Entrepreneurship & Small Business

Disagreement with my wife on location for Spa

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Member
Dec 7, 2005
263 posts
54 upvotes
Pickering
colossk wrote: This is terrible advice and yes I own a business. I've been self employed with multiple storefronts my entire adult life. You don't choose one location over another because it's cheaper and it mitigates risk unless both locations are equal. From the sounds of the OP he is leaning towards one location over the other solely because it's cheaper, and not by much.

Also it's not losing just 12k. He's going to end up signing a personal guarantee to the landlord. Whoever posted in this thread that most commercial landlords don't ask for a personal guarantee are living somewhere else than the rest of us
That was me. I'm living here in the GTA and like you have many commercial leases under my belt. I have NEVER, not once, signed a lease with a personal guarantee. As in everything in life terms are always negotiable. I don't know why on RFD of all places, where YMMV is a common term, when we get into the small business section people seem to forget that and think that just because they couldn't get something done and negotiated it's not common / possible ?
Deal Fanatic
Nov 17, 2004
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colossk wrote: This is terrible advice and yes I own a business. I've been self employed with multiple storefronts my entire adult life. You don't choose one location over another because it's cheaper and it mitigates risk unless both locations are equal. From the sounds of the OP he is leaning towards one location over the other solely because it's cheaper, and not by much.

If one location is superior than the other, it's a no brainer. You go for the superior location because it has the best chance of success, not because the other location will mitigate your losses

Also it's not losing just 12k. He's going to end up signing a personal guarantee to the landlord. Whoever posted in this thread that most commercial landlords don't ask for a personal guarantee are living somewhere else than the rest of us
I have no idea about the personal guarantee. The economy is not booming, so it is odd to me that personal guarantees are the standard and non negotiable. If the landlord requires a personal guarantee then go find a place that does not need that. The personal guarantee is non-sensical to me. The landlord is in the business of being a landlord, the OP wants to rent/lease space from the landlord to start his business. The landlord must be giving you a fantastic rent/lease rate to warrant the total risk transfer from the landlord to the tenant. If the rent/lease rate is high and you have to take on the landlord's risk then that is a raw deal and no one should sign.

Alternatively, if every place needs a personal guarantee then there should be plenty of spas that are looking to get out of their lease/rent payments and you pickup the entire place for cheap and be able to talk to the landlord for more favorable terms.

Location is less important now than it was before, or atleast through well placed google/facebook/etc... ads and reviews you can make up for a location that has less foot traffic. The location can not be in some run down place though at jane and finch though.

The art of business is not to take deals regular joes would take and to do business where a regular joe would think it is unwise to. When everyone is yelling risk you have to see opportunity and ways to greatly reduce risk. When everyone sees opportunity, you have to be able to see the great risks involved.
Last edited by toalan on Dec 29th, 2016 12:01 pm, edited 1 time in total.
I workout to get big so I can pickup bricks and ****.
Penalty Box
Dec 27, 2013
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toalan wrote: Do you have your own business?

The product last that I designed and released for sale, probably my 12th product, was a total failure. I thought it would be a winner, but I was wrong. I can walk away from the product and lose maybe 10k because I implemented alot of risk mitigation, if I did not then the loss would be closer to 25k-50k. Now I have to think about how to salvage that product to get back most of that 10k, I have no idea how I will do it, but I will think of something.

My 9th product which I released, that is my money maker. I had no idea it would turn out to be such a good seller when I designed it. It was not a winner when it started out, I just put it on my website with no promotion or advertisement and it started to build sales over time.

Business is like fighting, you can have theories about it, but unless you fight you have no idea what works and what your real tolerance for risk and suffering is. The OPs 12k, will certainly buy him some good lessons, cheaper and more impactful than spending that 12k on business courses. If he succeeds then good for him, if he fails then he needs decide if wants to give it another try. If he does try again in the future, the chance of success becomes higher, and each subsequent attempt the chance of success gets higher.
I love when champs come on here, and compare apples to oranges and try to be smug about it.

Your first piece of advice, was for him to chose the "cheaper location". You clearly have no clue what you're talking about by making that statement, nor did you even read the original post to give such silly advice. A SPA is not an online web store. A spa, specially in Toronto has certain criteria to meet to be successful.

