Our plan consists of recognizable products and extensiveemployee sales efforts. Offeringrecognizable products consists of atwo-fold approach. First, offeringwell-known, name brand productssuch as Erbabiva, Bella Mama, Belli,and Mustela will ensure that our clients have the safest products for their bodies. Second, Serenity Spa

plans to offer its clients exactly thesame products that it uses in its services. This means that if the client purchases amassage, they should be able to purchase exactly the same oils that were used bythe massage therapist. The products that will be sold in our spa are 100% safebecause they consist of all-natural ingredients. There sometimes is a misconception

- Preconception

- Pregnancy

- Motherhood



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about exactly how safe a product is, but in fact, products are completely safe as longas they never enter the blood stream. In order for products to enter the bloodstream, abrasive services such as chemical peels must be performed.Serenity Spa does not offer any abrasive services that could potentiallyharm its clients. Serenity Spa also plans to offer a variety of maternityproducts such as popular books and videos. In addition, accomplishing

our goal will directly come from our employee’s extensive sales effort.Every massage therapist, esthetician, and nail technician will receive abonus that consists of 5% of the products that are sold by them. Rewarding our staff for extensive sales efforts will continually motivate them to go above and beyond. Inaddition to our product line, Serenity Spa plans to offer other unique products to itsclients.

Belly Casts are an artistic way that a mother can capture the shape of her

belly. The cast consists of multiple layers of paper Mache followed by a thin coatof plaster. The mother will be able to decorate her belly cast or opt to keep itwhite.

The progression picture consists of three photographs; the first term, the

second term, and the third term. Serenity Spa will capture each term by taking asilhouette of the mother’s body. The photographs are then placed in a frame andgiven to the mother.

3.3- Pricing

Accurate pricing is essential to the success of any business. For Serenity Spa, it isno different. We expect our clients to perceive our spa and services to be nothingbut exceptional and feel that our prices are equal to that of the local industry

average. Our pricing was directly derived from spas located in St. Louis who offer similar services in regards to the length of time and difficulty. The following key willaid you in the comparison of different prices. For a complete pricing analysis, pleaserefer to appendix A1.

* Services offered between spas vary, causing vacancies within the pricecomparison.

Services Time

Serenity

Spa

Face &

Body

Spa &

Body

Edamame(New Jersey)

Becoming

MomPregnancy massage 1 hr $78 $78 $70 $98 $75Swedish massage 1 hr $78 $73 $60 $86 -Deep Tissue massage 1 hr $78 $78 $65 - $75Infant massage 25min $40 - - - $75 50/min

Local Spas

Out-of-Town Spas

- Preconception

- Pregnancy

- Motherhood



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Glowing Mom facial 1 hr $80 $80 $60 $98 $75Eyebrow Lift 10Min $15 $22 $15 $17 $15Facial & Lip Wax 10Min $15 $20 $13 $12 $15Spa manicure 30min $30 $28 $28 - $40Spa pedicure 45min $45 $55 $35 - $60Body Cast - $110 - - - $45 per kit

3.4- Partners

Serenity Spa hopes to partner with manylocal businesses that cater to similar clients. Alternative industries that will helpestablish our business along with itsservice benefits are local area hospitalsand children’s retail stores. Serenity Spaplans to partner with Lamaze classes andOBGYN offices that are located in

hospitals such as St. Luke’s, St. John’sMercy Health Care, Barnes Jewish, andother local facilities. The link betweenthese local hospitals and our clients istheir repetitive visits throughout their pregnancy. Expectant women visit their OBGYN on an average of one visit per month, occasionally visiting them multipletimes in a month if they are experiencing complications with their pregnancy.Lamaze classes are also held at local hospitals, which are typically operated bycertified midwives and registered nurses. Classes vary in length and typically run for an average of four to six weeks. In an attempt to give back to these local hospitals,Serenity Spa plans to donate an average of five hours of spa services per month to

each hospital partner. These hospitals will then allocate these services tounfortunate expectant women who cannot typically afford our services. Thesepartnerships will increase our service awareness to much of our target market.According to the St. John’s Mercy website, they alone deliver over 8,000 babies per year. These partnerships will help fuel our word-of-mouth advertisements byestablishing references with the midwives and registered nurses who run theLamaze classes. If a client attends a local partnered Lamaze class, Serenity Spa willdiscount their total purchase by up to 5% and then donate the discount value to theLamaze class.

Along with the previous medical partnerships, the following retail businesses will alsohelp establish our business to those

clients within our demographics. Wehope to establish connections withGymboree, Children’s Place, PotteryBarn Kids, Jilly Bean Boutique,Chocolate Soup, Queen Bee,

http://www.potterybarnkids.com/index.cfm

http://www.potterybarnkids.com/index.cfm

http://www.bluemartini.com/media/global/logos/customers/gymboree_logo_med.gif

http://www.stlukes-stl.com/index.html



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D a y S p a P u r c h

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2 7 %

1 1 %

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1

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S e r v i c e s P u r c

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Kangaroo Kids, and Sassy Pants. Clients who shop at these retail stores tends topossess a higher than average level of income and would be more likely to afford our services. It is our goal to create partnerships with these local businesses in order toreach a larger portion of our potential market. Our plan to partner with these retailstores consists of client discounts and cash kickbacks to the retail stores. If our clients display a receipt from one of our partnered stores for a purchase within the

last 30 days that was greater than $100, Serenity Spa will give that client a 10%discount and a cash kickback of 5% will be given to the retail store. For instance, if aclient brings a Gymboree receipt for a purchase of $100 and decides to purchase an$80 facial along with $20 worth of products, their purchase will cost $90 andGymboree will receive $5. In addition, it is expected that these partnerships will setup similar donations to our spa for referenced customers.

