2015-2016

Business Plan
LaVida Massage of Ashburn, Inc.
Financials, Strategy, & Roadmap / October 2014
Bassem, Nahed, & Tim Girgis

43670 Greenway Corporate Dr. P: +1.703.723.7433

Ashburn, Virginia 20147-6985 F: +1.703.723.7443
 Table of
Contents
Corporate Highlights ............................................................................. 1
Management Team ................................................................................ 2
Introduction .............................................................................................. 3
Industry At A Glance ............................................................................. 4
Core Business Model ............................................................................. 5
Prices ........................................................................................................... 6
Services ....................................................................................................... 7
Products ...................................................................................................... 8
Center Design ........................................................................................... 9
Center Location ..................................................................................... 13
Marketing Strategy .............................................................................. 15
Financial Overview ............................................................................... 17
Financial History .................................................................................... 18
Financial Projections ............................................................................ 19
Performance Indicators ...................................................................... 20
Funding Requirements ....................................................................... 21
Exit Strategy ............................................................................................ 22

© LaVida Massage of Ashburn, Inc.

 CORPORATE HIGHLIGHTS

Date Founded June 2011

Market Segments Massage
Skin Care
Initial Investment $428,109
2014 Sales/Revenue $795,967
2014 Gross Profit $100,248
2014 Gross Margin 00.0%
2014 Total Assets $38,332
Active Members 704
Total Employees 28
Facility Size (ft2) 10 Rooms (3200 ft2)
Majority Owner Nahed Girgis

© LaVida Massage of Ashburn, Inc. 1

 MANAGEMENT TEAM

Nahed Girgis
LaVida Massage of Ashburn is owned and operated by Nahed Girgis.
Nahed functions as the manager and has worked in medical aesthetics
and the healthcare industry for over 10 years with a proven track
record. Nahed's combination of education in healthcare and business
management, as well as her experience as a master esthetician allows
her to manage all aspects of daily operation.

Bassem Girgis
Bassem Girgis is a co-owner and has over 25 years of management
experience in IT and engineering. He brings strong human resourcing
and finance expertise and handles the monitoring of sales numbers
and member growth, as well as all aspects of HR such as employee
benefits and staff retention strategies. Bassem also leads in setting
monthly membership and sales goals and organizes staff meetings.

Timothy Girgis
Timothy Girgis handles marketing/advertising, and design for LaVida
Massage of Ashburn. He works to ensure ads are created and sent by
deadline, writes the content of the e-newsletters, and acts as the point
of contact for hired companies such as Mainstreet Hub. He also actively
identifies potential advertising media channels and meets with the sales
reps of those companies.

© LaVida Massage of Ashburn, Inc. 2

 INTRODUCTION
The Business
LaVida Massage is an affordable, membership
based wellness center that offers consumers a
haven where they can relax and experience the
benefits of massage therapy and skin care in a
comfortable, gender neutral, and therapeutic
atmosphere. Our location targets a very broad
segment of the population and operates in a
high foot traffic shopping center in the heart of
The Market
The affordable health and wellness industry is
rapidly increasing as awareness of the benefits
of therapeutic massage continues to grow. The
American Massage Therapy Association (AMTA)
estimates that nearly 9 million more Americans
are receiving a massage than they did 15 years
ago. In fact, over the past 5 years 26% of adult
Americans had a massage, and that number is
expected to grow even more over the next 5
years. Of the 50 million American adults that
discussed massage therapy with their doctors,
62% were encouraged to get a massage, up
from 50% in 2012. Furthermore, according to a
2013 analysis by the AMTA, consumers remain
convinced about the efficacy of massage. 89%
consider massage to be effective in reducing
pain and 87% believe that massage is beneficial
for health and wellness. In fact, 43% of
consumers that recieved a massage had it for a
“medical” reason, such as pain relief, soreness,
© LaVida Massage of Ashburn, Inc.
Ashburn, Virginia. LaVida Massage of Ashburn
is open seven days a week with extended hours
and ten large service rooms for an affordable
and convenient massage every day. After only
three years in business, LaVida Massage of
Ashburn has more than 700 active members.
Membership, revenue, and profit all continue
to increase month over month.
stiffness, or injury recovery. The majority of
consumers who enjoy the benefits of massage
are between the ages of 35 to 49, which also
happens to be the largest segment of both the
American population and labor force. Though
women are still the dominant consumers of
massage, the number of men having a
massage is up nearly 50 percent from 2008.
Both men and women recieved massage at an
overall average of 4.3 times per year. The skin
care market is also seeing similar trends.
Researchers from Mintel expect a steady
increase in demand as economic conditions
improve, and experts at Transparency Market
Research expect the market to report a CAGR
of 6.9% by 2019. Similar to the massage market
trends, the number of men in the market is also
increasing, but at a slower rate than massage.
3
 INDUSTRY AT A GLANCE

