How to Start a Spa Business
By Kyle Magin
So you’re ready to open a spa business.
If you’re familiar with the industry, you know its rewards and challenges.
Nothing beats sending a relaxed client into the world after leaving a day spa. There are also bumps to deal with before opening—finding the right location in the right market, licensing your business, and finding good employees.
We’ll help you figure it out.
Write a business plan
It’s really important to write a business plan. If your day spa is going to be a journey, think of this part as starting the GPS. It’ll guide you to your destination and help organize your plans and priorities.
Create your brand
Start with the fun part—just don’t think it’ll be easy.
Selecting a name for your business and creating your brand are essential first steps. You’ll figure out what you want to be called, how you’ll interact, and how you want to look—think of it as how you’ll tell your customers about your business’s personality.
Pick your spa’s name
Your name should reflect your brand, the quality of your people and customer experience, and the range of the services you’ll offer. It may also include references to your community or family name. Picking a name is just that simple, right? Don’t worry if you’re not sure where to start. We’ve got a checklist on how to choose the perfect name for your spa or salon to help you with this step.
Create your brand
Your brand says everything about your business. It’s how you interact with clients and market to prospects, as well as how you present yourself visually.
Your visual brand identity will appear on signs, inside your spa, and on your marketing materials. Major facets include your:
Of course, we’ve written a guide to help you figure out how to create a brand.
Decide which spa services you’ll offer
The International Spa Association (ISPA) defines a business as a spa if it offers at least two of these services to spa-goers:
Skincare (includes makeup)
Body treatments (includes salon services and hair removal)
You may already know how to do one or more of these, and that’s great. But, if you’re offering a service you aren’t familiar with, know you’ll need to hire an employee or bring in a partner who is. Or, you’ll need to educate yourself.
Also, research any state or local licenses you’ll need to apply for and carry in order to offer the services you want. For help, here's our guide to writing the perfect spa menu, which should help you maximize revenue. Check out a video from industry expert Lisa Starr, for important service menu considerations during the COVID-19 pandemic.
Figure out what spa equipment you’ll need
The size of your location and the services you offer should dictate the equipment you'll need before starting.
Day spas may include showers and lockers for guests, and soundproof rooms if you plan to offer relaxing massages. Other items could include:
Washers and dryers for linens
Hot towel warmers
Eye and face masks
Shower supplies (soap, shampoo, conditioners)
Massage oils, incense, candles, and essential oils
Office equipment, like a front desk, chairs, and point-of-sale devices
Reception area furniture
An esthetician’s stool
Hair removal lasers
Exfoliating devices/pumice stones
A Jacuzzi or other hydrotherapy tub or shower
Research your particular place in the industry closely. Decide what equipment purchases you need to make before your business opens, and what you could buy later when space and finances allow.
Decide on an audience
You may have an idea about who you want your new business to serve, but really put some thought into it and write it down.
Massage is a very popular service from a customer preference standpoint.
Seventy percent of regular of female spa-goers and 60% of male spa-goers told researchers they’d had one in the past year, according to the 2020 Spa Trends in America Report.
Additionally, the report shows the services Americans are most eager to try next. There's a lot of interest—across different generations—in trying full-body skin treatments, facials, and advanced skin care. Providing these services could be a profitable investment in the future. Check out the report to see what's trending in your city.
Also, take a look at the wider spa industry for cues. About 41% of spa owners target men with new marketing promotions, according to a 2018 study released by ISPA. The share of male customers at spas grew from under 31% in 2007 to 47% by 2017, according to ISPA research.
These spa-goers may be worth targeting as you decide who you want to serve.
Retail sales and experience
Starting a retail operation means you're willing to sell stuff—hair and skin products, equipment, merchandise, and most importantly, gift cards—at your day spa.
Retail sales can be tricky—you'll have to hire or train staff to sell products and track inventory—but the payoff can add another 10% or more of revenue to your spa's bottom line. And, in a pandemic, retail can be an important revenue stream.
Also, think about the experience. How will a client make a retail purchase?
They could buy a product or merchandise from your front-desk staff. With the right spa software, service providers can easily upsell and recommend the perfect product during the service. If you’re going to sell products and merchandise online, it’s equally as important that the experience be easy to navigate.
Think about how you'll make a sale—will you have options for cash and cashless purchases? Since retail can really prop up your bottom line, make sure this is an easy and painless process for your clients and your staff.
Consider how you'll track your inventory, replenish it when it gets low, and store it. If you need help, we've written a handy guide to how to earn money off retail at your spa.
Sell gift cards
Gift cards are a big part of retailing. You’re creating a year-round product, and gift card recipients tend to spend above and beyond their gift's value.
For instance, a woman redeeming a $100 Mother's Day gift card may buy a few more products or add an extra service. That makes her visit worth $105 or even $150.
You've also created an opportunity to add a new client who may not be familiar with your services. Check out our guide on how to sell gift cards like a pro.
Now it’s time to tell new clients about your spa.
Marketing is a catch-all term with lots of facets, so think about the most appropriate sort of marketing for your target customers in your area.
A few good ways to reach customers are:
Social media may spring to mind first, and it's a great way to get the word out. Running promotions on Facebook and Instagram—maybe offering grand opening discount services or referral codes—attracts the public's attention and gets them to spread your reach.