4.0 The Market Place

“The concept is uncommon, and therefore promising, industry observers said. A

pregnancy spa, one that offers service for before, during and after delivery, could appeal to doctors as well as entrepreneurs.”

Lisa Fasig, Cincinnati Business Courier

4.1- Day Spa Industry

The day spa industry has recently seen an emergence of maternity spas. Maternityspas have sprung up in the Northeastern states in the late 1990’s. This emergencecan be linked to several recent trends such as women bearing children later in life,which increases their likelihood of having the disposable income to visit spas.

Based on statistics from the most recent North American Spa Industry report (2003),

the United States spa industry has reached revenues of $11.2 billion dollars. Dayspas, such as Serenity Spa, account for $6.8 of the $11.2 billion. Also, the NASIestimates that there are over 12,100 spas throughout the United States, day spasaccounting for 60% of that estimate. The industry has seen an immense amount of growth in recent years. The NASI projects the day spa industry to grow at a rate of 18% per year, which is evident in the growth of our competitor, Massage Envy.

The largest category of spasin the United States iscomprised of day spas.According to Mintel, the dayspa industry has five main

revenue segments thataccount for a majority of aday spas total revenue.These segments consist of massages, facials, body



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treatments, nail services, and retail products. Mintel also states that 50% of womenwho visit a day spa purchase massages while 28% of women purchase a facial or abody treatment. Also, 50% of women requested either a manicure or pedicure whenthey visited a spa. The Nail Fact Book states that day spas and other nail servicelocations have seen an increase in the desire for manicures and pedicures in recentyears. Mintel also states that 12% of a spa’s revenue comes from the sale of retail

products. Once again, retail products have the potential to generate up to 30% of aspa’s revenue. Day spas account for 60% of the spa industry’s total revenues. Oneof the main reasons for this is because 81% of women who have experienced dayspas will return multiple times within a given year. Out of the total number of day spaclients, 39% of those women are first time users. Day spa clients vary in their services purchased. In fact, 54% of clients purchase one treatment, 27% purchasetwo treatments, 11% purchase three treatments, while 5% of clients will purchasefour or more treatments.

Serenity Spas Potential

Serenity Spa is specifically targeting women who are seeking to become pregnant or

are pregnant. This market niche within the day spa industry is likely to grow inupcoming years. To support this expectation, research performed by the Departmentof Health and Senior Services shows that the Missouri birthrate has increased by 2.4percent from 2002 to 2003. In 2006, the CDC reported that women in their latetwenties (25-29) delivered the highest number of babies. In fact, women in their latetwenties accounted for 115 births per 1,000 births. The CDC also notes that thenumber of births by older women is continuing to increase. The percentage of pregnant women in their late thirties (35-39) is up by four percent. They are nowhaving 44.5 babies per 1,000 births. Also women between the ages of 40-44 haveincreased their percentage by 3%, having 9 babies per 1,000 births. The three agegroups received the largest increases in their percentage change in birth rates.These statistics lead us to believe that older expectant women will have a higher

level of disposable income, therefore having a greater ability to purchase our services.



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4.2- The Competition

The competition for Serenity Spa consists of out-of-town maternity spas and localday spas that offer some form of pre and postnatal massages. Out-of-town maternity

spas are a direct threat to our future success if they pursue the St. Louis market.Serenity Spa has extensively researched each out-of-town maternity spa and hasranked them by there potential threat. Also, extensive research of local day spashas been performed and will follow the analysis of our out-of-town competitors.

Direct Competitors

1. Edamame, a maternity spa that has five locationsthroughout the Northeastern states, is Serenity Spaslargest direct competitor. Currently, Edamame has twospas located in New York City and one spa located ineach of the following states, New Jersey,Massachusetts, and North Carolina. The company was started by RebeccaMatthias, the founder and president of A Pea in the Pod, Mimi Maternity, andMotherhood Maternity. These companies are three very successful maternityclothing retailers that have partnered with the five Edamame spas.

Edamame has been ranked as our largest direct competitor because they havesuccessfully expanded there business throughout the Northeast. The spasgrowth and success is directly correlated to the knowledge and expertise of Rebecca Matthias. She has designed a variety of services, such as her Mom-to-Be New Life Massage and her Absolute Pearl Facial that are beloved by her clients. It is obvious that their maternity concept has exploded in popularity,which is why Edamame posses the greatest threat to Serenity Spa. Their

success is the reason why they have enormous potential to expand operations inthe Midwest. If Edamame recognizes the market potential in St. Louis, they havethe expertise and capital needed to expand. Management at Edamame coulddecide to expand; they are currently not interested in franchising their business,which minimizes their likelihood for rapid growth. This important information wasreceived by Serenity Spas in an e-mail from Kathleen Bozdemir, a customer service supervisor at Edamame.

