How to start a Spa Business: Essential Points to Consider
As the interest in spas and wellness continues to rise, so do the opportunities to be involved in the spa and wellness industry. While existing spa owners are exploring new and innovative ways to attract this growing audience, there are also many opportunities for newcomers to the spa industry to set up new ventures that can take advantage of this booming marketplace.
One of the biggest concerns for those starting out in the industry is how to start a spa business which can succeed amongst existing competitors in the market. Spa management courses are a great place to begin learning how to run a profitable and successful spa business. These courses teach you the intricacies of establishing a business, how to grow your business, how to hire a great team and how to maximize return on investment. They can also offer advice on how to create a strong foundation for your business as well as guiding you through the most common scenarios you will face while owning a spa business.
1. Make a Business Plan
Creating a business plan is one of the first and most crucial steps for building any kind of business. So, when it comes to starting your own spa, it is essential that you have a plan in place which can be followed and then adapted depending on the circumstances. An effective business plan should include the following elements:
Choose a Business Model
As there are many types of spas within the huge spa and wellness industry, it’s important to have a business model in place before you set up your spa business. For this, you’ll need to research the market trends, check what your competitors are doing, understand what your audience is looking for, bear in mind your experience within the industry, and work out the kind of investment that you are capable of making. With all this taken into account, some of the most popular business models within the industry are:
- Destination spa
- Day spa
- Club spa
- Ayurvedic spa
- Mobile spa
Deciding the services to offer
Which services and solutions to offer your clients is another huge consideration when starting a spa business. Again, it will be important to know the kinds of services that your competitors are offering so you can use this information to your advantage to ensure that your business stands out in a crowded marketplace. The usual must-have services of spa businesses are:
- Massages
- Body exfoliations
- Manicures & pedicures
- Aromatherapy
- Hydrotherapy
- Acupressure
Determining the target audience
Your business model and the services that you decide to offer should be geared towards the type of audience that you wish to cater for. Deciding your target audience is a crucial part of your business plan as your customers are the people who will help you grow your business and offer opportunities for expansion.
Estimating the costs and funding
By evaluating all the costs and funds available from the very beginning, you’ll learn how to open a spa in the most cost-effective way. Having a ballpark figure in mind will help you to make the right investments as well as offer services that are affordable to you and your audience. This process also involves finding organizations and individuals who might be interested in funding your spa business, as this will aid with cash flow.
Select a location
Selecting a location that works for your target audience and the services offered is vital. A bustling, easily accessible, urban location like a shopping mall will ensure high footfall and be able to attract new and repeat customers alike, lending itself to day spas or drop-in appointments. Conversely, spas set in more rural locations will still need to be relatively easy to access but offer stunning natural surroundings or additional onsite facilities to make the longer journey worthwhile and the overall experience more special.
2. Check the Legal Requirements
Just like all businesses, those in the spa industry will need the required official documentation to show that all elements of the business are legitimate. Fulfilling all the legal requirements will mean you already have everything in place should you wish to expand your business in the future, saving you from any kind of authority questioning your paperwork further down the line.
Licensing and Training
It is essential that your spa therapists, both new and experienced, are fully trained, licensed and legally capable of carrying out the various services offered to your clients. Having a certified team and a business that fulfils all spa license requirements gives you peace of mind, increased security and the ability to expand into new regions and locations.
Permits
Having permits in place allows you to form a limited liability company, giving you the chance to gain different kinds of tax benefits while acquiring insurance for your employees and staff. Permits are important spa legal requirements as they also protect your business from fire damage, theft, and other such unforeseen circumstances. Since your business also involves using expensive equipment, it’s best to issue permits early on to avoid any kind of financial difficulties.
3. Continuously Update Operations
Implementing smooth-running business operations from the outset are the lifeblood of a successful business and need to be factored into spa start-up costs. Having effective operations in place also allows you to make enhancements to your existing offerings more easily and improve the quality of services you provide.
Sourcing of equipment and products
Irrespective of the business model you choose, investing in top-quality equipment and products is a must. Be it a day spa or a destination spa, the quality of your offerings will have a big impact on a client’s decision to return or not. The originality of your services will also affect whether your customers recommend you to their acquaintances, generating some much-needed word of mouth for your spa business.
Staffing
Your employees are the biggest ambassadors of your business as they are the ones who actually execute your business plan and provide your chosen services. Hiring qualified people for the job is therefore very important, whether that be spa therapists, spa managers or waiting staff.
Sales, advertising and marketing
Once your business plan, business model, funds, documentation and staff are in place it’s time to start marketing your business. When starting your own spa, building a strong brand image and generating sales by reaching your target audience through advertising and marketing is essential. The most popular channels to get the word out about your new spa are TV, print media, e-blasts and social media, while traditional word of mouth also continues to be one of the most effective ways to spread the word.
Now that you have a basic idea of what your business should include, it’s time to execute your vision and start achieving your business goals!
Learn how to open a spa with Spa Business Education
And there you have it; how to start a spa business! While starting a spa business will be a most rewarding experience, doing it without any previous experience or at least some sort of education is usually a recipe for disaster. What we’ve covered in this guide is only the utmost surface of the process on how to open a spa. Every step we’ve described so far in this guide can be delved into many times deeper, and usually require you to do so.
If you desire a more comprehensive understanding of the ins and outs of creating a spa business plan and/or spa business model to run your own spa business, contact Spa Business Education today. We offer the markets only comprehensive spa management course online, giving you all the tools, knowledge, strategies and inspiration you need to open your own spa and run your own wellness centre with confidence and ease.
FAQ- Opening a spa
In this next section we’ll cover some of the most frequently asked questions we at Spa Business Education get asked from time to time.
How much does it cost to open a spa?
Simple answer: it all depends on your spa vision.
“How much to open a spa?”, “What spa start-up costs are there?”, etc. are by far the most common questions we get. Unfortunately, to most of our askers’ dismay, there is no clear answer. There are a great number of possible variables affecting the cost to open a spa including:
-
Hard costs (Actual facility expenses):
Construction/renovation, procurement of furniture, fixtures and equipment, inventory for professional use, administrative and office supplies, etc.
-
Soft costs (Costs that are not necessarily “things”):
Professional fees (architect fees, interior designer fees, etc.), subscriptions (spa software such as inventory database), miscellaneous (blankets, towels, robes, staff uniforms), training/education costs, operating capital.
All of these costs can vary depending on a number of reasons including everything from where in the world you are, to what type of spa you’re planning to open.
A VERY rough estimation on how much it would cost to open a spa is to look at the square footage your spa will be using, then multiply it by $200 per square foot. Once again, this is a VERY rough estimation where the costs could both be much higher, or much lower.
What’s the best tip you can give to someone who wants to start a spa?
Create a spa business plan/spa business model.
Poor/ineffective business planning along with financing hurdles, inadequate management and marketing mishaps are the four most common reasons why a small business fails according to Investopedia. Around 20% fail in the first year, 50% won’t make it past the 5-year mark, and only about 33% make it ten years or longer.
In our opinion, the most important of them all is creating a business plan. Having a concrete and detailed business plan allows for better management of the other three. Bad planning has, and always will be, the downfall for many businesses and spas.
Do I need any prior experience to open a spa?
No, but it does help.
If you have a desire to learn more about the spa industry and want an edge over other spa business owners, we’d suggest you enrol in our spa management course today. In it you will receive all the tools, strategies, knowledge and inspiration on what you need to be an exceptional spa manager and open your own successful spa.
