How to start a spa business: 8 steps to launch
- Research your target market and any business license or education requirements before moving forward on your spa business idea
- Create a vision and mission statement to define the purpose of your business
- Allow time to acquire local or state licenses and certifications before launching your spa business
From massage therapy to facials to body treatments, there’s no shortage of demand for day spa services. The spa industry is a multi-billion dollar business, with the spa services market expected to grow by more than $133 billion by 2027. If you’re an entrepreneur who’s passionate about the wellness industry and have a business idea to provide spa services, this could be the right time to start a spa business.
How to start a spa business
When opening a spa business, there are many considerations to make—from your business location to what services you’ll provide and at what prices. Researching the spa market in your area will help ensure you are able to establish your niche and reach your target customers and convert them into paying clients. To help with this, follow these eight steps to launch your own business and pursue your entrepreneurial dreams.
1. Research the market and business requirements
Before you commit to opening a spa business, do some market research of both the local area you plan to serve and national wellness and spa trends. Identify what competitors are doing, who your target audience is—including demographics such as age, geographic location, and income bracket—and how your offerings will stand out from the competition.
Most new business owners don’t have the funds to run focus groups on their own, so they’ll rely heavily on data gathered from other sources. Scan social media and review sites to see what people are raving (or complaining) about and create a niche concept or service that helps differentiate your small business idea from existing businesses. Knowing what customers in your target market think about spa services—as well as what they spend on—will ultimately help you create an effective marketing plan.
Beyond knowing what potential clients spend money on, you also need to consider any mandatory local or state requirements to run a business in the spa market. For instance, you’ll likely need to obtain a state cosmetology or esthetician license and certification as well as register with the local health authority, depending on your area. Most companies that offer skin, hair, or nail treatments must obtain a cosmetology license or other business license to operate.
Don’t forget to think about location. Do you want a physical day spa business, or do you prefer to provide mobile spa services in clients’ homes? If you need a physical space, meeting with a realtor for a tour of open commercial spaces in your area can give you a sense of availability and cost.
2. Create your vision and mission statements
As a spa owner, there are many important decisions to make early on that will influence other aspects of your business, including your company name, logo, and overall vision and mission. As the founder, you already might have inspiration for this, or you might be looking at competitors and closing a gap you see in the market.
You’ll want both a vision statement and a mission statement for your company. Both help you to determine your company’s purpose and communicate it internally and to outside stakeholders.
Start with writing a vision statement, which is usually a phrase or brief sentence that explains the purpose and goals of your business. For example, a spa company vision statement might be “to empower people to relax.”
A vision statement is related to but distinct from a mission statement in that a mission statement helps you put your vision statement into action. It more clearly defines your company’s objectives and goals and the steps to get there. For example, a spa business mission statement might be: “Helping people take time for themselves and their wellness through relaxation services, aromatherapy, and massage.” Your mission statement is essentially how you achieve your vision.
3. Select the spa services you’ll offer
There are a variety of services you could offer as a new spa business owner. While you can always expand later, choosing a core set of services when you launch can help you determine initial startup costs. For example, if you offer facials, you’ll need scrubs, creams, serums, masks, and mist machines.
Some services you could offer at your day spa include:
- Manicures and pedicures
- Skincare treatments (e.g., facials, exfoliation)
- Hair styling
- Body treatments (e.g., massage, scrubs, body wraps, mud baths)
4. Choose a business structure
Starting a spa business means you’ll need to select a business structure. Selecting the right business structure early on is important since it can heavily impact future management or funding decisions.
The most basic business structure is a sole proprietorship, which is an incorporated company with one owner. If you don’t form a limited liability company (LLC) or corporation when registering your spa business, you’ll be a sole proprietor by default.
Choosing to form an LLC is the next step up from a sole proprietorship and usually means you’ll file paperwork and fees at the state level to operate your business. This provides more personal protection from any legal action since the LLC will be responsible for and own company assets. Many spa business owners choose to form an LLC for this additional layer of protection as well as the perception of credibility that comes with having a more formally structured business.
If you have a business partner, you might file as a partnership instead. For example, if you select the partnership business model, your partner will be formally eligible to make business decisions and sign paperwork, such as loan documents, based on their percentage of ownership. Being intentional about the structure of your business will help you understand early on what your responsibilities are, including legal and financial.
5. Define your brand identity
Although you’ll refine your services in your small business plan later, the services (and/or products) you offer can influence decisions about your brand identity. Your brand identity includes the logo, designs, and colors that distinguish your day spa from competitors and can help you attract new customers when used as part of your marketing plan. You’ll also want to create a compelling brand mark, which is essentially your company’s recognizable visual, like the Nike swoosh.
Consider hiring a freelance graphic designer who can take your ideas and turn them into a logo and brand mark. You can hire freelancers on sites like Upwork, Fiverr, and 99Designs for relatively affordable rates.
6. Craft your marketing strategies
If you have a great concept and there’s demand for your spa business in your target area, that’s a great foundation. But a sustainable and profitable business must continually attract new customers. This means developing a marketing plan with free or low-cost marketing strategies to get the word out to potential customers and generate foot traffic.
Some simple marketing ideas to get you started include:
- Build a business website that follows SEO best practices while offering necessary information about your business, including hours, services, and location
- Claim your Yelp Business Page, where you can add your contact information, upload photos to showcase your services and products, and respond to user reviews
- Host an opening day event with special promotions, like a gift card sale
- Create loyalty cards to encourage repeat business from clients
- Develop a referral program to encourage word-of-mouth
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7. Evaluate financing
Now that you’ve thought through the service elements and branding to run your own business in the spa market, it’s time to think about funding. Most new businesses explore multiple options to help them get off the ground, including:
- Personal savings
- Grant programs
- Pitch competitions
- Friends and family or private investors
- Business loans, like those available from the Small Business Administration
Your goal is to figure out how much money you need both upfront and on an ongoing basis. For instance, startup costs will include spa equipment, like massage tables, linens, and facial misters, while ongoing expenses include rent, utilities, internet, and more. Most new spas will not turn a profit right away, so it’s smart to add some buffer time into your financing plan.
8. Document your findings in a business plan
When planning to start your own spa, it’s vital to have everything in one place, including your market research, vision and mission, services, business structure, brand identity, marketing strategies, and financing options. That’s what a business plan offers. This document gives you the best chance for success and serves as a blueprint for your company. A business plan helps you see the big picture and is an essential document if you’re seeking a business loan or grant funding.
Set your spa business up for success
Learning how to start a spa business requires a great deal of research and planning. You must create your vision, find a niche that helps you stand out from the crowd, craft your marketing strategies, and document it all in a solid business plan.
Spa management is a rewarding and exciting opportunity to provide valuable services to those around you. As you begin taking on new clients, continue marketing your brand to build a loyal following and grow your business.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.