We earn commissions if you shop through the links below. Read more

How to Start a Spa Business

Written by:

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 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.

How to Start a Spa Business

Fast Facts

Investment range

$5,550 - $24,100

Revenue potential

$70,000 - $470,000 p.a.

Time to build

1 – 3 months

Profit potential

$55,000 - $90,000 p.a.

Industry trend

Growing

Commitment

Flexible

What’s more relaxing than a massage at the spa? You can find all kinds of spas all over the country, from medical spas to day spas, from luxury spas to mobile spas. If you’re an aesthetician or a massage therapist, why not open your own spa and break into a $17 billion market? You could start small with a mobile spa and eventually open your own spa paradise to share with your community.  

Succeeding will require hard work and a bit of business knowledge. Fortunately, you’ll find everything you need to know in this step-by-step guide designed to relax your nerves and prepare you to launch your new spa.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a spa has pros and cons to consider before deciding if it’s right for you.

Pros

  • Boost Mental Health – Help people de-stress and improve wellness
  • Good Money – The average spa service costs $75
  • Room to Grow – Eventually start your own spa franchise

Cons

  • High Startup Costs – Pricey equipment needed, even for a mobile spa
  • Stiff Competition – Compete with established spas

Spa industry trends

Industry size and growth

spa industry size and growth

Trends and challenges

Trends in the spa industry include:

  • Mobile spas have become more popular as people seek to limit public exposure. Mobile spas provide services like massages, facials, and manicures in customers’ homes. 
  • Spas that serve wine are growing in popularity.

Challenges in the spa industry include:

  • The ease of starting a mobile spa business means more competition.
  • Labor shortages are making it difficult to find qualified massage therapists and aestheticians to hire.
spa business Trends and Challenges

Demand hotspots

spa industry demand hotspots

What kind of people work in spas?

  • Gender – 79.7% of spa managers are female, while 16.5% are male.((https://www.zippia.com/spa-manager-jobs/demographics/))
  • Average level of education The average manager of a spa has a bachelor’s degree.
  • Average age – The average manager of a spa in the US is 44.1 years old.
spa industry demographics

How much does it cost to start a spa business?

Starting a mobile spa service costs about $5,500, which includes building a website, massage and facial tables and other equipment, and a down payment on a vehicle to transport equipment. Starting a spa in a physical location will cost about $25,000 or more. 

You should be licensed in the services that you want to offer, such as massage therapy and aesthetician services. Search Google Maps to find training schools near you. Keep in mind that licensing requirements vary by state.

You’ll need a handful of items to successfully launch your spa business, including: 

  • Massage/facial tables
  • Manicure tables
  • Pedicure seats and equipment
  • Massage oils and skin care products
Start-up CostsBallpark RangeAverage
Setting up a business name and corporation$150 - $200$175
Business licenses and permits$100 - $300$200
Insurance$100-$300$200
Business cards and brochures$200 - $300$250
Website setup$1,000 - $3,000$2,000
Space rental$0 - $5,000$2,500
Space preparation$0 - $5,000$2,500
Massage/facial tables and other equipment$2,000 - $10,000$6,000
Vehicle to transport tables and equipment - down payment$2,000 - $0$1,000
Total$5,550 - $24,100$14,825

How much can you earn from a spa business?

The average price of a spa visit is $75, and appointments generally last one hour. If you’re working as a mobile solopreneur, your costs will be limited to fuel and supplies like massage oil, so your profit margin should be about 80%. 

In your first year or two, you could work from home and have three spa appointments per day, six days a week, bringing in about $70,000 in annual revenue. This would mean more than $55,000 in profit, assuming that 80% margin. 

As your brand gains recognition, sales could climb to 20 appointments a day. At this stage, you’d rent a commercial space and hire staff, reducing your margin to around 20%. With annual revenue of nearly $470,000, you’d make a tidy profit of more than $90,000.

spa business earnings forecast

What barriers to entry are there?

There are a few barriers to entry for a spa business. Your biggest challenges will be:

  • High startup costs if you open a physical location
  • Standing out amid strong competition

Related Business Ideas

If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
How to Start a Spa Business

How to Start a Massage Business

How to Start a Spa Business

How to Start a Fitness Business

How to Start a Spa Business

How to Start an Essential Oils Business

Step 2: Hone Your Idea

develop a business idea

Now that you know what’s involved in starting a spa business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research spas in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a mobile facial business. 

