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How to Start a Spa Business

A spa can be known as a business that offers non-invasive beauty services. People usually get spa treatments to enhance their physical appearance, while others seek relaxation and peace. Health centers, hotels, resorts, and cruise ships usually have spa treatment centers so as to enhance the services they offer.

Spas, based on the services they offer, can further be broken down to standard day spas and med spas. Standard day spas offer body treatments and lifestyle services. Medical spas offer traditional spa services as well as services that must be provided by a licensed medical practitioner, such as acupuncture or microdermabrasion.

Some spas also offer water related services such as Scotch hose treatments or underwater massage, but many other spas would rather offer dry services and do without the water. Spas are a currently a billion dollar industry that is reputed to earn profits even in recession, and the industry is presently very ripe with opportunities.

If you want to join the bandwagon of beauticians who mostly specialize in offering spa services, here are processes you have to go to in a bid to set up your spa business.

15 Steps to Starting a Spa Business 

  1. Consider the type of spa service that will suit you best

Considering that there are many types of spas in the industry, so before you can think of starting a spa business in the United States, you must first find out the kind of spa service you will like to offer.  You should equally determine how much space you need for your business. For example, you may want to offer pedicures and manicures, massage services, body wraps, facials, hair styling, spray tanning and a Vichy shower. Note that some services will affect the layout of your plumbing and electrical supply. Also, do some research to find out how much space each room will require.

The services offered at most day spas generally fall into three categories: skin and body care, hair removal, and makeup.

Skin and body care spa services can include:

  • Facials and body exfoliation that may involve the use of salt glows, body polish, enzyme peels, and body masks like mud or paraffin
  • Massages that include various styles of full body massage, facial massage, and hand or foot massages
  • Wraps and packs used to combat cellulite and reduce water retention
  • Hydrotherapy treatments, such as whirlpool baths and hot tub treatments
  • Body tanning which includes self-tanners and tanning beds
  • Hair-removal services can include:
  • Electrolysis
  • Waxing (face, legs, arms, bikini, back, and underarms)
  • Makeup services can include:
  • Cosmetics application
  • Color analysis
  • Eyelash and eyebrow tinting
  • Eyelash extensions
  • Ear piercing

Research the spa market to determine what services are in high demand. Check your competitors as well. There are different types of spas, and each has unique characteristics. Depending on your budget and expertise, you can choose one or more of the following listed business models.

  1. Select Your Business Structure

Next, you will need to take care of your business structure. You should start by visiting a certified public accountant so as to get information about different business structures in the spa business. You are free to choose from structures such as limited liability companies, sole proprietorship, and Subchapter S corporations. You should also visit a commercial insurance agent who is an expert in liability issues.

Then, you need to look into getting a business license to enable you open a day spa from the authority in your city. You should also ask your health department for a pre-opening inspection of your spa. Note that if this is not, you stand the chance of getting into trouble with the law. You will also be informing your state department of your business so they can give you a sales tax license.

  1. Define your Vision

Before you start planning your business, you must have a clear idea of what you need. Think of what is essential for the business, as it would impact your entire business. Is the spa going to be a mix of east and west? Will it be a combination of salon and spa, or do you want to get more creative with your concept.

Once these choices are made, they will assist in determining all of the other selections needed. Your final choice will determine your guests’ experience — the treatments, the things they see and touch, and the details that will evoke emotions. This will create a unique experience, differentiating from your competitors.

4. Determine the services you will offer and the income you need to generate

While there are numerous services you can offer, the International Spa Association considers a business to be a spa as long as it offers at least two of the following services: massage, skin care, or body treatments.

Taking the time to carefully select your service offerings will help you to better differentiate your business from your competitors. For example, you might decide that you only want to specialize in just a few services instead of offering a wide variety of services. Or you might decide that you want to offer services that are not commonly available at other local spas.

5. Make a Business Plan

Running a spa requires more than just being a skilled practitioner. You will also need a solid business plan to help you identify your potential costs and create a roadmap that you can follow. Create a business plan that outlines your potential earnings and expenses, marketing efforts, target audience and other key aspects. Consider the location of your spa and estimate the cost of rent. Search for companies that sell wholesale skincare and beauty products. Get multiple estimates and try to negotiate.

Your business plan should include these things along with your company’s mission and goals. Think of it as a roadmap to success. Cover every aspect of running a spa business, from legal requirements to financing and advertising. Make sure you also research popular spas to see what makes them successful, what services they offer and how they promote themselves.