2. Bei Bella, a maternity spa that has one location inScottsdale Arizona, is our second largest competitor.Bei Bella was started by two sisters Danielle Price-Catalfio and Jamie Tenney. The two sisters noticed a

void in the industry and opened their first spa in October of 2005. Their 2,300 square foot facility caters to the needs of expectant mothersthroughout Scottsdale. They have partnered with the Desert Jewel Obstetricsand Gynecology Center, Pre-natal Peek of Maricopa, which has sent numerousreferrals their way. Bei Bella is currently accepting franchise opportunities and is



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looking to expand, but have currently not expanded beyond their one location.In addition to their success, they have developed a mentoring program for girlsbetween the ages of 11-17 who are pregnant and need community support.

3. Barefoot & Pregnant, a maternity spa that has onelocation in the Casa Madrona Hotel and Spa. The Casa

Madrona Hotel and Spa is located in SausalitoCalifornia, which is a city within the San Francisco Bayarea. Since its launch in 2003, Barefoot & Pregnant hasbeen featured in countless media outlets. One of their most prized media outlets was their feature on “Access Hollywood”, whichgranted them nationwide coverage. They currently have only one location, butthey could potentially expand their business to other luxurious hotels. Barefoot &Pregnant is not interested in franchising their business but they could become apotential partner with local luxurious hotels such as the Ritz-Carlton and theChase Park Plaza.

4. Becoming Mom Spa; located in Mason, Ohio; has one

location that offers a variety of typical spa servicesaccompanied with high tech pre natal innovations. DawnBierschwal, the founder of Becoming Mom Spa, hascreated an innovative spa that incorporates the use of 4dultrasound images. Becoming Mom Spa allows thecustomer to view the video from their 4d ultrasound via the company website.They are currently looking for franchises and are attempting to grow their business outside of Ohio. Their mix of high quality spa services with high techinnovations makes them a major competitor for Serenity Spa. Serenity Spa isinterested in partnering with local imaging centers and hospitals that offer 4dultrasounds. The 4d ultrasound technology would cost anywhere from $50,000 -$70,000 to acquire and would require a specially trained nurse to operate.

Serenity Spa would prefer to leave this to the experts at local hospitals.

5. Zenana Spa and Wellness Center is a revolutionary spathat is located in Portland, Oregon. It was founded byZenana-Renee Rose along with 6 other mothers/partners in 2004. Zenana Spa and WellnessCenter has incorporated a variety of Wellness servicessuch as hypnotherapy, counseling, and acupuncture.These additions have led to their success and have increased their sales. Theyare currently not looking to expand and do not offer franchises. Their lack of expansion opportunities is the main reason why Zenana Spa and WellnessCenter is ranked lowest on our scale.

In addition to the out-of-town maternity spas just discussed, Mama Spa is a mobilespa based out of New York City, which has taken a different approach to meeting theneeds of expectant mothers. Mama Spa is owned and operated by two women whowere the founders of the first mobile spa called Spa Chicks On-The-Go, which was

Becoming Mom Spa & Imaging Center



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created over eighteen years ago. They have recently left that business to directlycater to expectant women who are bedridden and or desire in-home spa services.Mama Spa is capable of delivering spa services, which are similar to a luxurious spa,directly to the doorsteps of their clients. The added convenience of delivering spaservices allows Mama Spa to charge considerably higher than average prices. For example, a one hour massage costs an average of $225, while Edamame another

New York based spa charges $110. Expectant mothers can also choose from anarray of spa services, such as prenatal massages, postnatal massages, prenatalreflexology treatments, manicures, and pedicures. Serenity Spa recognizes theimportance of catering to every expectant woman and will offer our customers similar On-the-Go services at an additional rate of $80 per visit.

Indirect Competitors

Indirect competition will come from local day spas throughout St. Louis County.According to listings in the Yellow Pages, there are currently 47day spas that arelocated in St. Louis County, which a majority offer some form of a pre or post natalmassage. The local day spas in St. Louis County will be the largest indirect

competitor for Serenity Spa. A further analysis of the major day spas has beenperformed, along with a competitive ranking of each company.

1. Our largest local day spa competitor will be the Face &Body Day Spa, which has three locations with St. LouisCounty. The three day spas are located in Chesterfield MO,Brentwood MO, and O’Fallon MO. The company was foundedby Peggy Mitchusson, a local industry leader. The Face andBody Day Spa does not directly cater to pregnant women,however they do offer one service for expectant women, apregnancy massage for $78 per hour. The Face & Body Day Spa does not offer franchising, but they have shown recent growth movements throughout St. Louis.

Since their signature store in Chesterfield, MO, they have shown recentexpansion with the opening of two new day spas in O’Fallon and Brentwoodwithin the past few years. The company does have the financial capabilities andexpertise to enter the maternity sector.

2. Massage Envy, which is a nationwide franchise, has 197operating spas. There are currently 81 spas in the process of opening. There are 13 Massage Envy franchises located in St.Louis with 1 in the process of opening. Their force has made alasting impact on the day spa industry due to their ability to offer lower prices. Their ability to offer lower prices for spa services isthe result of their membership program. A customer can

purchase a monthly membership for $39.99 a month, which entitles them to onemassage that can be used within that given month along with other specialdiscounts that are available specifically to members. In addition to themembership, Massage Envy has reduced the luxuriousness of their spas tominimize cost. The combination of low cost and consistent revenue streams



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have resulted in their nationwide success. Massage Envy does offer a massagefor expectant women, but only during the 2nd and 3rd trimester. The reason whythey do not offer a massage to expectant women during their 1st trimester is dueto the medical concern that the massage could hinder the critical developmentalof the baby. In fact, Dot Gieseler states that 1st term massages are safe, as longas they are performed by massage therapists who have received additional

training in prenatal massage techniques. This is an added cost that MassageEnvy is not willing to undertake.