Spa Industry Revenue

$15B

$14B

$13B

$12B

$11B

Massage Franchises in 2014

Total Revenue Annual Growth 09-14 Annual Growth 14-19

$2.7B 12.9% 3.4%

Total Profit Total Salaries Businesses

$140M $1.2B 1,831

© LaVida Massage of Ashburn, Inc. 4
 CORE BUSINESS MODEL

Membership Model
A large segment of our revenue comes from “The Life” Benefits Program:
our membership program, which we call “The
• One 60 or 90 minute session per month.
Life” Benefits Program. This offers clients one
• Discounts on additional monthly sessions.
60 minute service each month for $59, or one
• 10% discount on all product purchases.
90 minute service each month for $89, as well
as discounts on additional sessions, add-ons, • 20% discount on face waxing services.
and products without extra “membership fees.” • 30% discount or more on enhancements.

Pricing Strategy
LaVida Massage is, above all else, an affordable
massage and esthetics center. This means that
we must have the best price on every service at
all times in order to maximize sales, and thus
profit, through volume as opposed to higher
margins. It keeps us competitive and gets more
feet through the door, which provides us with
more opportunities to sell additional services,
enhancements, and retail products. The AMTA
recently found that the demand for massage is
extremely elastic, with sales revenue peaking at
$635 per consumer at $50 based on a volume
of 12.7 massages per year. The maximum
amount of massages consumers are willing to
buy is about 13.7 per year, which occured at a
price of $40 per massage.

Price Elasticity of Demand for Massage

Price of Massage Average Number of Total Earned
Visits Per Consumer
$80 5.6 $448
$70 5.6 $392
$60 7.9 $482
$50 12.7 $635
$40 13.7 $548

© LaVida Massage of Ashburn, Inc. 5

 PRICES

EVERYDAY / WALK-IN
Walk in or call any time for a great value on a great massage or skin care treatment!
60 Minute Image Skincare Facial $89 60 Minute Custom Massage $89
30 Minute Image Skincare Peel $89 90 Minute Custom Massage $133.50

“THE LIFE” BENEFITS PROGRAM

“The Life” Benefits Program is a month-to-month membership that gives customers one
massage, facial, or peel each month at our lowest price possible.
60 Minute Image Skincare Facial $59 60 Minute Custom Massage $59
30 Minute Image Skincare Peel $59 90 Minute Custom Massage $88.50

“THE LIFE” ADDITIONAL SESSION

Under “The Life” Benefits Program, additional sessions within the same month are further
discounted, allowing members to take care of themselves and their wallets.
60 Minute Image Skincare Facial $49 60 Minute Custom Massage $49
30 Minute Image Skincare Peel $49 90 Minute Custom Massage $73.50

ENHANCEMENTS
“The Life” Benefits members save an additional 30% or more on all enhancements.
Aromatherapy The Life $1 Everyday $5 Microderm The Life $10 Everyday $12
Warm Therapy $8 $12 Custom Peel $10 $15
Cold Therapy $8 $12 Hand Treatment $10 $15
Foot Scrub $8 $12 Eye Treatment $8 $12
Hot Stones $10 $12 Lip Treatment $8 $12

