Question about the income of spas...

[Mighty Saints!!]

Alright I'm just curious to see something....
Let's say we have a spa such as Blue Lagoon, SRM, Alpha Care, ones which are opened really late. From say 10:00am until 4:00am on a weekly basis...

Also, let's say they charge a door fee of $50.00 a customer, which goes right to the owners of the spa, and the girls keep the rest of whatever they get in the room (extra price for NR, BS, etc.)

Say these spas get 1 customer an hour, and they are opened from 10:00am to 4:00am everyday of the week...this would be $50.00 X 18 a day which equals....$900.00 a day...
let's times this by 7 days a week...this equals $6300 a week, so now lets times this by 4 weeks....this equals $25,200 a month...now lets times this by 12 months in a year....$302,400 a year....WOW....

If this is the case, I really want to open one of these...of course minus bills (hydro, heating, etc) and rent....I'm guessing maybe $2500 grand a month lets say for rent, and I'm not sure about hydro, etc.).....This business is mad loot, especially since it's all cash and most of the owners of a spa own more than one.

So maybe my math is completely wrong or i'm just a bit delusional, but someone confirm me on this, because if this is the case, whoever owns one of these things has the best job in the world, working with beautiful women on a regular basis and making great coin in a some what relaxed environment, what more can a guy ask for?

 

[Andie]

costs a lot of money to run one... you're also forgetting insurance, water, cleaning bills, salaries phones, advertising....

none of this is cheap. 300,000 a year in sales is nothing when your expenses eat up more than 2/3 of your revenue

 

[caseyyyy :D]

2500 a month for rent is very low. What about the cost of building the facilities plus common fee that go with any unit in a plaza. I know what your saying but when you get right down to the nuts and bolts not as much profit as you think.

 

[Coach E!]

Still though, yeah I'm sure the water bill can be quite costly, but if the place is in a small unit, like HFH....they are still making heavy profit, plus I know at some spas the girls at the end of the shift have to give the owner a "pimp" fee of like $20.00 or something like that, so that's a little extra money. But I know Alpha Care and Blue Lagoon advertise heavily as they have advertisments on public benches and billboards around the GTA as well as various flyers at strip clubs as well...
So yeah give or take a few thousand, they still are making a lot, I just based this on if they had one customer an hour, most middle-class spas get at least 2-3 customers an hour.

 

[Exemplify]

There's must be some money in them or there wouldn't be so many.

 

[HeyitsDani]

There is plenty of money in them if you run it correctly. It is the same as an escort service you can make good money if you do it correctly. However you have to ask yourself is this really the line of work you want to get in to. Drug's, Biker's...Pimps....?????????

 

[Panda Bear!]

Rico,

Your revenue estimate of $300K might be a bit conservative considering most spas have an average of 4 rooms. At least, the ones I've been to do. What you're saying is that one room will be booked from opening to close. That would be fair for year 1 when you're just trying to get established and are making a name for yourself. But I would say that in year 2, it would be closer to 2 rooms booked per hour. Which would make it $1,800 per day and $650K per year ($1,800*365). This is gross revenue only, of course. Once you've accounted for your expenses, assuming we use sheik's estimate of 2/3, you're still left with $217K ($650K*1/3) in before tax profits.

Other expenses required would be furnishings and furniture to give the place a spa friendly atmosphere, a decent security system, a manager's salary (unless you plan to be there yourself for 18 hours) and lots of towels. Further, your utilities will be much higher than normal, since you'll be running that washer/dryer all day.

Also, as DMK mentioned, you will be dealing with some shady characters. I'm not referring to massageplanet.netites, of course. Another question will be, is your family going to be supportive and understanding in this business venture of yours? If they're cool with it or you don't give a damn, then why not?

 

[kellywebb]

The other big problem I would be worried about is LE and worried neighbors that you are constantly going to have to be fending off. I thought about opening one years ago but the thought of authorities getting involved with me on a personal level made me re-think it and jump into something else.

 

[Em :)]

guys... i looked into this really rather intently for about 6 months. you're all right on the numbers; that is, you can make a lot if you run it well. but getting a legit license is another thing. i spoke to every city in the GTA and most of them had run out of licences. the places that did have a couple left (like mississauga, brampton and pickering) zoned the areas in such a way as to preclude you from even finding a place (e.g. there were only really big industrial units that would kill your overhead). even if you do find a place, have fun getting a landlord who's willing to have you in one of their units. i couldn't get anyone in pickering to even speak to me. further, some cities even require you to do a 6 month to a year sensitivity training before they even consider giving you a permit.... all in, if you can get a permit, you're golden, but that's nearly impossible to get.

 

[Connie]

HFH isn't necessarily a small unit... it is 1700 square feet in the heart of Woodbridge. Some of the detatched homes that look like boxes, I believe that are about 2200 square feet they wanted $340,000.00! That was a year before the houses were built. Woodbridge is expensive .. more so than Mississauga and Brampton. There are many expenses to consider besides water and it's not as cheap as you may think.

Never heard of a 'pimp' fee before, but I can advise you to check into more facts before you jump the gun on calling it a 'pimp fee' as some owners may take offence to that. Someone else had mentioned such a thing before so I will take this opportunity to give a general explaination here now.

For HFH, when a client visits us and chooses to pay by interact, say for example he pays $100.00 on Visa, there is no extra charge put on to the client for using his Visa or bank card here at HFH. Some places elect to charge a fee. When you have a spa and you pay your taxes, it is your bank statements that go to Revenue Canada. On the bank statement, it shows you getting $100.00 via Visa. Now, out of that $100.00 say that $40.00 is for the door and the $60.00 goes to the girl. At the end of the shift, the girl gets paid her $60.00 cash. Some places ask the girl's to wait for their money, some may not, I give the girl's their money at the end of their shift.

So.. when I pay my taxes... do I pay corporate tax on the whole $100.00 even though I only received $40.00 of it? Unless I am willing to provide Revenue Canada with the attendants name, SIN, etc that I gave the money to.. I have to claim that I made that whole $100.00.

Depending upon the shift, some girl's might put through 3 interacts and the next shift she may not have any. Because the girl's elect to pay their taxes seperately from the spa, I foot the bill for the taxes owed at the end of the year. To even out the costs of paying taxes on money that I give to the girl's, at HFH, the girl's pay a 'shift fee' for that reason. It is $10.00 a shift. I began doing the shift fee thing about 3 years ago when I realized how much money I am paying out on tax for money I didn't even receive. Now, the girl of course does have the choice of paying her taxes and claiming the money she makes and of course in this case, she wouldn't pay the shift fee of $10.00. If the girl covers a shift for us, if we are short a girl on shift, that girl does not have to pay the shift fee.

Most things in life is like a glass house - you don't know what happens until you stand on the outside and look in the windows

 

[Eric Madison]

BECAUSE they CAN. Keep that in mind. Depending upon the district, it is different rules and regulations for each place. I can't even put advertisement on my own windows let alone a sandwich sign or billboard. I'm not even allowed to hand out flyers, have a trailer parked with ads on it, shit.. I had to call for permission to advertise in the yellow pages. HFH business rests solely on word of mouth and unless you have a repuation yourself or you have a lot of friends or an existing spa and you are moving locations.. don't open in Woodbridge.. you will go broke.

 

[marshell]

Hi Kayla

I'm an accountant...we better talk on getting you taxes back.

MJ

 

[superstup]

Believe it or not.. I have a really good accountant. There is just more to the story than many believe when you go legit and pay your taxes.