3. Ginger Bay, a day spa located in Kirkwood MO, has beensuccessfully operating since 1991. The spa was founded byJennifer Vaughn, another industry leader who is locally knownfor her philanthropic contributions. Her generosity is visible inher annual contributions to local charities that concentrate onsocial issues such as abused and neglected children. Ginger Bay does offer a pregnancy massage, in which a Ginger Bayrobe and slippers is given to the mother. Ginger Bay’s clientele devotion willdefinitely be a barrier to Serenity Spa’s emergence into the overall day spa

industry.

4. Scandals Day Spa started in 1995 as a small nail salonand has grown in recent years to an upscale day spa.They are currently located in South County and arebecoming a major force in the St. Louis market. Theyhave a simple goal that is dedicated to pampering,relaxing, and rejuvenating their clients. They too offer a one hour pregnancy massage that is performed bycandlelight and is followed by a warm sage soaked towel. However, they too failto satisfy the needs of expectant women who desire more than just one type of massage. They are currently not offering franchises and have yet to grow

beyond their one location, which minimizes there threat to expand or enter thematernity sector.

5. Spa and Body Options Co. was started in 1997. Sincetheir opening, they have managed to make an impression onthe St. Louis market by offering high quality massages at lower than average prices. For instance, their prices tend to be anaverage of $10 - $15 dollars lower than the local competitorsprices. One of the main reasons why they offer lower prices isbecause of their location in Hazelwood, MO, which has a lower average income. They do offer a pre and post natal massage for $70 dollars,which is $8 dollars lower than Serenity Spa. They are currently not offering

franchise opportunities and their growth appears to be minimal. The reason whySpa and Body Options Co. is listed as our 5th local competitor is because of their ability to offer lower prices. Some clients may value lower prices over moreluxurious facilities that offer services directly catered to expectant women.

Scandals DaySpa



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4.3- Competitive Advantage

Serenity Spa is determined to provide high quality spa services that create a sereneenvironment for our clients. Once opened, Serenity Spa will be the only maternityspa in Missouri. Being early arrivers to the market allows us to reach a much larger

number of clients. Serenity Spa recognizes the possibility that other maternity spascould enter the St. Louis market. A few of our direct competitors are offering afranchise opportunity, which means that there is always a possibility for their entrance into the local market. Furthermore, Serenity Spa has decided not topurchase an existing franchise from our direct competitors because they lack localname recognition. Our certified staff, managers, and future advisors will be able toguide Serenity Spa through the start-up phase by following this business plan. Inaddition to our direct competitors, local day spas could expand their services if theyrecognize the market potential for expectant women.

Our competitive advantages will be clearly visible in the way that we conduct our spa. Our staff will consist of certified massage therapists, estheticians, and nail

technicians. Our staff will have the knowledge to meet our client’s needs during their pregnancies. Employing a staff that is well trained in the requirements of expectantwomen is essential for helping them to truly enjoy their pregnancy. In addition, our classes will provide our clients with the knowledge necessary to ensure that their pregnancy goes as smoothly as possible.

Serenity Spa will also offer an intangible benefit to our clients that no other day spacan currently offer. By providing a place where expectant woman can gather, our internal community will promote the sharing of personal experiences and maternityknowledge. Our internal community cannot be matched by day spas that merelyoffer a prenatal massage or facial. Women that enter our maternity spa will not justbe entering a typical day spa, but will be entering a community that can offer

experiences, knowledge, and education. Our clients will perceive our spa as arelatively inexpensive way to obtain education that can enhance their pregnancy

5.0 │ Company Overview

5.1- Business Model / Revenue Streams

Serenity Spa is dependent upon the desire of expectant women and mothers tonurture and maintain their bodies during and after their pregnancy. The largestcomponent of our revenue stream will be sales from our spa services. This broad

revenue stream consists of massages, facials, body treatments, and nail services.Massages comprise 41% of our total revenue. A Mintel report suggests that theaverage day spa can expect 50% of its revenues to come directly from massages.The reason why Serenity Spa is 9% below the Mintel report average is because of our additional revenues from classes and unique products that typical day spas donot offer. All of the other spa services such as facials and nail services comprise



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30% of our total revenue. It is clear that the success of Serenity Spa relies on our spa services, given that it consists of 71% of our total revenues.

Alternative revenue streams will consist of various spa products, yoga classes, andhealth classes. These revenue streams comprise 29% of our total revenues.Products alone will account for 18% of our total revenue, which is just under the

industry average.

5.2- SWOT Analysis

Strengths

~ Serenity Spa specializes in serving the needs of a market niche.→ Allows Serenity Spa to focus on a specific client, granting the ability to

customize services that meet the client’s needs.

~ Ability to create a spa that allows clients to feel comfortable in their changingbodies.

→ Results in a higher client return rate because of the feeling rendered.

~ Certified staff of massage therapists and estheticians.→ Allows the staff to service every expecting client, no matter what stage

of conception.