© LaVida Massage of Ashburn, Inc. 6

 SERVICES
MASSAGE
Swedish One of the world's most well-known massages.
Swedish massage is based on long hand strokes that stimulate
circulation and soothe sore muscles.
Deep Tissue Deep tissue techniques are designed for a
more focused massage by targeting specific muscle groups and
the deeper layers of soft tissue.
Post Fitness An alternative to deep tissue that focuses
more on workout and injury recovery.
Hot Stone Heated stones and oil are skillfully used to warm
up the muscles and improve blood flow in order to accelerate
muscle re-building.
Prenatal Gentle techniques to help alleviate the ailments
associated with pregnancy.
Corporate A chair massage for the desk jockey! This
session targets issues like posture related pain and stress from
high pressure work environments.
Couples A relaxing massage session for two! Enjoy this
massage alongside your friend or sweetheart in our spacious
couples room.
Thai Developed more than 2,500 years ago by a personal
physician to the Buddha, Thai Massage combines stretches,
compressions, and pressure points to release tension.
MASSAGE ENHANCEMENTS
Aromatherapy Scented oils that enhance the experience.
Warm Therapy Warm towels and Sombra warming gel.
Cold Therapy Cooled towels and Biofreeze cooling gel.
Hot Stone Heated stones that relax stiff joints and muscles.
Foot Scrub Soothes, softens and revives sore legs and feet.
© LaVida Massage of Ashburn, Inc.
SKIN CARE
Vital C A facial utilizing the antioxidant qualities of vitamin C
to neutralize free-radicals and accelerate collagen production.
Ormedic An all natural facial that effectively treats skin
irritation and sensitivity. It’s the perfect synthesis of organic
ingredients with medical effectiveness!
Age Later A treatment that helps diminish signs of aging
and environmental exposure while reversing cellular damage.
The MAX A new dimension in skin care that delivers
unsurpassed prevention against the effects of aging on the skin.
Clear Cell A treatment designed to fight acne, reduce
inflammation, and eliminate excess oils to purify the skin.
Ormedic Lift A non-chemical peel that revitalizes skin
using natural ingredients.
Acne Lift A highly effective 30 minute peel designed to
eliminate multiple types of acne.
Wrinkle Lift An intense 30 minute peel that helps reverse
the visible signs of aging.
Lightening Lift A powerful 30 minute peel that targets
targets and lightens skin discoloration.
Microdermabrasion A hand held machine used to
exfoliate dead skin cells and accelerate collagen production.
SKIN CARE ENHANCEMENTS
Microderm Added to a facial for enhanced exfoliation.
Custom Peel Added to a facial to treat skin conditions.
Hand Treatment Softens dry, taught, and cracked skin.
Eye Treatment Helps reduce dark circles and wrinkles.
Lip Treatment Alleviates dry, cracked, and chapped lips.
7