Eventually, you'll want to incorporate email campaigns targeting both your existing clients and new prospects with incentives to get them in the door.
- Our guide to email marketing will help you with the basics.
You may also consider printing flyers to hand out in your local area to let shoppers know about your day spa.
This all costs money and time, so as part of your business plan, assess marketing costs. To get a handle on your expected marketing costs, check out our guide on how to create a marketing plan and budget, as well as the accompanying template.
By now, you should pretty much know how much money you'll need to run your day spa.
In addition to the above, include the cost of rent (more on choosing a location soon), and the people you need to hire, in addition to everything else you'll need to pay to start your business up and keep it running.
If it all sounds a little daunting; don't worry. We have a handy blog on how much it really costs to open a spa.
Location, location, location
Choosing the right location for your business is exciting. Deciding on where to hang your shingle—what sort of neighborhood you'll fit into budget- and lifestyle-wise—sets the tone for your spa.
Some factors to consider are:
Do they have the sort of clients you want?
Some towns and cities won't let you open a business in a residential area, others may. Research this while getting your license to see what the rules are where you want to be.
Our checklist on selecting the right location for your salon or spa should help you navigate the process a little more easily.
You're nearly ready to open a spa business. You've scoped out a location, written a business plan, and you've got a passion for making clients feel great.
Now it's time to find the financing to fund your dream.
There are many ways to find the money to get a business off the ground. Some people self-finance and/or take personal loans from friends and family to help themselves get established. Others immediately look for a small business loan.
You'll also need to set up a business banking account to help you find financing and separate your personal finances from your business expenses.
Choose your spa management software
Scheduling staff and clients, marketing, managing payroll, reporting… for a small business owner, there’s no end to the job of running your spa effectively.
That’s where a great spa software system can step in to help. Look for one that handles your needs and automates as many tasks as possible so you can spend as much time as possible focusing on your clients and staff.
Booker by Mindbody is one such platform. It’s specially crafted with spa and salon businesses in mind and incorporates a lot of different functionality under one program. Importantly, Booker lets you offer a safe and high-end experience for your clients.
Create a great user experience
The word 'seamless' is overused. But it's also exactly what you want your customer's experience to feel like any time they visit your spa and website.
Put yourself in your client's slippers while you're crafting your physical and web spaces.
A few things to remember when designing a website is to make sure it’s clear, usable, and has a cohesive feel from your home page to a payment page and everything in between.
It should perform well on mobile devices to be responsive, which means fitting any screen.
Security is a big consideration for clients—if they're making credit card purchases, they'll want to trust that data is securely stored.
Check out our guide to building a website for your business for tips.
Just as clients wonder about their digital security, they're also thinking about the physical security of their things.
Provide a secure locker area or cubbies that your front desk staff can monitor while people get spa or salon treatments. If people will need to change their clothes for certain services, you may want to provide a locker area in the bathrooms or designated changing area.
Investing in soundproofing is a good idea if you're selling peace and relaxation. Nobody wants their deep-tissue massage interrupted by hearing someone in the next room over.
Lighting and music
Take the time to get the lighting and music correct in your day spa.
These details help set a calm, relaxing tone. Put people in a peaceful mood they'll remember the next time they're thinking about seeking out spa and salon treatments.
Hiring, training, and retaining staff
You might say we save the most important—or most pressing—part of starting a new spa for last.
The spa industry is at a major crossroads right now. There are more people than ever employed in day spa work, but there are also a record number of spa and salon job openings, according to ISPA.
Translation: Finding good help is challenging.
There’s lots to think about when hiring your team, and we'll discuss some of it here.
Deciding what staff you need and what you'll pay them
Look at the spa and salon services you plan to offer. If you can't perform them—or you'll be busy, you know, running your small business—you'll need to staff up.
Think about what you want your staff to do—are they going to perform services as well as check people in and make retail sales? Or do you want a dedicated front-desk employee? If you're looking for a jack-of-all-trades, you'll have to train them on your systems and software, so take that into account.
Additionally, if staff are going to perform services that must be licensed, figure out if they'll need training and their own license, or if they can operate under yours.
Determining compensation for your new team can be tricky. It's important to get it right, though. Payroll is one of the biggest expenses you'll have, along with rent. We've written a series of blog posts that cover all aspects of compensation, including how much to pay your support staff, appropriate compensation for service providers, and even the comp at top (aka how much you should compensate spa managers and how much you can expect to make as a spa owner).
Once you make your first hire—congrats!—you'll need to train them to your specifications.
Create an onboarding plan
Some businesses see a lot of success with a very carefully thought-out onboarding plan. A new hire is introduced to all relevant fellow employees and gets a feel for how each part of the business runs in order to understand their place within it. This may occur over a day or a few days, weeks, or even up to a few months.
By starting slow, you may save time down the road.
Provide software training
If this hire is going to handle sales and your business management software, they'll need extra training on your systems and procedures, as well as logins.
Some business management software programs offer free trainings for every level of staffer—from front-desk to management. Check out Booker’s software certifications program for an idea of what’s on offer.
While no guide can replace the experience of starting your own business in this industry, hopefully, this has been helpful. Know you can always reference Mindbody's education hub for tips on making your business successful from start-up to franchise.