Weaknesses

~ Lack of industry experience and knowledge.→ Minimizes the management team’s ability to rapidly expand

operations. Grants valuable time for upcoming competition.

~ Lack of maternity knowledge.→ Could potentially prevent Serenity Spa from meeting the needs of

every client.

Opportunities

~ Partnerships with local hospital and businesses.→ Enables Serenity Spa and its management team the opportunity to

build long-lasting relationships with the local community and businessleaders.

~ Community Involvement and education→ Grants an opportunity to give back to the community by educating the

entire community about the benefits of healthy pregnancies.



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Threats

~ Client’s ability to differentiate our services from local day spas.→ If clients are not able to differentiate our maternity concept from local

day spas, Serenity Spa could lose business. In order to overcome

this threat, Serenity Spa will actively explain the maternity concept inall media outlets.

~ Increased competition from local day spas.→ Indirect competitors could potentially offer more services to expectant

women. This would minimize our market share along with decreasingour level of differentiation.

~ Emergence of maternity spas in the local market.→ The emergence of maternity spas in the local market will decrease our

market share. Serenity Spa does expect direct competition to arisewithin the St. Louis market and will work effortlessly to capture asmuch of the market as possible.

5.3- Milestones

Fall 2004Brittany Crittenden, Serenity Spas founder and President, became intrigued by thematernal aspect of the spa industry. As she looked towards other areas of theUnited States, she noticed that maternity spas were successfully addressing a nichethat could reap great benefits. Additionally she also noted that the Midwest market,most notably Missouri, was lacking a spa that exclusively catered to the maternalneeds of women. It was here that the idea for Serenity Spa was sparked. Brittanybegan her study to determine the feasibility of a Midwest maternity spa.

Spring 2007 After preparing extensive market research, the management team will have decidedon the site of the first Serenity Spa location in the Midwest and will be searching for funds to begin construction. As we will highlight throughout our plan, our location willbe based on various criteria that will optimize our business and marketingprocedures.

Summer-Fall 2007 Construction and design of the first Serenity Spa will take place. At this time themanagement team will begin ordering massage tables, pedicure chairs, manicurestations, and other spa furniture. It will be at this point that the idea comes to life andtakes on physical characteristics.

Winter 2008



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Grand Opening! Serenity Spa will open its doors to serve the expectant women of St. Louis. At this point, the management team expects to begin generating cashflows that will arise from spa services, such as massages, pedicures/manicures, andfacials.

April 2008

Serenity Spa will begin to utilize all of its specialized services. More specifically, themanagement team expects that the regular spa services will generate enoughinterest to initiate our health and yoga classes. It will truly be at this point thatSerenity Spa can begin to further educate the community about the benefits of itsservices to expectant women.

5.4- Management Team

President ~ Brittany Crittenden

Brittany Crittenden has over three years of experience with managing a family owned

small business. Her previous experience has required her to perform a multitude of duties. Some of these duties consist of customer relations and sales performancefollow through. She is expected to graduate from Saint Louis University John CookSchool of Business with a Bachelor of Science in Business Administration with aconcentration in Entrepreneurship in the fall of 2007. VP of Business Operations ~ Gary Hartmann

Gary Hartmann has over six years of experience in managing various businessoperations for Personality Portraits, a small business located in Pacific, Missouri.Personality Portraits employees over 200 seasonal employees and operates in 7states across the United States. Gary’s previous management experience consists

of inventory control and planning, scheduling, and financial management. Job dutieswere comprised of weekly inventory recording, ordering and stocking, creation of schedules for over 100 employees, and daily sales recording that consisted of over/short analysis and previous sales analysis. He is expected to graduate from theSaint Louis University John Cook School of Business with a Bachelor of Science inBusiness Administration with a concentration in Entrepreneurship in the fall of 2007.

VP of Marketing ~ Michael Zimmer

Michael Zimmer has been involved in marketing for three years. In working withinthe marketing department for Zimmer radio group, he was responsible for advertisingplacements and negotiations. In addition, Michael was responsible for the

development of various advertisements for organizational functions. Hisunderstanding of marketing in relation to the success of a business will allowSerenity Spa to flourish. He is expected to graduate from the Saint Louis UniversityJohn Cook School of Business with a concentration in Entrepreneurship in the springof 2007.



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Age Segments of St. Louis

County

35 - 44

166,048

20 - 24

57,773

25 - 34

128,486

5.5- Advisors

Serenity Spa is currently trying to connect with individuals who have experience andexpertise in the following areas by the fall of 2007:

~ The day spa industry (massage therapists / experienced spa managers)

~ The health care industry (registered nurses / midwives)

~ Business start-ups

6.0 │ Our Focus

6.1- Client Description

Our client base will consist of women who are planning to get pregnant, are

pregnant, or have recently given birth. Our typical client will have a moderately highdisposable income and will understand the importance of rest and relaxation inmotherhood. Furthermore, we expect that our clients will have experienced other day spas and will understand the benefits of those services.

6.2- Demographics & Income Analysis

Serenity Spa is expecting the majority of itsservices to be rendered to females within thefollowing age groups: 20-24 years, 25-34 years, 352,307 Potential Clientsand 35-44 years. The management team expectsthat these age groups will be comprised of women

who are most likely to bear children. Accordingto the U.S. Census Bureau, there are 352,307women living in St. Louis County who are between the ages of 20-44 years.Furthermore the U.S. Census Bureau segments St. Louis County into the ages andfigures in the graph below.