Image Skincare
Statistics from global research firm Mintel show
that 37% of consumers in the skin care market
only buy products from brands they trust. We
had a feeling that this was the case from the
very beginning, which is why we partnered with
the top skin care vendor in the world, Image
Skincare. We use Image Skincare products not
only for services like facials and peels, but also
Retail Strategy
Our strategy for selling products is very similar
to our strategy for selling services. That is, we
focus on a low price and high quality product
in order to sell large volumes. We believe that
this helps reinforce our overall low-price
strategy while also maintaining our focus on
effective results. Furthermore, similar to our
services, members enjoy a discount on retail
purchases, which further enhances the value of
our membership program. Though the bulk of
our inventory is dedicated to skin care
products, we also sell products related to
massage, including massage cremes, oils, and
lotions as well as topical pain relieving gels like
Biofreeze and Sombra. In addition, we sell
products related to health and wellness such as
© LaVida Massage of Ashburn, Inc.
PRODUCTS
post-treatment maintainence and prevention
in the form of retail products. Image Skincare
has eight core product lines that each address
a different skin condition. These lines are
Ageless, Vital C, Ormedic, Clear Cell, The Max,
Illuma, Prevention+, and Body Spa. All products
are color coded to ensure that they are easily
identifyable for repeat purchases.
Clear My Head head ache relief products,
aromatherapy oils and diffusers, and other
essential oils. Seasonal products and gift items
are also offered in many occasions. Currently,
retail sales account for 7% of our total monthly
revenue. Sales for retail products have been
steadily increasing, and we expect retail sales to
account for at least 10% of our monthly
revenue by the end of next year.
8
 CENTER DESIGN
Exterior
The exterior of LaVida Massage of Ashburn has
been designed with a hyper-detailed focus in
order to make a lasting first impression. In
order to overcome the stereotype of being just
another “hard-sell membership” spa, the
signage was designed using various shades of
silver, similar to that of a medical or corporate
Atmosphere
The interior of LaVida Massage of Ashburn is
designed with a gender neutral focus in order
to invite both male and female guests to enjoy
the benefits of massage and skin care. The
design is based on the LaVida Massage brand
and focuses heavily on green tones with some
earth tones such as dark brown and beige used
as accents. In addition, decor has been selected
Layout
Due to a strategy focused on low-price, high
volume, LaVida Massage centers are typically
around 3,000 square feet or larger. This allows
the center to utilize a “honeycomb” layout in
order to maximize the amount of services that
can be accomodated each day. The LaVida
Massage of Ashburn center is 3,200 square feet
and has 10 total rooms, three of which can be
© LaVida Massage of Ashburn, Inc.
facility. Additionally, tastefully designed posters
have been hung on the windows to promote
our introductory 60 minute session at $49, as
well as a large scale menu poster which shows
all of our services and prices. Our goal isn’t just
to acquire new guests, it is to convince them to
become repeat guests from day one.
with “modern organic” styling in mind. We
believe this styling helps reinforce the notion of
relaxation and wellness, without compromising
the notion of being a modern brand that
focuses on effective treatments. The modern
element also serves to differentiate us from our
more “hollistic” competitors, which usually do
not focus on well known effective treatments.
used for skin care treatments, and one that has
two massage tables in order to accomodate a
couple’s massage. In addition, our center has a
larger than usual lobby, in order to accomodate
more clients during check-in and check-out.
Our large lobby also allows us to dedicate an
entire area to retail products, which helps us
display and ultimately sell more products.
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10 © LaVida Massage of Ashburn, Inc.
Retail Shelves
9’-6”
9’-6”
11’-0”
11’-0”

11’-0”
11’-0”

11’-0”

9’-0” 7’-0”
9’-0” 10’0” 10’0” 10’0” 10’0”
3’-0”

3’-9”
3’-6”

8’0”
3’-6”
15’-4”

39’-6”
10’-0”
10’-0”

10’-0”
10’-0”

3’-0”
9’-0” 12’-2” 10’-0” 10’-0” 10’-0”
3’-6”

6’-11”
10’-2”

10’-2”
10’-2”
10’-2”

6’-9”
6’-9”

19'-6" 6’-0” 6’-0” 10’-0” 16’-0” 10’0” 10’0”

Planned Layout (Future)
Retail Shelves 7’-11”
11’-10”
11’-10”
11’-10”
11’-10”

10’-3”
11’-6”
9’-0”
10’-9” 9’-0” 9’-3” 7’-6”

3’-0”
3’-9”
3’-6”

8’0”

39’-6”
8’-6”
8’-6”
8’-6”
8’-6”

3’-0”
7’-3” 7’-3” 11’-9” 11’-9”
3’-6”

10’-6”
8’-10”

8’-8”
8’-8”