6. Define Your Brand

Now that you have already evaluated your competitors and their strength and weaknesses, make an effort to put something unique on the plate for your customers as extras always attract them. In a new day spa business, you can offer authentic treatment classes, wellness tips, or it can be as simple as a cup of herbal tea in the hospitality section. These exclusives in your services can bring a considerable change.

Your day spa business will draw the attention of potential customers easily if it has a unique logo. The importance of a business logo is catching the attention of a company and its business. But more than that, the spa logo design becomes the brand identity of a business. So, hire a freelance graphic designer to create your logo that can represent your business values. The logo must be attractive and has a modern design to impress your audience. The logo will appear on all of your marketing materials such as advertisements, website, stationery, etc

7. Choose a viable location

Deciding where you will set up your spa can be one of the most important decisions you will make. If you’re considering an area that you’re not familiar with, think about hiring a real estate broker to help you out. They will have insights into the community as well as emerging trends that you may not be aware of. Search for a strategic location and get it on a lease. Make sure that the building having your spa is easily accessible, and it has a good parking place.

Get approval from the zonal department while you are at it. Then, hire an experienced interior designer because looks are everything. The designer will suggest you right color scheme for your spa to give your customers a pleasant and soothing environment. You can search for interior designers with the help of the American Society of Interior Designers.

Select a place that is easily accessible by car or public transit, a place that offers plenty of parking, and that attracts a ton of foot traffic. The surrounding area should be attractive, well lit, and safe at any time of the day. You’ll want your neighbors to consist of other retail businesses, as opposed to a commercial area like an industrial park, because neighboring retail businesses will attract customers to your business as well. They may also remain open in the evenings and on weekends, whereas office buildings will likely not.

Once you’ve decided on the neighborhood, you’ll also want to be clear about the square footage you’ll need. Remember that you will probably need space for a reception and retail area, salon services (if you’re offering them), treatment rooms, consultation rooms to discuss treatment options and post-treatment care, changing rooms, storage, an employee and client restroom, administrative offices, and an employee break room area.

You might be able to combine some of these functions (such as the restroom also serving as a changing room), but it’s important to be clear about the amount of room you will need to create the atmosphere you want. You might also want to discuss your ideas for a layout with a professional interior designer or architect.

8. Permits

Once you have settled on a name for your business, you will want to establish a limited liability company, or LLC, and register it with your Secretary of State. LLCs have certain tax benefits that you can discuss with a qualified accountant. Other permits you will need for this business include sales tax, a federal tax ID and a Certificate of Occupancy. You’ll also need a liability insurance policy that protects your business against theft, liability, damage and fire, in addition to commercial vehicle insurance and worker’s compensation, unless your staff will be self-insured contractors leasing space in your spa.

9. Define your market

Take a close look around and determine who your potential clients will be. After all, your spa idea or the entire business will revolve around them, so you should endeavor to do a comprehensive study about their tastes, likes, and budget. Make sure that your services target them.

Determine if your day spa will look to attract neighborhood residents, or will it be a destination day spa for the affluent and celebrities in an upmarket. The spa logo design, apart from other things, should be created keeping these aspects in mind. To understand your target clients better, you can also predict the demographics such as socioeconomic groups, sex, age, education, occupation, etc. which comprise a market niche.

10. Source for funds for your spa business

Budget is perhaps the most vital element in startups. Without funds, your business will never see the light of day. So with this in view, estimate the entire costs to be incurred while setting up your day spa. Different types of expenses will be needed to get the business up and smooth running. Everything starting from infrastructural costs to furnishing and fixture, professional graphic designer costs, and pre-opening expenses including marketing, will be needed. Do a rough calculation of all these costs, excluding miscellaneous expenses as it is the first step towards finding the feasibility of your business.

There are various ways that you can get the financing you need to open a day spa. As a new business, you may need to raise the capital from family, friends, and personal loans. Once you’ve established your business, you may then be in the position to tap more traditional resources.

The Small Business Administration can be a great way to access the funding you need. Some lenders have programs that provide loans specifically for salons and spas. You should carry out more research to see if you qualify for these loans.

11. Hire workers and get them trained

The success of your day spa business will largely depend on how much expertise your employees carry and how they deliver their duties. Hire experienced employees who can efficiently carry out services to the satisfaction of your customers. A better way to get trained people working for you is to get recommendations from community college cosmetology instructor.