Since the management team isexpecting its clients to possess ahigher level of income, it should benoted that the U.S. Census statesthat 38.4 % of households within St.

Louis County make a yearly incomeabove $75,000. As previouslymentioned, our services arecompetitively priced with localluxurious spas. As a result, the



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management team believes that a yearly income above $75,000 will allow themajority of its market to purchase its services.

7.0 │ Marketing Strategy

Women, especially mothers and expecting mothers, have very little time to take care

of themselves. They spend much of their days caring for their children. There seemsto be an overwhelming notion in our society that mothers should “do it all”. Thisunfortunate mode of thinking leaves many women feeling guilty for merely thinkingabout taking time to pamper themselves. Serenity Spa believes that it is essential for women to have the time and location to nurture and care for themselves. Its goal isto transport its clients to a tranquil environment for a few hours of much needed restand rejuvenation. Serenity Spa will employ numerous tactics to gain access to amarket that undoubtedly exists.

7.1- Location

There are currently no maternity spas operating in the Midwest other than the

Becoming Mom Spa, which is located in Mason, Ohio. Major metropolitan areas thatare lacking a maternity spa consist of St. Louis, Chicago, Dallas, Atlanta,Minneapolis, and Denver. Serenity Spa has decided to open its first location in St.Louis because of several different factors. These factors consist of networkingpotential, nationally ranked hospitals, and increasing birthrates. The managementteam of Serenity Spa currently resides in St. Louis, which opens numerous doors for networking and word-of-mouth advertisements. Second, St. Louis area hospitalssuch as St. John’s Mercy and Children’s Hospital are nationally ranked for their neonatal intensive care units, bringing a national light to their childbirth services.Finally, the St. Louis area currently holds 36% of Missouri’s total population, just over 2.7 million people ¹. In addition, St. Louis delivers over 28,000 babies per year, ¹which makes for a relatively large clientele base. With all of this accounted for, the

management team is aware of potentially larger markets other than St. Louis, butbelieves that the St. Louis market can supply the spa with enough clients for the spato reach 100% capacity. While Serenity Spa hopes to expand to meet the needs of these markets, it is believed that the St. Louis market is incredibly conducive to theopening of a maternity spa.

Furthermore, the St. Louis market is completely capable of sustaining the businessoperations. For example, at 100% capacity, Serenity Spa will have a total of threemassage therapists. Through research of the industry, the management team hasdetermined that a massage therapist is capable of performing five one-hour massages during a given workday. This translates into 4,500 massages performedby three massage therapists during a given year. The United States Census Bureau

estimates that roughly 28,000 women will give birth during 2008 in St. Louis County.As previously stated, at 100% capacity, Serenity Spa will only be able to serve 4,500clients, a mere 16% of the women who would potentially purchase its services.



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% o f C o u n ty w i th a F a m i ly In c o m

0

2 0

4 0

6 0

8 0

1 0 0

To w n &

C o u n tr y

L a d u e D e s Pe r e sC la y to n K ir kw o o dB r e n tw o o

¹ Statistics derived from the U.S. Census bureau website.To ensure the success of Serenity Spawithin the St. Louis market, themanagement team has developedcriterion for the selection of the location

for the first Serenity Spa in St. Louis. ~ The majority of the area possesses a

family income above $75k~ The location is mutually accessible

from all areas of St. Louis county~ Proximity to major hospitals

In addition to providing the highestpercentage of family income above 75K,Town & Country is easily accessiblefrom highways 270, 40, and 44. It is also close to St. John’s Mercy hospital, MissouriBaptist hospital, and St. Luke’s hospital. The management team is currentlyresearch available real estate in Town & Country.

7.2- Potential Growth

As previously mentioned, the concept of providing spa services that are exclusivelyoriented towards expectant woman is a relatively new idea. The absence of maternity spas in the Midwest provides Serenity Spa with a blank canvas, in which itcan leave its permanent mark. Serenity Spa has analyzed the following cities for itspotential growth: Chicago, Dallas, Atlanta, Minneapolis, and Denver. In order toadequately determine which cities would be ideal for additional maternity spas, acriterion for their selection has been established and is listed below.

~ No maternity spas already operating within the metropolitan area

~ Median income

~ Multiple hospitals that would offer potential partnership opportunities~ Large population that can supply our spa with clientele

~ High number of births.

Chicago Dallas Atlanta Denver MinneapolisLocal Maternity Spas - - - - -

Median Income 38K 37K 34K 40K 38K

# of Hospitals 9 8 7 7 6

Total Population 9.2M 5.2M 4M 2M 3M# of Births 47K 42K 30K 11K 17K

Score 136 111 94 76 83Rank of Market Entrance: 1st 2nd 3rd 5th 4th

Potential growth statistics were derived form U.S. Census Bureau and City-Data.com



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7.3- Positioning Strategy

“Revolutionizing Pregnancy”

It is important that Serenity Spa embraces its position as the first maternity day spa

entrant into the St. Louis market. With its first-mover advantage, the managementteam will be able to develop a core client base by positioning its spa services as aneeded amenity for women during their pregnancies. In order to successfully orientitself in this manner, Serenity Spa will pursue a two-fold marketing strategy,emphasizing its market development and education.