6’-9”
6’-9”
6’-3” 6’-3” 10’-1” 14’-6” 11’-0” 10’-2”
Existing Layout
11
12
 CENTER LOCATION
Shopping Center
LaVida Massage of Ashburn is located in The
Shoppes at Ryan Park, a 93,501 square foot
shopping center by Edens that is strategically
placed in the center of the Ashburn area, off the
Dulles Greenway. This location successfully
targets Broadlands, Brambleton, Ashburn
Village, Lansdowne, and parts of the Sterling
area. The center is anchored by several big
Region Demographics
The Ashburn, Virginia area benefits from being
in Loudoun County, the most affluent county in
the nation, and the fifth fastest growing county
since 2000. The area within 15 miles of our
center holds a population of 818,209 indivuals
with an average house hold income of about
$146,573 and the area within one mile of our
shopping center holds a population of nearly
10,000 individuals with an average house hold
income of $137,049. In addition, another 8,800
residential units have recently been built within
a half mile of the shopping center, and the
Ashburn silverline metro is slated for arrival
© LaVida Massage of Ashburn, Inc.
name brands including Giant, Home Depot,
Chipotle, Red Robin, Tropical Smoothie, Panera
Bread, and Wells Fargo. The shopping center
also enjoys ta diverse tenant mix with smaller
retaurant and retail chains. Finally, The Shoppes
at Ryan Park includes an Exxon, which increases
vehicle traffic in the center as it is one of the
few gas stations in the Ashburn area.
directly next to our shopping center in the next
2 years, which will further increase access to the
center, and thus increase overall foot traffic. In
preperation for the Silver Line Metro, another
large apartment complex has just been
completed next door to the shopping center,
which further improves market viability by
increasing the population within a walking
distance. The Shoppes at Ryan Park is
conveniently visible and accessible via exit 6 off
the Dulles Greenway, a private express toll road
that sees an average traffic count of about
46,000 vehicles per day.
13
14
 MARKETING STRATEGY
Target Demographic
We target a broad segment of the population
that includes working professionals, retirees,
stay-at-home-moms, and atheletes. Our center
is located in a convenient, high foot traffic
shopping center with thousands of available
time slots per month. According to Reilly's Law
of Retail Gravitation, the distance buyers are
willing to travel for products and services is
Advertising Strategy
By educating each market segment about the
benefits of our services, LaVida Massage is
seen as an affordable necessity rather than a
luxury. Strategic marketing techniques are
implemented in order to effectively reach all
ideal segments of the population. Through the
use of print ads, online marketing, newsletters,
and event marketing, we successfully created a
Media Channels
MEDIUM CHANNEL
Print Valpak, Direct Mail
Online Email, Website, SEO
Social Media Yelp, Facebook, Twitter,
Google+, Four Square
© LaVida Massage of Ashburn, Inc.
is directly affected by their perception of the
store as a "destination." LaVida Massage is
located next to multiple anchors, including
Giant, Home Depot, Chipotle, and Panera
Bread, which allows potential clients to visit us
during convenient times and makes a trip to
LaVida Massage a worthwhile addition to any
shopping routine.
distinct brand for LaVida Massage. In addition,
we maintain a strong social media presence in
partnership with the experts at Mainstreet Hub,
a proactive social media strategy development
company. This has provided us the advantage
of an integrated campaign on Facebook, Four
Square, Twitter, and Google Plus, as well as the
ability to issue fast responses to yelp reviewiers.
MONTHLY COST EST. RETURN
$1,040 $2,450
$763 $4,900
$400 $650
15
DIRECT MAIL ADS