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as massages.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

If you’re working by yourself, your services will depend on your licensing. Services might include:

  • Full-day spa services
  • Spa treatments like body wraps
  • Aesthetic treatments like facials
  • Other skincare services
  • Beauty services like makeup application
  • Manicures and pedicures
  • You could even add a beauty salon to your spa

How much should you charge for spa services?

The average spa service costs about $75 but prices vary based on the type of service. If you work by yourself as a mobile spa service, your costs will be limited to fuel and supplies. You should aim for a profit margin of 80% for a mobile spa, and 20% for a physical location.

Once you know your costs, you can 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.

Who? Identify your target market

Your target market will depend on whether you decide to offer services to men or women. Most spas are for women of all ages, so you should spread out your marketing to include sites like TikTok, Instagram, and Facebook.

Where? Choose a location for your spa business

Here’s what to consider when electing the ideal location for your spa business:

  1. Visibility and Accessibility: Opt for a site that’s easily visible and accessible. Good road connectivity and parking availability are crucial.
  2. Competition: Avoid areas saturated with spas unless you offer something unique. It’s often better to be a big fish in a small pond.
  3. Size and Layout: Ensure the space can accommodate your services, including treatment rooms, a reception area, and possibly a relaxation lounge.
  4. Ambiance: Your location should align with the tranquil and rejuvenating atmosphere of a spa. A peaceful, less noisy area contributes to a more relaxing environment.
  5. Regulations and Zoning: Check local zoning laws to ensure spa services are permitted in your chosen location, and be aware of any regulations specific to the spa industry.

Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

spa business idea rating

Step 3: Brainstorm a Spa Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “spa” or “day spa”, boosts SEO
  • Name should allow for expansion, for ex: “Tranquility Spa Group” over “SkinCare Spa Studio”
  • Avoid location-based names that might hinder future expansion
  • Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

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 with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Spa Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: Summarize your spa’s mission to provide a luxurious and therapeutic experience, highlighting unique treatments and a strategy for attracting a diverse clientele.
  • Business Overview: Describe your spa business, focusing on offering services like massages, facials, and body treatments in a serene, upscale environment.
  • Product and Services: Detail the range of spa services provided, including relaxation and therapeutic massages, skin care treatments, and wellness programs.
  • Market Analysis: Assess the demand for spa services in your area, identifying target demographics such as local residents or tourists seeking relaxation and pampering.
  • Competitive Analysis: Compare your spa to local competitors, emphasizing unique offerings like specialized treatments, experienced staff, or exceptional customer service.
  • Sales and Marketing: Outline your approach to market your spa, using strategies like online advertising, partnerships with hotels, or offering membership packages.
  • Management Team: Highlight the qualifications and expertise of your management team in spa operations, customer service, and wellness therapies.
  • Operations Plan: Describe the day-to-day operations of the spa, including appointment scheduling, service delivery, and facility maintenance.
  • Financial Plan: Provide an overview of financial aspects, including startup costs, pricing strategy, and projected revenue.
  • Appendix: Include supplementary documents such as detailed service menus, market research data, or employee training manuals to support your business plan.
what to include in 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.

Step 5: Register Your Business

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! 

Choose where to register your company

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’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to spas. 

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. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your spa business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
types of business structures

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. 

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2023

starts at $0, plus state fees

4.7/5

starts at $0, plus state fees
Visit ZenBusiness

Step 6: Register for Taxes

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’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a spa business. You might also try crowdfunding if you have an innovative concept. 

types of business financing

Step 8: Apply for Spa Business Licenses and Permits

Business Licenses and Permits

Starting a spa business requires obtaining a number of licenses and permits from local, state, and federal governments.

You need to be licensed in the services you offer. Requirements vary by state. 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.

Step 9: Open a Business Bank Account

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 spa 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. 

Step 10: Get Business Insurance

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:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
types of business insurance

Step 11: Prepare to Launch

Launching a Business

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

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 Salon Biz, wellyx, or vagaro, to manage your appointments, invoices, payroll, marketing, and payments.

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Creating a website for your spa business is vital for attracting and retaining clients in today’s digital landscape. You can choose a DIY approach with user-friendly website builders, which offer customizable templates suitable for spas. Alternatively, hiring a professional web developer can provide a more unique and tailored online presence.