Initial market development will take on a proactive approach, meaning that itspotential clients will be inundated with Serenity Spa information before its doors evenopen. There are many benefits to women receiving massages during their pregnancies such as: stress reduction and improved blood flow. The managementteam will flood the market with information highlighting the benefits of its prenatalservices.

Once women fully understand that the services are helpful in reducing thecomplications and stresses of pregnancy, it will be much easier to position itself asan essential aspect of a successful and enjoyable pregnancy. A major component of the success of Serenity Spa is dependent upon its ability to successfully educatewomen to the benefits of spa services so that they will view Serenity Spa asparamount to making their pregnancy more enjoyable.

7.4- Marketing & Advertising Methods

The context for all of the marketing and advertising methods will be to educate

women on the benefits of using a maternity spa. The management team will strive todevelop its client base by initiating the following strategies:

1. Word-of-Mouth

Serenity Spa will use many of its marketing strategies to generate referrals fromexpectant mothers and new mothers in the St. Louis area. To promote thebenefits of its services, Serenity Spa plans to create a referral form that will besent to its clients with a brochure of the spa services offered. Furthermore, sinceword-of-mouth marketing is one of the most important aspects of its marketingscheme, Serenity Spa will offer its clients a 5% discount on their next visit toSerenity Spa if they recommend a new client.

Another way Serenity Spa plans to enhance its word-of-mouth marketing effortswill be through the local community. Serenity Spa will provide its staff withbusiness cards and will encourage their distribution. In addition, Serenity Spaexpects a large amount of its word-of-mouth marketing to also come from its



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local partnerships with hospitals and retail stores. Serenity Spa’s managementteam and staff understand the level of trust that is required for successful, long-term partnerships. In order to assure that its partnerships are referring the spa totheir customers, Serenity Spa’s staff must continually promote the partnershipbusinesses to attract new clients.

2. Print Advertisements

Serenity Spa will use multiple local magazines and papers to advertise itsbusiness and educate its potential clients about the benefits of its spa services.Serenity Spa will use the following publications to advertise; Ladue News, AliveMagazine, Suburban Journal, and St. Louis Magazine. The Ladue News is alocal magazine that is distributed in Frontenac, Brentwood, Clayton, Ladue,Kirkwood, and Town & Country. The Ladue News often reports on local charityevents that draw much attention to its magazine. Readers continually glancethrough the magazine to see if they recognize a friend or family member featuredin the charitable section. In addition to the Ladue News, Alive Magazine isanother upscale magazine, whose predominant reader is a 34 year old female.

According to Dot Gieseler, who has used Alive Magazine for many of her advertisements, the minimum monthly cost for a ½ page colored add is $600dollars. Serenity Spa has allocated $1,500 dollars per month to fund variousprint placements. Anywhere from a ⅓ to a ½ of our monthly advertising budgetwill be used to fund these advertisements. The rest of the monthly advertisingbudget will be used to print business cards and other items mentioned in theupcoming descriptions.

3. E-Marketing

According to experienceispa.com, 46% of day spa clients are repeat clientele. Inorder to maximize the number of times its clients return, Serenity Spa will

develop a clientele database that contains the following information; e-mailaddress, home address, business address, phone numbers, and purchasehistory. Serenity Spa will then use this information to send out “e-mail blast”,which consists of updates about Serenity Spa. These updates can vary from thehiring of a new massage therapist, special promotions, new product lines, andupcoming classes. “E-mail blasts” will offer clients a more intimate relationshipwith the spa and its staff. In addition, it will enable the management team tomaintain consistent contact with its clients, enhancing the possibility of having areturning client.

4. Covert Advertising

Serenity Spa’s covert advertising efforts will consist of brochure placements andspecific logo placements. Brochures will be placed in the waiting rooms of localhospitals and OBGYN offices. Unfortunately, doctors can not refer a patient toSerenity Spa for liability reasons pertinent to the doctor’s malpractice insuranceagreements. In addition, hospitals can not release nor can they distribute the



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names of expectant patients due to recent infant abductions. ¹ Brochures will alsobe distributed to partnered Lamaze classes, where the brochures will then beplaced in an informational packet that is given to class attendees.

Serenity Spa will also distribute a well-designed t-shirt that conforms to the

mother’s belly. The t-shirt will have the Serenity Spa logo printed on it, resultingin an increase of word-of-mouth advertising.

7.5- Market Segmentation

Challenge: To create a desire for the use of spa services which are specificallydesigned for expectant women.

In order to meet the challenge described above, Serenity Spa must penetrate thefollowing market segments.

1. Experienced Mothers

These clients are not first-time mothers. They have experienced the strainsof pregnancy at least one time prior to their recent pregnancy. These clientshave dealt with the back pains, the nausea, and the discomfort of pregnancywithout the use of spa services. Serenity Spa believes that these clients willbe difficult to reach because they will have a preexisting notion that they canhave a successful and enjoyable pregnancy without spa services. As aresult, these clients will be the most difficult market segment to penetrate.The management team believes that ‘Experienced Mothers’ will be reachedthrough Alive Magazine prints. Serenity Spa will be able to show the mother how spa services can make a pregnancy even more enjoyable.