© LaVida Massage of Ashburn, Inc. 16

 FINANCIAL OVERVIEW
Financial Plan
The key to our financial strategy is constantly
maintaining and improving the factors that
create and increase our revenue. Because of the
per service structure of our payroll, our variable
costs exponentially exceed fixed costs, which
translates into healthy cash flow, as we only pay
when we make a sale. We surpassed our break
even point after our first year, and ended the
Purpose
After three years of success, it is time for LaVida
Massage of Ashburn to expand and renovate.
We require funding in order to consolidate our
short term loans, expand retail inventory, and
to renovate our facilities, as well as to increase
the frequency of our marketing. The table
below shows an itemized list of how we plan to
use the funding we seek. It is important to note
© LaVida Massage of Ashburn, Inc.
second year with a net profit of $71,511. Our
financial performance over the past three years
and a trend analysis for the next three years is
presented in this financial plan, as well as a
detailed list of our expenses, and a breakdown
of the funding that we need to further expand
our business.
that the initial center build-out was funded out
of pocket, which later required us to obtain
short-term, high interest loans in order to reach
level of success that we now enjoy. We believe
that obtaining long-term financing will provide
us with much needed capital to achieve our
next milestone, which is to double our current
member base and ultimately increase revenue.
17
 FINANCIAL HISTORY

HISTORY 2011 2012 2013

Revenue 158,491.00 700,430.00 795,967.00
Expenses 428,109.00 628,844.00 715,219.00
Net Profit (Loss) (269,618.00) 71,586.00 80,748.00

2011 2012 2013

Revenue Net Profit (Loss)

© LaVida Massage of Ashburn, Inc. 18

 FINANCIAL PROJECTIONS

PROJECTIONS 2014 2015 2016 2016

Revenue 845,000.00 990,000.00 1,135,000.00 1,280,000.00
Expenses 735,150.00 861,300.00 987,450.00 1,113,600.00
Net Profit (Loss) 109,850.00 128,700.00 147,550.00 166,400.00

2014 2015 2016 2017

Revenue Net Profit (Loss)

© LaVida Massage of Ashburn, Inc. 19

 PERFORMANCE INDICATORS

20%
Sales Closing Rate
We get approximately 150 new clients every
month, 20% of which are then converted into
members. That equates to an average of about
30 new members every month. Our ultimate
goal is to drive in 200-250 new clients per
month and increase our closing rate to 30%.

Membership Retention

83%
We currently have about 705 memberships, of
which 83% are retained each year. That means
we only lose about 119 members each year,
which is significantly above industry standard,
expecially considering that we do not have a 12
month locked-in contract as most of our
competitors have. Ultimately our goal is to
drive up our retention rate to about 90%.

241
Membership Increase
With 360 new clients each year and a retention
rate of 83%, we add about 241 new members
each year, which results in an increase of about
$92,424 in revenue per year. This amount is in
line with most of the industry’s top locations.
With our current numbers, we expect to nearly / year
double our current revenue by year six.

© LaVida Massage of Ashburn, Inc. 20

 FUNDING REQUIREMENTS

BREAKDOWN OF FUNDING REQUIREMENTS

Debt Consolidation $164,124 Retail Inventory (6 mo.) $33,500
IOU Short Term Loan $30,000 Image Skincare $18,000
American Express Loan $23,365 Control Corrective $10,000
Credit Card Debt $95,833 Other Vendors $5,500
Marlin Bank Equip. Lease $14,926

Total Funds Required $197,624

ESTIMATED RETURN ON FUNDING - FIRST YEAR

Debt Consolidation $111,358 Inventory (6 mo.) $26,800
Credit Card Debt $32,544 Image Skincare $32,400
Short Term Loans $107,196 Control Corrective $18,000
Equipment Lease $5,134 Other Vendors $9,900
--------------------------------------------- ---------------------------------------------
New Loan Payment - $33,516 Original Investment - $33,500

Net Return (First Year) $138,158

© LaVida Massage of Ashburn, Inc. 21

 EXIT STRATEGY
Contingency Plan
Based on our projections, we plan to stay in this
business for years to come. However, in the
event that we decide to exit at any point in
time, our exit strategy is simple. We will start by
using a harvesting strategy, which means we
will reduce all costs which are unnecessary for
the operation of the business. At this point the
franchise will have the first right to purchase
© LaVida Massage of Ashburn, Inc.
our center, and we expect that they will, as we
are among the franchise’s most profitable
locations. Should the franchise wish for a sale
to a different owner, then we would likely profit
even further, as it would result in multiple
competitors entering a bidding war for our
center, which has happened when other similar
businesses were put on the market in the past
22