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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 26, 2023
Investment range
$61,300 - $133,300
Revenue potential
$312,000 - $1,248,000 p.a.
Time to build
6 – 12 months
Profit potential
$62,400 - $249,600 p.a.
Industry trend
Growing
Commitment
Full-time
Here are the most important factors to consider when you want to open a wellness center:
You May Also Wonder:
Is a wellness center profitable?
The profitability of a wellness center can vary depending on factors such as location, target market, range of services offered, competition, and effective business management. Wellness centers have the potential to be profitable, especially when they provide high-quality services, attract a steady flow of customers, and effectively manage operational costs.
What happens during a typical day at a wellness center?
A typical day at a wellness center involves conducting fitness classes, providing personal training sessions, offering massage therapy and body treatments, providing nutrition counseling and wellness coaching, conducting wellness workshops or educational sessions, administering alternative therapies, managing appointments and client consultations, maintaining facility cleanliness and functionality, handling administrative tasks, including scheduling, billing, and marketing.
What is the growth potential of a wellness center?
The growth potential of a wellness center can be significant due to factors such as increasing awareness and demand for holistic health and well-being, expanding market opportunities, diversifying services and offerings, developing strategic partnerships, adopting technology solutions, capitalizing on emerging wellness trends, and expanding the target market by offering specialized programs.
What type of business is a wellness center?
A wellness center is a type of business that focuses on promoting holistic well-being and providing various services to enhance physical, mental, and emotional wellness. It can offer a range of services such as fitness classes, personal training, massage therapy, nutrition counseling, alternative therapies, and wellness coaching. Wellness centers aim to provide comprehensive support to individuals in their pursuit of a healthy and balanced lifestyle. They may operate as standalone businesses or be part of a larger health or fitness facility.
Trends
Challenges
Startup costs for a wellness center range from $60,000 to $200,000, but could be substantially more depending on the extent of the services you plan to offer. Costs include the space rental and preparation, equipment to deliver services, and a labor and operating budget.
You’ll need a handful of items to successfully launch your wellness business, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $100 - $500 | $300 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$500 | $300 |
| Website | $500 - $1,000 | $750 |
| Space rental and preparation | $20,000 - $50,000 | $35,000 |
| Equipment for services like massage | $10,000 - $30,000 | $20,000 |
| Labor and operating budget | $30,000 - $50,000 | $40,000 |
| Sales and marketing budget | $500 - $1,000 | $750 |
| Total | $61,300 - $133,300 | $97,300 |
The prices you charge will vary by service. These calculations will assume that the average client will spend $100 each time they come in. Your profit margin after all costs should be about 20%.
In your first year or two, you might have 10 customers a day six days a week, bringing in $312,000 in revenue. This would mean $62,400 in profit, assuming that 20% margin.
As you gain traction, you might have 40 customers a day. With annual revenue of $1,248,000, you’d make a tidy profit of $249,600.
There are a few barriers to entry for a wellness center. Your biggest challenges will be:
Now that you know what’s involved in starting a wellness center, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.
Research wellness centers in your area to examine their services, price points, and customer reviews.
This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.
You’re looking for a market gap to fill. For instance, maybe the local market is missing a wellness center that offers holistic health services or that offers full wellness programs.
You might consider targeting a niche, such as alternative medicine.
This could jumpstart your word-of-mouth marketing and attract clients right away.
The list of services you can offer in a wellness center is long, and could include:
Your prices for services should depend on market prices in your area, but also on your ongoing costs.
Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Wellness centers primarily attract health-conscious individuals, professionals in high-stress roles, and those seeking alternative or holistic therapies.
The aging population and athletes often visit for treatments aiding in age-related issues or physical recovery.
Location plays a role too; centers in tourist areas may cater to vacationers, while urban centers might target local residents and corporate clients.
When selecting a wellness center location, begin with a demographic analysis to understand and cater to the target clientele’s needs. Ensure the chosen site is both visible and easily accessible, either by public transport or with adequate parking.
Always stay within your budget for rent or purchase, but factor in additional costs such as utilities and renovations. Confirm that local zoning laws permit the operation of a wellness center, and aim for a location that offers safety, serenity, and proximity to complementary businesses.
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation.
Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to wellness centers.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your wellness center will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a wellness center business. You might also try crowdfunding if you have an innovative concept.
Starting a wellness center business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your wellness center business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as mindbody, or Appointy, to manage your appointments, marketing, employees, and payments.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales.
Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Book Now”. This can sharply increase purchases.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your wellness center meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your wellness business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a wellness center business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in wellness centers for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in wellness centers. You’ll probably generate new customers or find companies with which you could establish a partnership.
Potential positions for a wellness center business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Starting a wellness center can be a very rewarding pursuit, as you help people with their overall well-being. It can also be very profitable in a $23 billion industry. You could even grow your business over time by expanding your space or adding new locations.
Now that you understand the business, you’re ready to get your successful wellness center up and running!
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