2. Health Enthusiast

These clients are primarily concerned with preserving the connectionbetween their minds and body. This preservation is essential for the health of their baby. Along with our spa services, these clients will participate inadditional services such as yoga and health classes. Serenity Spa believesthat this market segment will contribute a large number of returning clients.In order to attract these clients, Serenity Spa will use its “e-mail blast” toinform them about new classes and recent articles that can provide them withup-to-date information.

¹ Information received from John Dubis, President and CEO of Cardinal



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Glennon Children’s Hospital3. New Mothers

.This market segment will primarily consist of clients who have not previouslyexperienced a pregnancy and are beginning to experience its discomforts.Serenity Spa’s services will primarily be used by these clients as a method of

relaxation and rejuvenation. It is expected that these clients will use SerenitySpa primarily as a day spa, possibly multiple times throughout their pregnancy. The management team predicts that these clients will most likelybe referrals from our extensive word-of-mouth marketing.

4. Friends & Family

This market segmentation will consist of friends and family members of expectant women. This segment may or may not be beyond the childbearing years, but may have a friend, daughter, niece, or granddaughter whois in the child bearing years. These women will have seen our advertisements in magazines and will recommend our services to their

relatives and friends or may purchase gift certificates for spa services as ashower or new mother gift.

8.0 │ Capital Required

8.1-The Deal

“Serenity Spa LLC (“Company”) is offering limited liability company interests(“Interests”). The company is seeking a capital contribution of four hundred and fiftythousand dollars ($450,000). The minimum Capital Commitment per Member is five

thousand dollars ($5,000) representing one and a one eleventh percent (1.11%) of the Capital Commitment at the time of initial funding. Member’s Capital Commitmentmust be paid into a business account designated by the Manager at the time of execution and the balance is paid in full to fund the Company investments and to paycompany expenses. The Manager may, in its sole discretion, reject an investmentfor any reason, in which case the investor’s investment deposited will be returned tothe investor. Members will have limited rights concerning company decisionsthrough certain majority and supermajority approval procedures. Otherwise Manager makes all decisions”.

8.2-Exit Strategy

The exit strategy for the management team of Serenity Spa LLC is to continueoperations after the life designated within this business plan. After the 3rd year, themanagement team plans to expand the business. At that time, the business willhave enough positive cash flows that will allow the management team to seekadditional capital through various business loans. Additional capital will be used to



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expand the business through the outline in section 7.2.

9.0 │ Financial Assumptions

Serenity Spa has based the financial projections for 2008, 2009, and 2010 on thefollowing assumptions.

9.1- Overall

~ Serenity Spa expects spa traffic to increase from March to September anddecrease from October to February.

9.2- Revenues

~ Revenues will be generated through the purchase of spa services andproducts

~Revenues were derived from a percentage of our total market.~ Our total market was derived from the following equations:

(MO Population / STL County Population) x 100 = % of MO population living in STL County

% of MO population living in STL County x Number of Births in MO = Total Market

~ 75% of massage purchases will be Pregnancy Massages.~ 15% of massage purchases will be Swedish Massages.~ 5% of massage purchases will be Aroma Therapy Massages.~ 5% of massage purchases will be Stone Massages.~ 10% of customers will purchase Infant Massages.~ 25% of customers will purchase add-ons.

~ 30% of customers will purchase facials.~ 50% of customers will purchase manicure/pedicure during the 2nd and 3rd

quarter.~ 50% of customers will purchase a manicure during 1st and 4th quarter while

30% of customers will purchase a pedicure.~ 1 yoga class will be held twice a week after the 1st quarter and increasing to

2 yoga classes after the 3rd quarter ~ 3 yoga classes will be held twice a week after the 1st year.~ Health & Fitness classes will be held once a month and will consist of 50%

enrollment the first year and will increase to 75% enrollment in the secondand third year.

~ 20% of customers will purchase spa products

~ 20% of customers will purchase a Belly Cast~ 15% of customers will purchase a Progression picture (5% will choose to

purchase the pictures without a frame)~ Accounts Receivable will collect 75% of those months’ sales in the following

month while it expects to collect the other 25% two months after the sale.



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9.3- Expenses

~ Advertising budget is projected to be a minimum of $1,500 per month;although the budget increases each year by the inflation rate (3%).

~ Administrative supplies are expected to be $300 a month for the first year and are expected to increase by the 3% inflation rate. Administrativesupplies include paper, pens, etc.

~ Insurance was estimated and approved to amount to $2000 dollars per month by Dot Gieseler.

~ Inventory was estimated and approved to be $300 dollars a month by DotGieseler. Inventory will increase each year by the inflation rate.

~ Rent was estimated to be $18 per square foot on a building of 3,200 squarefeet. The rent increases each year by the inflation rate.

~ Utilities were estimated and approved to be $500 dollars per month.Utilities include internet, water, and electricity.

~Wages were based on an industry averages from www.salaries.com

~ Wages increase each year by the inflation rate of 3%~ 2 massage therapist, 1 esthetician, 1 nail technician, and 2 store manager

begin in 2008

A 2nd nail technician is hired at the beginning of 2009

A 2nd esthetician is hired at the beginning of 2010

A 3rd massage therapist is hired in at the beginning of the 2nd

quarter in 2010~ Part-time wages will include wages for part-time labor that will work in the

spa on weekends, full-time vacation, or sick leave.



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serenity spa

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