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.
- 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
- High Startup Costs – Pricey equipment needed, even for a mobile spa
- Stiff Competition – Compete with established spas
Spa industry trends
Industry size and growth
- Industry size and past growth – The U.S. health and wellness industry was worth $17.5 billion in 2021, and has declined slightly in recent years due to a dip during the pandemic. The market is, however, poised to rebound as the pandemic winds down.
- Growth forecast – The global spa industry is expected to grow an impressive 12.1% annually through 2028.
- Number of businesses – In 2022, 19,919 health and wellness spa businesses were operating in the U.S.
- Number of people employed – In 2022, 382,470 people were employed in the health and wellness spa industry in the U.S.
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.
- Most popular states – The most popular states for spas are California, Washington, and Utah.
- Least popular states – The least popular states for spas are Oklahoma, Louisiana, and Tennessee.
What kind of people work in spas?
Zippia.com is useful for this section.
- Gender – 79.7% of spa managers are female, while 16.5% are male.
- 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.
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 Costs||Ballpark Range||Average
|Setting up a business name and corporation||$150 - $200||$175
|Business licenses and permits||$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.
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
Step 2: Hone Your 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.
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 your business premises
In the early stages, you may want to run your business from home as a mobile service to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a space for your spa. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
- Central location accessible via public transport
- Ventilated and spacious, with good natural light
- Flexible lease that can be extended as your business grows
- Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a 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: “Jim’s Bakery” over “Jim’s Cookies”
- 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 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: Brief overview of the entire business plan; should be written after the plan is complete.
- Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
- Product and Services: Describe your offerings in detail.
- Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
- Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
- Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
- Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
- Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
- Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
- Appendix: Include any additional financial or business-related documents.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist at Fiverr 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.
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 ZenBusiness’s 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.
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.
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.
Step 8: Apply for Licenses/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.
Step 11: Prepare to Launch
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.
- 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.
Some of your business will come from the casual passerby or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
- Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
- Instagram: Same benefits as Facebook but with different target audiences.
- Website: 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 “Schedule Now”. This can sharply increase purchases.
- Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.
Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
- Signage – Put up eye-catching signage at your spa and website.
- Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal.
- Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
- Seek out referrals – Offer incentives to generate customer referrals to new clients.
- Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
- Pay–per-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.
- Influencer marketing – Pay people with large social media followings to promote your spa services. You can find micro-influencers with smaller followings and lower rates.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
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.
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
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
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: Start Making Money!
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 much does it cost to start a spa business?
You can start a mobile spa business for about $5,000. You’ll need a website, some equipment, and a vehicle to transport your equipment. To start a spa with a physical location will cost closer to $25,000 or more.
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.
What licenses do I need to start a spa?
You need to be licensed in the services you perform, or your employees who perform the services need to be licensed. You may also need various business licenses and permits at the state and local levels. Check with your local governments for requirements or visit MyCorporation’s Business License Compliance page.
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.