You compare your product launch on a website, to launching a SPA, and like to conveniently leave out all the important details... e.g THEY AREN'T the same thing and are worlds apart. The only similarities between the two is that you have to work hard in both situations. No one is denying working hard and "fighting".

Then you go on to state that $12,000 is a good loss to hit. Aagain, this shows me you have no clue of the cost of anything, comparing it to your online store and your online product launch lol to launching a full features SPA that competes with the likes of Hamman Spa and other trendy spas in Toronto?

I don't know how you can't understand or see the differences between the two, but treat them one and the same.
Penalty Box
Dec 27, 2013
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vinaymal wrote: That was me. I'm living here in the GTA and like you have many commercial leases under my belt. I have NEVER, not once, signed a lease with a personal guarantee. As in everything in life terms are always negotiable. I don't know why on RFD of all places, where YMMV is a common term, when we get into the small business section people seem to forget that and think that just because they couldn't get something done and negotiated it's not common / possible ?
I doubt it. You lost all your cred when you said that Toalan's advice was th ebest advice on this thread.. that he should sacrifice his $12,000 to learn how to launch a business.... Meanwhile $12,000 won't even buy him tile.... you guys seem to be missing he point.. he's not opening a computer store, or a car shop to sell parts. A spa requires a certain atmosphere and trend to be successful. So if you think $12,000 is enough money to do that, you're living under a rock.

the next part that made you seem even more ridiculous was the no personal guarantee. You have "multiple commercial leases" under your belt with no personal guarantees??? LOL ok, yeah maybe in the middle of nowhere sure, not in Toronto.
Penalty Box
Dec 27, 2013
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toalan wrote: I have no idea about the personal guarantee. The economy is not booming, so it is odd to me that personal guarantees are the standard and non negotiable. If the landlord requires a personal guarantee then go find a place that does not need that. The personal guarantee is non-sensical to me. The landlord is in the business of being a landlord, the OP wants to rent/lease space from the landlord to start his business. The landlord must be giving you a fantastic rent/lease rate to warrant the total risk transfer from the landlord to the tenant. If the rent/lease rate is high and you have to take on the landlord's risk then that is a raw deal and no one should sign.

Alternatively, if every place needs a personal guarantee then there should be plenty of spas that are looking to get out of their lease/rent payments and you pickup the entire place for cheap and be able to talk to the landlord for more favorable terms.

Location is less important now than it was before, or atleast through well placed google/facebook/etc... ads and reviews you can make up for a location that has less foot traffic. The location can not be in some run down place though at jane and finch though.

The art of business is not to take deals regular joes would take and to do business where a regular joe would think it is unwise to. When everyone is yelling risk you have to see opportunity and ways to greatly reduce risk. When everyone sees opportunity, you have to be able to see the great risks involved.
This guy has got to be joking. Really, location is less important today?? If anything, location is MORE important today, as people move away from car ownership, into down town high rises, proximity to TTC is KEY, proximity to population is KEY. I can't believe a business savvy individual is saying this......

You've been plugged into the internet to long friend and don't see what's going on in the real world. The guy wants to open a SPA. It's a service related industry, not a SKU related industry. the OP needs to sell location, appeal, cleanliness, trendiness, and good all around enviorment to make people feel welcome. Location is 100% crucial, and so is spending money to make the place fit the bill. I would NOT GO TO A SPA that wasn't pristine condition, with nice tile, and relatively close to me. I live in Toronto, the last thing I would ever do is go to a SPA in Etobicoke, when Hamman Spa is right down town. BUt IF OPS spa was on College and Bathurst, and had a similar appeal as Hamman Spa, I would maybe chose that.
Deal Fanatic
Nov 17, 2004
7311 posts
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daivey wrote: I love when champs come on here, and compare apples to oranges and try to be smug about it.

Your first piece of advice, was for him to chose the "cheaper location". You clearly have no clue what you're talking about by making that statement, nor did you even read the original post to give such silly advice. A SPA is not an online web store. A spa, specially in Toronto has certain criteria to meet to be successful.

You compare your product launch on a website, to launching a SPA, and like to conveniently leave out all the important details... e.g THEY AREN'T the same thing and are worlds apart. The only similarities between the two is that you have to work hard in both situations. No one is denying working hard and "fighting".