A well-designed website should be easy to navigate, visually appealing, and mobile-responsive, with clear information about your services, pricing, and easy booking options. Incorporating high-quality images and strategic Call to Actions (CTAs) like ‘Book Now’ or ‘Contact Us’ is crucial for user engagement.

Marketing

Here are effective marketing strategies for someone starting a spa business:

  1. Build a Strong Online Presence: Utilize social media platforms to engage with clients and post about special offers, new treatments, or events.
  2. Local SEO Optimization: Optimize your website for local searches to attract nearby clients. Include relevant keywords, your location, and register your business on Google Business.
  3. Leverage Customer Reviews: Encourage satisfied customers to leave positive reviews on platforms like Google, Yelp, and social media. Respond to reviews to show customer engagement.
  4. Create Loyalty Programs: Offer loyalty cards or membership programs to encourage repeat business. This can include discounts, free services after a number of visits, or special member-only offers.
  5. Utilize Email Marketing: Collect emails from clients and send regular newsletters with special offers, new services, health tips, and seasonal promotions.
  6. Partner with Local Businesses: Collaborate with nearby businesses for cross-promotion. For example, work with local gyms, health food stores, or hotels to reach a wider audience.
  7. Host Events and Workshops: Organize wellness workshops, open house events, or spa parties to attract new clients and provide a unique experience for regulars.
  8. Offer Customized Packages: Create tailored service packages for different target groups, such as couples, bridal parties, or stress relief packages for corporate employees.
  9. Engage in Community Events: Participate in local fairs, festivals, and charity events to increase visibility and network with potential clients.
  10. Incentivize Referrals: Implement a referral program where existing clients get benefits for bringing in new customers.

Focus on USPs

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 spa 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 spa business could be:

  • Relax from head to toe with luxury spa services
  • Massages and facials in your home – we bring the spa to you! 
  • Wellness treatments for the mind and body
unique selling proposition

Networking

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 spa, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in spas 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 spas. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

Building a Team for a New Business

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a spa business include:

  • Aestheticians – aesthetic services like facials
  • Massage Therapists – massage services
  • Nail Technicians – manicures and pedicures
  • General Manager – scheduling, ordering, staff management, accounting
  • Marketing Lead – SEO strategies, social media

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. 

Step 13: Run a Spa Business – Start Making Money!

Running a Business

Spa services are a treat that many people enjoy, and they’re also big business, making up a $17 billion industry. If you’re an aesthetician or massage therapist, you know how much pleasure and wellness benefits your skills can provide, so why not open your own spa and get a share of that huge market?  You can start small but think big, and someday have a whole chain of spas. 

You now have a good foundation of business savvy, so it’s time to start massaging your way to entrepreneurial success! 

Spa Business FAQs

How profitable can a spa business be?

Spas, even mobile spas, can be very profitable. The average spa service is $75, so if you just do a few a day, you’re making good money. 

How should I price my spa services?

The average price of spa services is $75. You should check other spas in your area to see what they charge for various services and price yours to be competitive.

What is the most profitable spa service?

The profitability of spa services can vary depending on factors such as location, target market, and pricing structure. However, services like massage therapy, facials, and body treatments tend to be popular and potentially profitable options in the spa industry.

What are the three most popular spa treatments?

The three most popular spa treatments are often considered to be massage therapy, facials, and manicures/pedicures. These services cater to relaxation, skincare, and overall well-being, and are commonly sought after by spa-goers.

How can I differentiate my spa business from competitors in the market?

To differentiate your spa business from competitors, you can focus on several strategies. This includes offering unique and specialized services that are not widely available in the market, such as signature treatments or customized experiences. Providing exceptional customer service, ensuring a tranquil and inviting ambiance, using high-quality products, offering personalized consultations and recommendations, and staying up-to-date with the latest trends and techniques in the industry can also help set your spa apart.

How can I ensure a relaxing and comfortable atmosphere for clients in my spa?

To ensure a relaxing and comfortable atmosphere for clients in your spa, you can take various steps. This includes creating soothing and aesthetically pleasing interiors with calming colors, soft lighting, and comfortable furniture. Playing relaxing music, using aromatherapy to enhance the ambiance, maintaining cleanliness and hygiene throughout the spa, providing cozy robes and slippers, and ensuring privacy during treatments are also essential.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

How to Start a Spa Business