How to Start a Spa Business

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The past few years have been rough – stress levels are off the chart. In fact, 2 out of 3 adults admit to feeling way more stressed throughout the pandemic. Because of this, people are finally taking their health seriously – mind and body. This means good news for spa businesses!

Now that things are settling down, folks are flocking to spas for some serious self-care. If you’ve been dreaming of getting into the wellness business, now’s your chance! We’re here to make your spa journey a success.

Whether you want a cozy day spa, a mobile spa to bring relaxation to clients, or even a home-based sanctuary, we’ll teach you how to strategize your way to spa business success. Ready? Let’s get started!

Define your target market 

Determining who your dream spa clients are is about more than just guessing. It’s about strategy! Here’s why it matters:

Massages are a big deal 

In the past year, 70% of women and 60% of men who regularly hit the spa have enjoyed a massage. That’s a huge market! 

Skincare is surging

People are interested in trying all sorts of skin treatments – full-body, facials, and the works. Offering these could seriously boost your bottom line. Keep an eye on those trend reports to see what’s hot in your area!

The guys are getting in on it 

The spa world has traditionally been all about the ladies. 

But guess what? Times have changed. 

Did you know that nearly half (47%) of spa-goers are men, and that number is only growing? So, don’t forget about them when crafting your marketing!

Tip: Start with a focused customer group and go from there. It’s better to be the best at something specific than mediocre at everything.

Market research and competitor analysis

Before you start buying those fluffy robes and fancy aromatherapy candles, research the market.

First things first, figure out what kind of spa experience folks in your area are craving. Are massages the main thing, or are facials super popular? A quick scroll through Facebook and Instagram will give you a good idea of what’s trending. This will help you build a menu that gets people buzzing.

After this, research what kind of spa you want to open.

Do you want a quick in-and-out setup that is perfect for busy folks needing a break? 

Or maybe a luxurious all-day affair with pampering packages and maybe a light lunch? 

Knowing your ideal client will help you map out the perfect vibe.

Tip: Want a little insider info? Check out the competition! Visit those other local spas, try their treatments, and see how they do things. You’ll learn loads about what works and what you can improve on.

Create a comprehensive business plan

Think of your spa business plan as the blueprint for creating your relaxation oasis. It’s where you’ll map out your winning treatments, build a loyal client base, and design a smooth path to spa business success.

A rock-solid business plan isn’t just about filling out forms. It’s your secret weapon for:

• Finding your dream clients
• Pricing for profit
• Investing wisely
• Avoiding spa-day disasters
• Wowing potential investors

If you want a little extra help along the way, there are many business planning software tools that can guide you in this process.

Choose the right business structure

Choosing a business structure is not as glamorous as picking out massage oils or designing treatment rooms, but trust me, it’s essential.

You’ve got options like: 

• Sole proprietorship 
• Partnerships 
• LLCs and more 

It can feel a bit overwhelming, right? Here’s the thing: many spas go with the LLC route. 

There are a few reasons for this:

• It protects your personal assets
• Taxes can be a little less complicated
• The paperwork isn’t too intense

Of course, every spa is different. It’s always intelligent to chat with a lawyer or accountant to figure out the absolute best fit for your specific situation. But knowing that LLCs are a popular pick is a helpful starting point!

Another aspect to consider in this context is how LLC formation rules and requirements vary depending on where your spa is based. So the basic steps to start an LLC in Virginia will diverge from those that apply in Delaware, for example. This makes seeking expert advice even wiser since there are a lot of boxes to tick regardless of your location.

Obtain necessary licenses and permits

Unfortunately, you can’t open a spa without dealing with a few licenses and permits. Here’s the rundown:

• The must-haves: You’ll need a general business license, a retail seller permit (most likely), and a license specifically for operating a spa.
• Laying it all out: You’ll need to fill out an official document detailing whether you’re a day spa or a medical spa, as well as all that LLC info.
• Location matters: Depending on your location, you might need a Certificate of Occupancy to show your space meets all the necessary requirements.
• Taxes, as always: Get a Federal Income Tax ID; you’ll need it to pay taxes.
• Protecting your staff: Most states require anyone providing spa services, like massage therapists or estheticians, to have specific licenses. Plus, having liability insurance for them is a smart move.