Then you go on to state that $12,000 is a good loss to hit. Aagain, this shows me you have no clue of the cost of anything, comparing it to your online store and your online product launch lol to launching a full features SPA that competes with the likes of Hamman Spa and other trendy spas in Toronto?

I don't know how you can't understand or see the differences between the two, but treat them one and the same.
I have no experience with spas, neither do you. What I am saying is that in any business situation, if you have a clear mind then you can mitigate most of the risk. The OPs first shot he will fail probably, I said it in my post, but so long as the failure is limited and he can walk away then he is ok. Never risk so much that failure stops you from taking the next opportunity that pops up, because that is when you screwed up and risked too much.

Lose 12k, gain some thicker skin, gain insight, gain knowledge. Next time, it might be 50k, that 50k will do the work of 100k if he learned anything from his first venture. There might be a third time, another 50k, this time his 50k will do the work of 250k.

They say competition is 90% mental 10% physical. Bussiness is roughly the same, the mental aspect of it is more important than the cash you have on hand. I do not give a crap about his spa, I care about him forging his mind, forging his attitude, and I also do not want him to make an unrecoverable financial loss at the same time.

If he or his wife really has that drive to run their own business, they are fighting against the clock, after the clock runs out your ability to take risk is gone, that clock runs out when the first kid is born. I am assuming the OP has no kids yet, because anyone with kids to support can not risk their life savings no matter how little it is unless the opportunity is so obvious that only a fool would not do it, and a spa is not an opportunity of that caliber.
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Mar 23, 2008
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toalan wrote: I have no experience with spas, neither do you. What I am saying is that in any business situation, if you have a clear mind then you can mitigate most of the risk. The OPs first shot he will fail probably, I said it in my post, but so long as the failure is limited and he can walk away then he is ok. Never risk so much that failure stops you from taking the next opportunity that pops up, because that is when you screwed up and risked too much.

Lose 12k, gain some thicker skin, gain insight, gain knowledge. Next time, it might be 50k, that 50k will do the work of 100k if he learned anything from his first venture. There might be a third time, another 50k, this time his 50k will do the work of 250k.

They say competition is 90% mental 10% physical. Bussiness is roughly the same, the mental aspect of it is more important than the cash you have on hand. I do not give a crap about his spa, I care about him forging his mind, forging his attitude, and I also do not want him to make an unrecoverable financial loss at the same time.

If he or his wife really has that drive to run their own business, they are fighting against the clock, after the clock runs out your ability to take risk is gone, that clock runs out when the first kid is born. I am assuming the OP has no kids yet, because anyone with kids to support can not risk their life savings no matter how little it is unless the opportunity is so obvious that only a fool would not do it, and a spa is not an opportunity of that caliber.
You're assuming that a) they will learn from their mistakes, and b) they can limit the bleeding without driving themselves into bankruptcy. Given the level of detail of the "business plan" and the "amateur" thinking of the wife in particular, I would question the first assumption. The fact that he was able to nip things in the bud shows that the second one might not have been an issue. In any case, it sounds like the issue is resolved for now.

C
Penalty Box
Dec 27, 2013
8003 posts
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toalan wrote: I have no experience with spas, neither do you. What I am saying is that in any business situation, if you have a clear mind then you can mitigate most of the risk. The OPs first shot he will fail probably, I said it in my post, but so long as the failure is limited and he can walk away then he is ok. Never risk so much that failure stops you from taking the next opportunity that pops up, because that is when you screwed up and risked too much.

Lose 12k, gain some thicker skin, gain insight, gain knowledge. Next time, it might be 50k, that 50k will do the work of 100k if he learned anything from his first venture. There might be a third time, another 50k, this time his 50k will do the work of 250k.

They say competition is 90% mental 10% physical. Bussiness is roughly the same, the mental aspect of it is more important than the cash you have on hand. I do not give a crap about his spa, I care about him forging his mind, forging his attitude, and I also do not want him to make an unrecoverable financial loss at the same time.

