Five years into owning and operating Mahala’s Day Spa, Hiedi Hayden had already operated in two different spaces, and renovated a third, tripling in size, as the growth of her business pushed expansion after expansion. “In order to continue growing, we needed to look at the business model,” Hayden said. “The original business model was working, but I knew that we needed to change to continue to grow over the next five years.”
Mahala’s Day Spa began as a booth rental establishment, where employees pay a set fee to have access to a dedicated space within the spa. After five years of operating in this manner with continued growth, Hayden knew they needed to reconsider Mahala’s business model. With booth rentals, spa management can’t enforce products or dress code, making it difficult to create a consistent experience for all clients. Establishing an expectation of professionalism and quality of service was key for Hayden, and with the continued growth of the business, she knew she needed to reconsider the way she was managing the spa.
Hayden reached out to the Small Business Development Center in August of 2017 and began working with CEI Master Certified Business Advisor, Brad Swanson. She knew the shift to operating the business as an employee manager required significant changes. Typically, only very large destination spas offer benefits to employees; small, privately owned spas can rarely offer benefits to employees. Hiedi saw this transition as an opportunity and motivating factor in shifting away from the booth rental model.
“Working with my business advisor was instrumental in relieving anxiety and giving me confidence. He listened to my vision and was supportive in finding a way to offer benefits to the hard-working people in the industry who deserve it.” –Hiedi Hayden, owner, Mahala’s Day Spa
With the new business model in place as of early March, Hayden has retained all but one staff members and is now able to offer Mahala’s Day Spa employees retirement contributions, health insurance, paid vacation, paid trainings, and opportunities for continuing education. “One of our massage therapists,” she said, “has really blossomed with the change. She’s more involved, more social, and is helping us define new products.” Since the transition, Hayden has hired three new employees, re-hired a past booth renter who returned because of the shift to employee status, and has seen two employees step up into leadership roles in the business.