Find the perfect location

So, you’ve got this unique vision for your spa, right? But turning that vision into reality starts with finding the perfect location. Think of it as the foundation of your whole client experience.

So, where do you even begin? 

First things first, think about the kind of vibe you’re going for. Want outdoor treatments? Then a busy city center might not be ideal. You’ll need space and maybe a bit of quiet.

Now, let’s get practical. When scouting locations, keep these must-haves on your checklist:

• Can people park? No one wants to circle the block endlessly before their massage.
• Who are your neighbors? Complementary businesses (think yoga studios or healthy cafes) can be major draws.
• Is there competition nearby? Sometimes, it’s wise to cluster; other times, you want to be the only game in town.
• Will people see you? Easy visibility is essential, especially when you’re starting.
• What kind of area are we talking about? Upscale? Trendy? This needs to match your target clientele.
• Oh, and don’t forget the legal side – zoning! Some areas are strictly residential, others are all about business. Make sure your dream spa fits the local rules before you fall in love with a space.

Now, let’s talk about size. Ask yourself:

• How busy will it get? How many clients and staff do you need to accommodate?
• How many treatment rooms? And will they all be the same, or do you need specialized ones?
• Where will people chill? Don’t skimp on the waiting area!
• What about the behind-the-scenes stuff? Offices, storage, staff break areas… They all need a place.
• Fancy extras? Locker rooms, saunas, etc., take up serious space.

Lastly, your location and decor need to be clicked with your ideal clients. A fun, vibrant atmosphere will attract a different crowd than a zen-like minimalist space. Picture your dream customer – what surroundings would make them feel pampered?

Equipment and supplies

Choosing the right equipment for your spa is all about understanding what you’ll offer and how big your space is. After all, you don’t want to be tripping over massage tables because you underestimated your space needs.

For starters, think about the kind of day spa experience you want to offer. Will there be showers and lockers for guests? Soundproof massage rooms for ultimate relaxation? Those features will influence what you buy.

Now, let’s get into the essentials:

• Massage must-haves: Tables or chairs, comfy linens, and a washer/dryer setup to keep everything fresh.
• Creating the mood: Think warm towels, soothing masks, and shower essentials.
• The pampering extras: Massage oils, candles, aromatherapy… all about setting the right ambiance.
• Behind the scenes: Remember a front desk, chairs, and all the tech needed to process payments.
• Reception space: Make it inviting with comfy furniture where clients can chill out.
• Esthetician essentials: Pedicure stations, stools, wax warmers, and maybe even fancy lasers for hair removal.
• Those little touches: Exfoliating tools, hydrotherapy tubs… details that elevate the experience.

And this is just the starting point! The more specialized your spa gets, the longer your equipment list will be. For example, extra-fancy services, like hydrotherapy, can be amazing but also a significant upfront investment.  

Sometimes, you might need serious upgrades – like new plumbing and electrical work – on top of the equipment itself.

Because of that, some spa owners start with a smaller menu of services. It gives them time to build a loyal customer base and save up a bit before adding those high-end options. It’s a smart way to offer great experiences while keeping the budget in check.

Building your spa team

You know that feeling when a client leaves your spa glowing with relaxation? That’s what makes it all worth it! But creating that awesome experience takes more than just your own two hands.

At first, you might wear all the hats yourself – receptionist, massage therapist, cleanup crew… you name it! But as things get busier, you’ll want to build your own team of relaxation experts.

The heart of your spa is the people who provide the actual services – massage therapists, estheticians, and anyone specializing in fancy treatments. Finding skilled folks who really care about making clients feel amazing is key.

But don’t forget, a client’s experience starts the moment they walk through the door. A friendly greeting at the desk and someone to show them around… your front-of-house crew is just as important for creating a relaxing atmosphere.