If he or his wife really has that drive to run their own business, they are fighting against the clock, after the clock runs out your ability to take risk is gone, that clock runs out when the first kid is born. I am assuming the OP has no kids yet, because anyone with kids to support can not risk their life savings no matter how little it is unless the opportunity is so obvious that only a fool would not do it, and a spa is not an opportunity of that caliber.
The OP doesn't need to lose $12,000 to get thicker skin (and he will lose way more than that, so the fact that you think that's all he will lose shows us you're not in tune with what's going on here.).

The OP needs to come up with a WAY better plan of attack - which by the reading of his thread has nothing in place yet.
Deal Fanatic
Nov 17, 2004
7311 posts
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Toronto
daivey wrote: This guy has got to be joking. Really, location is less important today?? If anything, location is MORE important today, as people move away from car ownership, into down town high rises, proximity to TTC is KEY, proximity to population is KEY. I can't believe a business savvy individual is saying this......

You've been plugged into the internet to long friend and don't see what's going on in the real world. The guy wants to open a SPA. It's a service related industry, not a SKU related industry. the OP needs to sell location, appeal, cleanliness, trendiness, and good all around enviorment to make people feel welcome. Location is 100% crucial, and so is spending money to make the place fit the bill. I would NOT GO TO A SPA that wasn't pristine condition, with nice tile, and relatively close to me. I live in Toronto, the last thing I would ever do is go to a SPA in Etobicoke, when Hamman Spa is right down town. BUt IF OPS spa was on College and Bathurst, and had a similar appeal as Hamman Spa, I would maybe chose that.
Location matters based on transit time. Do not open any spa that relies on the DVP to get there. I would look for a place off high 400, probably near finch (I have been looking for industrial space in that area), from downtown you can get to 400 quickly and once on the 400 it is in my opinion that it one of the least congested highways.

Walk ins are a pipe dream, you can not get a location with good walk in customers without taking on too much financial risk.

Most spas/massage places do most of their business by appointments. Car ownership has never decreased, it has always increased over time. If some people only have the TTC to get around, quite frankly they are probably no the target demographic that would splurge on a spas with any regularity. There is also uber to get around.

All you see is negativity, I see opportunity, I see a chance to practice the craft of taking risk but not being taken out by risk.
I workout to get big so I can pickup bricks and ****.
Member
Dec 7, 2005
263 posts
54 upvotes
Pickering
daivey wrote: I doubt it. You lost all your cred when you said that Toalan's advice was th ebest advice on this thread.. that he should sacrifice his $12,000 to learn how to launch a business.... Meanwhile $12,000 won't even buy him tile.... you guys seem to be missing he point.. he's not opening a computer store, or a car shop to sell parts. A spa requires a certain atmosphere and trend to be successful. So if you think $12,000 is enough money to do that, you're living under a rock.

the next part that made you seem even more ridiculous was the no personal guarantee. You have "multiple commercial leases" under your belt with no personal guarantees??? LOL ok, yeah maybe in the middle of nowhere sure, not in Toronto.
1) I wasn't coming on here to get "cred" from you, I posted when I saw something I agreed with.
2) I agreed with toalan and still do. He or she seems to have a lot of common sense.
3) All of the commercial leases I have done have been in Burlington, which GTA but not Toronto proper, so I guess you are right that they are "not Toronto".
4) However I own and have written (I am the landlord) a commercial lease on Victoria St in downtown Toronto, so I know how people negotiate from both sides. I also have worked with CBRE when we were looking for a space for one of our companies (again in Burlington) and if I was going to put something in our offer to lease that would have embarrassed them as it was against industry norms, they would have told me. We are not a large enough client to throw our weight around with the reputation of CBRE. Take that for whatever its worth in comparison to your experience in this area.
5) None of the locations that the OP has specified are actually considered downtown Toronto (Core) The rates he has specified along with the size of a typical spa indicate to me the type of building he is going in. Typically in Commercial real estate if the building is brand new they have less flexibility with T's and C's and rates as the lendor has projections they require the landlord to hit, with older units this is not the case. EVERYTHING is negotiable if you are willing to ask.
6) Etobicoke, in particular by the airport has been hit very hard with vacancy rates and landlords are willing to do some crazy things with Net rents just to get tenants in the door. He will have a lot of negotiation leverage there.
7) Many years ago my family started not a spa but an electrolysis clinic in much the same way the OP is asking. We had two location options and little money, we chose the one with less fixed costs and pushed hard to reinvest everything we made till it could afford the higher rents, so I do have a bit of experience not only in commercial real estate, but in this kind of business. Word of mouth is where most of your clientele comes from initially.
8) I didn't say sacrifice his $12K. I just think that controlling fixed costs initially is the best way to build a business.
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Nov 17, 2004
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vinaymal wrote:
6) Etobicoke, in particular by the airport has been hit very hard with vacancy rates and landlords are willing to do some crazy things with Net rents just to get tenants in the door. He will have a lot of negotiation leverage there.
7) Many years ago my family started not a spa but an electrolysis clinic in much the same way the OP is asking. We had two location options and little money, we chose the one with less fixed costs and pushed hard to reinvest everything we made till it could afford the higher rents, so I do have a bit of experience not only in commercial real estate, but in this kind of business. Word of mouth is where most of your clientele comes from initially.
6) You are right, near the airport is probably the perfect place. The highways are already there for people to get to the airport quickly, so they can get to a spa near the airport just as quickly. I have seen alot of desolation in that area without it qualifying for being run down. Rent around dufferin and finch looks to be about the same as near the airport but would take longer to drive to for most people coming from down town. I was looking for cheap industrial space to expand my business, dufferin and finch and the airport was usually the lowest priced. Landsdown and bloor is also pretty cheap considering it has TTC access and is close to the downtown core, but it would be hard to find a place around there that is not next to a money mart or a weed shop
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Penalty Box
Dec 27, 2013
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Location doesn't matter...
Location does matter based on transit time....