If you need a licensed massage therapist, get the recommendations from the American Massage Therapy Association. Or, approach the Aesthetics International Association to hire a licensed aesthetician.

No matter how small you start off, a day spa is not a business that can be solely operated by one person. It’s a business that by its very nature involves training and overseeing employees that possess a range of skills, experience, and temperaments. This makes it all the more important to implement ongoing staff training to help ensure a consistent experience for your guests.

A strong training program becomes even more important when you consider that the spa industry is also subject to high turnover.

In addition to the actual technicians and therapists that will provide the hands-on services for your guests, you will also likely need someone to help you with a wide variety of administrative tasks such as:

  • Booking appointments
  • Ordering supplies and talking with salespeople
  • Creating and revising work schedules to accommodate employees’ scheduled time off and personal needs
  • Tracking receivables and monitoring expenses
  • Developing new advertising and marketing strategies, and crafting daily or weekly specials
  • Hiring new employees, conducting performance reviews, and mentoring young or inexperienced staff
  • Troubleshooting problems between staff members or guests

12. Stay a step ahead of your competitors

A successful business owner knows about the competitors in his or her field. The business owner can make marketing strategies to counter the competition. Find out the day spas operating in your city and surrounding towns. You can visit their websites and social media page to understand more about the business.

If possible, visit these spas secretly and observe the activities and the customer services they offer. Have access to their service menu to know which extra services your spa can offer to beat the competition. Try to stay one step ahead of your competitors all the time.

13. Get a workable strategy to market your business

Initially, you’ll need a lot of capital to bring awareness to the spa-goers marketplace, but it will become more economical once your business picks up pace. Your strategic sales and marketing plan will help you step ahead of your rivals.

So far as sales plan is concerned, find out how the spa is going to be sold. What are the critical messages that your team will communicate to prospective clients when trying to bring them to your spa? Make sure your sales team is well trained to convince potential customers about the services your spa offers. You can conduct a training session for them each time you include a new service.

Also, determine who all your target customers will be. Will they be the residents or the corporate business? Finding out all these will enable you craft a workable marketing plan for your spa business.

14. Consider adding physical products

Once your spa guests get satisfied with your services, most likely they want to purchase products that can remind them of their spa visit, or that can help them out in their home spa routine. Here, you can choose to start offering high-quality products reinforcing the image you’re creating for your day spa.

Day spas require a lot of equipment to emulate the level of service found in resort spas. These capital expenditures will drive your start-up costs up fast, so you’re likely to need financial backing to get the show on the road. If you find that your grand plans exceed what the bank will offer you and what your personal savings can float, control costs by buying quality used equipment or scaling back the number of services you offer.

The equipment typically needed for a day spa includes massage tables, manicure and pedicure stations, and reclining facial chairs. Hydrotherapy equipment may include a Scotch hose, a hydrotherapy tub, a sauna, a Swiss shower, a Vichy shower, a Jacuzzi/whirlpool tub and a steam cabinet. High-quality spa equipment can run from $4,000 to $25,000 per item or even higher. So be sure to buy wisely. It’s easy to get caught up in equipping your spa with the best of everything-then never using it.

15. Equipment needed for your spa

In addition to all the typical office equipment, such as a copier and office supplies, you’ll need to buy the following:

  • Stool for aestheticians: $125
  • Reception desk stool: $150
  • Pedicure ottoman: $200
  • Magnifying lamp: $300
  • Hot towel cabinet: $350
  • Pedicure cart with footbath massager: $350
  • Facial steamer: $400
  • Facial vacuum/spray machine: $400
  • Manicure table and light: $400
  • Reception-area furniture: $400 each
  • Rotary brush machine: $400
  • Retail product display unit/shelves: $600
  • Massage table: $800
  • Reception desk: $1,300
  • Facial chair: $3,500
  • Optional Equipment
  • Steam cabinet: $2,000
  • Vichy shower: $3,500
  • Scotch hose: $3,800
  • Jacuzzi/whirlpool tub: $4,000
  • Swiss shower: $7,000
  • Hydrotherapy tub: $15,000
  • Miscellaneous Supplies
  • Manicure/pedicure supplies (polish, buffers and so on)
  • Massage and essential oils
  • Massage creams and lotions
  • Towels and spa garments
  • Retail inventory (candles, oils, spa garments, healing stones and the like)