Tracking them might mean getting creative – job ads, asking for recommendations, or even offering internships. And, of course, ensure everyone has the proper licenses for the job.

Once you’ve got some potential hires lined up, interview them. Look for people who are skilled and match the vibe you want for your spa.

Developing your spa menu

So, what kind of treatment do you consider for your spa? There are many options, but here’s the basics: if you want to call your business a spa officially, you’ll need to offer at least two things like massages, facials, or those luxurious body treatments.

But choosing your services is about more than just checking boxes. It’s your chance to make your spa memorable! Maybe you become the go-to place for a few unique treatments or offer something that no one else in town does.

Here’s a quick overview of the types of services you might consider:

• Skincare: Facials, body scrubs with all those fancy ingredients, masks that feel amazing.
• Massage: The classic Swedish massage, plus some specialized styles for different needs.
• Relaxation therapies: Think cellulite-busting treatments, relaxing whirlpool baths… all about combating stress.
• Hair removal: Electrolysis, waxing (all the ouch-inducing options!), getting rid of unwanted fuzz.
• Makeup: Every day looks, special-occasion glam, eyelash extensions – you name it!

And of course, don’t forget that strategically pricing your services is super important. You want clients to feel pampered, but also ensure your spa can thrive!

Marketing your spa business

Okay, you’ve figured out all the nitty-gritty details, from market research to hiring staff. Time for the super-fun part – getting those first clients in the door!

But let’s face it – building a customer base from scratch takes some hustle. Here are a few ideas to get the ball rolling:

• Your existing network: Got experience in the spa world? Reach out to those old clients! Let them know about your new venture and invite them to come check it out.
• New to the scene? Connect with local businesses. Partner up with hair salons, gyms, etc., and swap some flyers to reach a wider audience.
• Online Is essential: Get listed on Google My Business, Yelp, and other local directories. Make it easy for people to find info about your spa and book appointments.
• Discount power: Everyone loves a good deal! Consider offering introductory discounts or special packages to attract some first-time clients.
• First impressions matter: Make sure those first few clients feel totally spoiled. A fantastic experience will make them come back again and again, plus tell their friends all about your spa!

Essential Resources for Aspiring Spa Owners

Explore these resources to begin your spa journey:

Software Lists

• SimplyBook.me: A modern online booking system for service-based businesses like spas and beauty care salons offering 24/7 client access and smart add-on options.
• Monday sales CRM: Manage your sales pipeline effortlessly. Centralize data, automate tasks, track deals, and streamline post-sale processes.
• Onpay: Stress-free payroll & HR for your spa. Automates tax filings guarantees accuracy, and offers a simple flat-rate pricing structure.

Industry PDFs

1. International Spa Association
2. SpaFinder Magazine
3. American Medspa Association

Conclusion

Starting a beauty salon and spa is an exciting journey. It takes planning, passion, and a good understanding of what your clients want.

We’ve covered the essentials for setting up your business, and remember – each step is vital for creating a thriving spa. From finding funding and the perfect location to hiring skilled staff and getting the word out, every decision matters. 

And hey, if you’re looking for an AI business plan generator to make that planning process a breeze, check out Upmetrics – they’ve got great resources to help you map out your path to success.

FAQs

How Profitable is Owning a Spa?

It depends! Spa profitability is influenced by location, the services you offer, and how efficiently you run things. On average, day spas aim for profit margins around 10-15%, while massage-focused spas can see margins closer to 30%!

Is the spa industry growing?

Absolutely! In 2023, the US spa industry hit a revenue of $21.3 billion (that’s up 5.7% from 2022!), and clients are spending more with each visit. 

Is owning a Medspa profitable?

They can be! The average Medspa owner earns around $300,000–$375,000 annually after expenses, with profit margins in the 20–25% range. That’s well above the average for medical clinics overall.

How much does it cost to start a spa business?

This varies a LOT. Depending on the size of your spa, your location, and the types of services you offer, start-up costs could range from $187,000 to upwards of $695,000.

Author Bio

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software.

His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans.

He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts.

Vinay Kevadiya’s LinkedIn profile