Interesting..
Isn't that the same thing as saying "location matters"? I mean why else would location matter? Isn't TRANSIT time the most important point when talking about location? Like the only factor pretty much?

I don't see negativity. I see someone about to blow their brains out, and hoping to influence them not to. If you call that opportunity, then yea, I agree the morgue will profit and so will the funeral home.

As for personal guarantees. clearly if you're renting out to a large corporation you won't be asking for personal guarantees, but to someone just starting out, you will be.
Deal Fanatic
Nov 17, 2004
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location as you define it as having to be downtown in some affulent looking place is out of reach for the OP. Within reach are locations that have little walk in potential but is atleast easy to get to by car.

Bussiness operates by any means necessary. If the spa is not your dream spa, then you have to price yourself accordingly, and work twice as hard.

If the OP can find a reasonable place which does not demand a personal guarantee, he should do it. Get a taste of business, if it fails and he does not like having his own business then just close the place down and take a limited loss. Odds are that it will fail, but not fail anywhere near the level of his worst nightmare.

Back when I was 19, I managed to rent a retail space in toronto, month to month, no personal guarantee. Did it over the summer holidays, closed it in Oct-Nov when mid terms came up. It was a failure, but I got what I needed out of it; a tolerance for risk and I had enough money left over to pay for the school year.

Bussiness changes people, much like war does. It polarizes you when you get a taste of it, either you love it or you hate it. You will not know unless you do it.
I workout to get big so I can pickup bricks and ****.
Deal Fanatic
Nov 17, 2004
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One example I want to bring up is Nintendo. This company has been around for like a hundred years, so they have not always been making mario and pokemon. At one point they were making sex toys, then transitioned to making gambling machines, then transitioned to making consoles.

The common thread between sex toys, gambling machines, and consoles, is business sense, attitude, risk tolerance, risk mitigation, etc...

If the OP finds success the odds are that it will not be with spas, but a spa is as good of a place to start as any.

It is a hard road, but it is not blowing your brains out. I honestly believe that there are people out there that are so skilled and experienced at business that they can make any business work out regardless of capital and economic conditions. For even a chance to achieve what these people achieve, you have go through failures, just not so big of a failure that you are ruined for life.
I workout to get big so I can pickup bricks and ****.
Sr. Member
Apr 2, 2009
851 posts
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toalan wrote: I honestly believe that there are people out there that are so skilled and experienced at business that they can make any business work out regardless of capital and economic conditions.
I can't read anymore of this. Your hearts in the right place but your experience is this area is non existent based on your posts.

