Creating a Spa Business Plan: Part 1

Deb Szajngarten


Opening a spa is a great opportunity for the right entrepreneur. Whether you are looking to open a business and enjoy the lifestyle a spa represents, or you have years of experience as a massage therapist or esthetician and want to be your own boss — there’s plenty of opportunity for success.  According to iSPA’s 2014 U.S. Spa Industry Study, the spa industry earned $14.7 billion in revenue with 164 million spa visits from 20,180 locations.

The big question is how do you turn your dream into a reality?  Well, the first step toward following your dreams is to build a business plan. Not only does a concise business plan give your future spa a clear roadmap to success, it’s necessary if you plan to obtain funding from banks or to recruit partners.

In this blog, we will cover the first 5 steps to creating a spa business plan.

Step 1: Describe Your Company

This first section of your spa business plan should cover the basics about your company, its mission and operational philosophies. Include your company name, address and contact information, as well as your business structure (sole proprietorship, Limited Liability Company (LLC, etc.). State the purpose of your organization and describe your customer service philosophy.

Step 2: Plan Your Finances

According to the Small Business Administration, about half of all new establishments survive five years or more and about a third survive 10 years or more. In many instances, a business’s failure to survive is due to poor planning and lack of funds to sustain it through its first few years of operation.

That’s why you must know how much money you need to get started, where it will be coming from, what you will be spending it on, and how long it will take you to earn it back.

Make sure to include projected financial statements spanning at least three years, or until you estimate the business will be cash flow positive.

Include all expected startup expenses based on your spa experience and list potential sources of initial funding. Estimate how many customers you will serve and how quickly your client base will grow, then base your revenue and direct cost estimates on those numbers.

Here are some other things to consider:

  • Calculate your monthly expenses, including rent, licensing, training, payroll, supplies and an emergency fund.
  • Calculate how much of a cushion you have in savings and how much you absolutely must make each month to stay in business.
  • Figure out how much you'll charge for services. To do this, estimate how many services (such as, massage, facial, etc.) you might perform in a week and figure out how much you’ll need to charge in order for you to make a net profit. Try using a price point that is both fair for your clients and prosperous for you.
  • Consult a certified public accountant (CPA) to help you estimate your taxes.

You can check out this business start-up cost calculator for a list of other items you may want to include in your financial summary.

Step 3: Define Your Target Market

Your target market is a description of who’s going to buy your services. In this section, try to be as specific as possible. If you define your target market too broadly in the hopes of appealing to more potential clients, you can run the risk of diluting the uniqueness of your services and branding that set you apart from your competitors.

Here are some questions you can ask that will help you hone in on your target market:

  1. Are your target clients primarily male or female?
  2. What’s the range of your services?
  3. How old are your target clients?
  4. Where do they live?
  5. Is geography a factor?
  6. What do your target clients do for a living?
  7. How much money do they make? (This can be an important factor that weighs into your assessment of what the clientele in your area can afford and will determine the prices you set for your services.)
  8. What other aspects of their lives matter? Are they moms, dads, singles, teens or grandparents?
  9. Is the community where you’re locating your spa affluent? Middle class? Blue collar?

Step 4: Location and Licensing

Location is critical to the success of your spa. Consider these factors:

  • Look for a high-traffic area. Busy streets, malls or spaces next to locations people visit often are ideal.
  • Make access easy. If parking is a hassle and traffic is thick on the way to your spa, people might not consider it worth the effort.
  • Locate far from the competition. If you establish your spa directly next to another spa, you'll cancel each other out. Try to find a place where you'll be the only spa for a few miles.
  • Take care of any licensing. While you’re focused on creating your spa business plan, you need to assume that you’ll secure the funds you need to eventually open the doors to your very own clientele. It pays to plan ahead – and think positively! That’s why you need to do some additional paperwork.
    • Obtain a business license. All businesses in the U.S. must be licensed. Check out the Small Business Administration website for more help.
    • Learn employee-licensing rules. In the United States, all of your service providers will require the requisite licensing for their area of expertise. Rules vary by state; so contact your local Division of Occupational and Professional Licensing to find out what their requirements are.
    • Research health inspection regulations. Make sure your spa is sanitary and follows the guidelines laid out by your state.

Step 5: Create a Marketing Plan and an Initial Marketing Budget

Describing how you intend to effectively market your spa is a crucial part of your spa business plan. In fact, the marketing blueprint you develop can help you achieve your business goals.

In this section, outline all the methods and outlets you plan to use to promote your spa – email marketing; your website; social networks like Facebook, Twitter, Pinterest, and Instagram; and directory sites like Yelp and MapQuest. Research whether local newspapers, radio stations or community magazines would effectively promote your services. Assess whether or not to offer membership and loyalty programs.

Choose a spa management software to keep track of your money and growth. You’ll want to implement a software that can help your customers book appointments online through your website or their mobile device, as well as from local directories like Yelp.

Your spa management software should give you all the tools you need to manage your business’s bookings, marketing, POS (point of sale), inventory, eCommerce, customer records, employee schedules, and reporting.

Bottom Line:

If you want to open your own spa it’s essential to define a clear picture of what you want your spa to be, where you want to open and how you plan to fund and market it. Come back next week for the remaining 5 steps you need to get your business plan off the ground!

About the Author

Deb Szajngarten

Deb began her career working on product public relations for large companies like Sony, Canon, and Samsung. She then migrated to the tech start-up world where she helped build Vimeo from a 12-person product to a thriving company. She's now Director of Brand & Reputation at Booker Software, where she's helping to build media visibility and grow their social media program. In her spare time, Deb is an avid yogi & martial artist.

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