Pros and cons list for starting a spa on a notebook

4 Reasons Now Is the Ideal Time to Start Your Spa Business

By Lisa Starr

It’s spring in the northern hemisphere, and, at least in the US, many are beginning to resume their pre-pandemic activities as the vaccination rollout gathers steam. You can tell just by the increase in car and foot traffic, people are out and about. Nature just carries on with its cycles, immune to human drama.

As flowers sprout and trees bud, it’s easy to think about new beginnings. And, for the entrepreneurial-minded, that might mean starting a new business. I know, this may seem like a crazy idea at the moment, taking on something inherently risky. But the fact is, this could be the best time in the last 10 years to embark on a new business venture. Potential spa business owners, I'm looking at you.

Most of us had never lived through something like the pandemic of the last year. However, all of us have experienced market challenges and downturns, most stemming from economic or political changes. We know there is a cyclical nature to things; what goes down will come back up again. What’s unique about the current situation is the fact that this particular down cycle was health-focused, and the upswing will be as well. Seventy-eight percent of Americans say wellness is more important to them than ever.

Suddenly, the approximately 22,000 day spas and spa businesses in the United States will get the attention they have always deserved as places where consumers can receive relaxation and stress relief and learn how to take better care of themselves to maintain their healthy lifestyles and build strong immune systems. So, the positive thinkers among us in the spa industry may consider this situation an opportunity on a platter; if you’ve wanted to open a spa business that focuses on physical as well as mental and emotional health and wellness, there is no time like the present.

Some of the businesses that have become household names that we rely on today, such as Uber and Airbnb, were started during the financial crisis of 2008 in response to the market opportunities created by the changing fortunes of many consumers. We're already seeing entrepreneurs capitalizing on opportunities with new start-ups. Last year saw a major jump in the number of new business applications; while 3.5 million were filed 2019, 2020 saw an astounding 4.35 million. New businesses are booming.

Let’s consider some of the opportunities of the current moment to starting a spa business.

1. Locations and cheap financing are readily available

Unfortunately, many businesses (particularly small businesses) did not survive the prolonged lockdowns and other effects of the pandemic. But, looking on the flip side, this increases the supply of available locations for new tenants, and landlords are eager to fill them with their new spas. Rents in many locations are substantially below their previous levels, and you could potentially get a space that was previously a service-based business, saving money on build-out costs (and spa built-out projects can be expensive). Landlords are always willing to spend more and share in build-out costs in return for a longer-term lease, but there is much more flexibility in this process than there has been in the past. Now is the time to secure a top-notch facility for less than ever.

While opening a salon or spa has never had a high cost of entry, compared to say a car dealership or retail store where huge infrastructure and inventory investments are required, the cost of borrowing money right now is at a record low. While you still need a chunk of cash for buildouts, fixtures, furniture, and equipment (FF&E), and initial marketing, it will be possible to reach a cash-flow positive state in a matter of months. You can develop an attractive spa business plan, complete with compelling facts and data relating to the current consumer interest, helping you to secure financing. There's customer demand for the very spa services your day spa or spa will offer.

2. Consumers are actively seeking to improve their wellness

One positive side effect of the COVID-19 pandemic is the renewed interest in health we are seeing from consumers. For example, a recent study has shown that active, healthy adults fare much better if they contract COVID-19. These facts have underscored to many people their own responsibility in maintaining healthy self-care habits like regular massage, yoga, and fitness routines.  

COVID took a toll on mental and physical wellness, and consumers are eager to prioritize their self-care to course correct. As they get vaccinated, many are looking to frequent salons and spas more. Additionally, interest in some of the newer low-touch therapies such as infrared saunas, cryotherapy, ozone, LED therapy, and sound healing is growing. These low-touch spa services are also great for today’s clients who want to partake in something healthy—but perhaps do it with friends or without an appointment that they have planned days in advance. The prolonged time at home has, in effect, pushed a reset button on habits, and clients are willing to try new spa treatments and concepts in an open-minded way.

3. Staffing may be easier with many reconsidering their priorities and looking to start a career in the spa industry

Another result of the coronavirus pandemic is that people have stepped back to evaluate their current jobs. Being forced to work at home has brought work-life balance into focus. Many people will elect to change careers or, at a minimum, take on some part-time work in a new field. Hopefully, we can attract them to work in beauty and wellness, where we help people to feel their best. You have a much better shot now of hiring good candidates for your day spa or spa who share your passion.

While our shortage of qualified practitioners has not disappeared, there are hopes that more people will decide to embark on a second career as a wellness practitioner in one form or another (and the options are abundant: massage therapist, nail technician, etc.). As many people have lost their previous position, or hours have changed, there are plenty of people available for front desk and support roles at day spas and spas.

4. Acquiring clients is easier right now

While it is absolutely sad that some wellness and personal care businesses did not reopen post-pandemic, this means there are fewer choices for consumers now, so customer acquisition costs will decrease (as you have fewer competitors to contend with). Many clients will be searching for a new spa or salon as their previous choice had permanently closed. Wellness and beauty enthusiasts (your target market) are turning to the Mindbody app to see what's available in their area.

As consumers are more interested than ever in lifestyle options that help them to look and feel better and be healthier, they are motivated. Services and products that support the immune system and create balance in people’s lives should fare quite well. They're looking for businesses offering relaxing spa treatments. Witness the fact that spas that have fully reopened are recording record demand.

As always with starting a business, the basics still apply:

  • Find a customer problem to solve.
  • Make sure you have a solid and realistic understanding of the capital required and the revenue potential.
  • Carefully study the competition, if any, to see what works, and equally, what doesn’t and how to differentiate your day spa or spa.
  • Get your marketing engine firing on all cylinders. Technology has come so far that you may need fewer people to run your day spa or spa, but you’ll want to spend that savings on marketing efforts so your message gets through.

Best of luck, entrepreneurs!

See how Mindbody supports spa businesses.

Explore the software

About the author:

Lisa Starr Headshot

Lisa Starr

Principal

Wynne Business Consulting

Lisa is the Principal of Wynne Business Consulting & Education, which specializes in spa, wellness and salon businesses. Starr has over 35 years of experience in the beauty and wellness industry, spending the last 18 years as a consultant and educator helping wellness businesses optimize their operations while providing exceptional experiences for their guests. Starr is the Task Force Chair for the Global Wellness Institute’s Consulting Initiative, a Contributing Editor at Dayspa Magazine, a regular contributor to global trade publications, and a highly rated speaker at industry conferences. She also offers live spa management courses both online and around the globe.

New resources, straight to your inbox

Get updates on the latest industry trends, tips, and news.

We're committed to your privacy. Mindbody uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe at any time. View Privacy Policy

Back to top