-Location matters just as much now as it did 30 years ago
-Comparing your internet website where you sold a product or two to a retail storefront is not even remotely the same as someone else pointed out. The difference in costs, both startup and ongoing are absolutely night and day.
-OP will not be able to limit his losses to just 12k
-I don't use spas but my wife does and I've been in more than 1 picking up or dropping off my wife. Unless it was an existing spa, the renovations needed to give an image of luxury/relaxation to attract and keep clients will cost far more than 7k before he opens the doors, even if he does it on the cheap

This isn't field of dreams where "if you build it they will come!"
Deal Fanatic
Nov 17, 2004
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I have had a brick and mortar business before, from that business I realized that I need retail margins of 30% to even have a shot at turning a profit. Now when I design and sell product wholesale, I always budget 30%+ for dealers to make profit. My first business was a failure, I learned what I could from it, and I moved on.

Go around and you will see spas everywhere, not talking about the happy ending places. Those low end spas are there, they are cheap, some of them have been around for a long time. Half of those places do not even have a RMT. I have no idea what the economics are, but the OP can just spend a few hours to park outside, and see # number of customers, do the math and get a feeling as to how much money one of those places make.

I am not asking the OP to do something I would not do, I have said over and over he will probably fail. If he can limit his loses, then roll the dice and do it. If he can not limit his loses then do not do it. I am sure he can find a place to rent which does not demand a personal guarantee.

The OP has a big advantage to most other spas, at the start his labor costs will be 0 since his wife can massage and run the spa. It is a very potent advantage.
I workout to get big so I can pickup bricks and ****.
Deal Fanatic
Nov 17, 2004
7311 posts
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Maybe I am on a different page than the rest of you in terms of what I expect using nothing but 12k.

I do not know what the delineation is between spa and massage parlor is, but my expectations are that it will be more akin to a massage parlor than spa. Furniture would be mid range ikea stuff. The decor only has to be nice enough to tell potential customers that this place is not the type of place that gives happy endings. Location would be pretty much any plaza that does not have a happy ending massage parlor on it.

Are you guys thinking the same type of spa I am thinking?
I workout to get big so I can pickup bricks and ****.
Penalty Box
Dec 27, 2013
8003 posts
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toalan wrote: Maybe I am on a different page than the rest of you in terms of what I expect using nothing but 12k.

I do not know what the delineation is between spa and massage parlor is, but my expectations are that it will be more akin to a massage parlor than spa. Furniture would be mid range ikea stuff. The decor only has to be nice enough to tell potential customers that this place is not the type of place that gives happy endings. Location would be pretty much any plaza that does not have a happy ending massage parlor on it.

Are you guys thinking the same type of spa I am thinking?
even with LOW END ikea stuff, good luck furnishing with $12,000.
Penalty Box
Dec 27, 2013
8003 posts
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Toronto
colossk wrote: I can't read anymore of this. Your hearts in the right place but your experience is this area is non existent based on your posts.

-Location matters just as much now as it did 30 years ago
-Comparing your internet website where you sold a product or two to a retail storefront is not even remotely the same as someone else pointed out. The difference in costs, both startup and ongoing are absolutely night and day.
-OP will not be able to limit his losses to just 12k
-I don't use spas but my wife does and I've been in more than 1 picking up or dropping off my wife. Unless it was an existing spa, the renovations needed to give an image of luxury/relaxation to attract and keep clients will cost far more than 7k before he opens the doors, even if he does it on the cheap

This isn't field of dreams where "if you build it they will come!"
I feel the same way. his hear is in the right place, I get what he's trying to say... but he's completely lost with this stuff... I'm not genius with this, I've never run my own business, but I deal with enough of them to understand how things work, how some basic principles of life work.
Deal Fanatic
Nov 17, 2004
7311 posts
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Toronto
You do not understand, business is by any means necessary. If you have the drive you can stretch your dollar to almost no end, it all depends on how down to earth you are. If the OP is not above buying used massage tables and furniture, then get used stuff in good condition. If the OP is not above doing the renovations himself then do it yourself. If nothing is beneath you aside from legal and morally objectable acts, then 12k is too much, he can get the thing done with 5k and use the 7k to stay afloat.

What he needs is about 3k a month to pay rent and utilities. That is $100 a day, probably 2 customers a day to stay afloat.
I workout to get big so I can pickup bricks and ****.

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