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Employee - depends on the type of business and how much control you want. If you want total control over what happens in your spa - hire directly. If you simply want to provide space for others to offer spa type services then think about contractor or independant business owners who lease space from you. Trying to hire contract employees in your own spa may be a little difficult given the IRS rules on what constitutes an independant contractor and an employee - more information here - http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
If you get this wrong you can face huge fines and other liabilities.
To keep employees loyal - really focus on your hiring practices only hiring those that share your desire for a great business then treat them like you would want to be treated.
For your business - if really comes down to two things: Your marketing - how well you know your customers and getting your message in front of them. Customers make or break your business. Give your target market what they want. Second, is how hard you work and your dedication. Starting any business is not easy. It takes time, hard work and sacrific. If you are willing to do all of that - then you will succeed. Just remember, customers and markets are always changing - thus you must be willing to change with them.
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Incentives does the trick everytime! Make your place fun to work at.
-Surprise your employees and give them one hour off early for working so hard!
-If your location reaches a goal thanks to their hard work have a "Chocolate Bar waiting on them"!
-For every 60 hours they work there name is put in a drawing for concert tickets, drawing twice a year.
-Gather them for a meeting and replace it with a "Thank You" luncheon.
-Place a "Thanks for Caring" sticky note in their paychecks.
Indepen. Contractors (Freelance): Is great for temp work or the moment of work. But for you I would not suggest this. You have limited control of Indep. Contractors.
Hired Employees: Make sure all your paperwork is in order.
For what you do I would highly suggest you have each and every person that works with you to sign a "Confidentally Agreement". This means if they select to work for your competitor or open their own place they can not contact your clients.
You said "new" spa business do you already have one and want to turn your image around?