Considering the transition from spa worker or independent contractor to independent spa business owner? It should feel exciting, not daunting or impossible! With the proper planning, you can use your skills and passion to open your own spa and make your small business vision a reality.
What You’ll Learn:
- How to build a spa business plan that covers services, pricing, and startup costs
- The essential spa equipment to create a smooth day-one experience
- The spa insurance you’ll need to protect your new business venture from common claims
How to Open a Spa Business
1. Define Your Vision and Brand: Write Your Spa’s Business Plan
A spa business plan helps you map out what your business involves, your primary goals, and how you’ll achieve them. It’s where you outline and keep track of things like:
- Your goals, vision, and mission
- Market research
- Services and products offered
- Marketing and operational strategies
- Start-up costs and other financial information, like loans and banking specifics
- Business performance reviews and adjustments
When you’re just starting out, your business plan can be as simple as one page with:
- A mission statement
- One to three specific, measurable, achievable, relevant, and time-bound (SMART) goals
- One strategy for achieving each goal
- A rough timeline of key events
What is a SMART goal?
- Specific: Clearly defined and detailed
- Measurable: Trackable with numbers or milestones
- Achievable: Realistic given your size and resources
- Relevant: Aligned with your mission and values
- Time-bound: Has a deadline
Define Your Mission and Brand
First, explore your “what” and your “why.” What kind of spa do you want to open? What services do you want to provide?
You also need to know your “who.” Who are your ideal clients, and what problem are you trying to solve? For example, do you want to provide people in high-stress professions a way to ease their stress? Or, would you like to offer comprehensive pampering packages for bridal parties?
The answers to these questions help you identify your unique value proposition (UVP), which is what makes your spa stand out from others. They’ll also help you define your brand identity — it’s all connected! (Just like the body!)
What makes up a brand identity?
Your brand identity is primarily composed of the imagery and messaging you use, your values, and your overall vibe. It can include:
- Logos
- Images
- Taglines
- Mission statement
- Core values
- Story and history
- Voice and tone
- Color schemes and layouts
- Typography (fonts, text size)
Establish Your Business Type and Location
The research and logistic components of your spa’s business plan may be less “fun,” but they’re just as important.
Business Name and Incorporation Type
Business structures, like sole proprietorships, partnerships, or limited liability corporations, are what determine your legal and tax status.
Avoid copyright issues and other headaches by ensuring your business’s name is available (who wants to deal with being the other Sally’s Spa?)
Location
Make sure you have a plan for your space before going too far. Your physical location will impact multiple aspects of your business plan, including your finances, legal and regulatory requirements, and your market assessment.
Market Analysis
Explore where and how you fit in your community, and remember to research potential competitors, not just your ideal clientele. Ask what your competitors do well. What are they missing? What can you do better?
Market analysis and the SWOT method:
When researching how your business will fit into the market, it’s helpful to review your strengths, weaknesses, opportunities, and threats (SWOT).
- Strengths: What are you good at? What do you do better than others?
- Weaknesses: What do you struggle with? What will be a challenge for your business specifically?
- Opportunities: What openings in your market exist, or what needs aren’t being met that you plan to target?
- Threats: What things could negatively impact you and your work, like growing competition, economic downturns, or rising costs of space or equipment?
Financial Details
Financial details, like startup costs and fixed and variable expenses (rent, spa insurance, staffing, supplies), are crucial. You need this information to determine your pricing strategy, your break-even target, and more.
Research and choose what kind of revenue streams you’ll have, like memberships, service packages, or retail products. You’ll also likely need to open a business bank account. With a smart numbers plan, you’ll plant the seeds of your future success.
Services and Operations
Consider your skills, qualifications, and resources when building your service list — will your spa focus on one area, such as massage therapy, or offer a variety of services? How else will you conduct day-to-day operations?
You need a plan for business aspects like:
- Hiring and training staff
- Systems and software for scheduling, client management, and sales (aka point-of-sale or point-of-service (POS) systems
- Ambience, layout, décor, customer flow, and comfort
- Your clients’ journey, from booking to follow-ups
2. Acquire and Set Up Your Spa’s Location, Permits, and Equipment
Before you can officially open your spa, you need to acquire and set up your physical location, your permits, and your equipment.
Evaluate the Location and Building
Before you sign a lease for your spa, assess the space to ensure it meets your structural and operational needs. For example:
- Electrical capacity: Do the power outlets, wiring, and circuit breakers have the capacity to handle the equipment you plan to use?
- Plumbing: Is the building’s plumbing system in good enough condition to provide your spa with the necessary amount of water (including hot water)? Is there a sprinkler system?
- Waste management: Is a proper waste disposal system in place, or could one be easily implemented to ensure your spa meets hygiene and health requirements?
- Ventilation and climate control: Is the heating, ventilation, and air conditioning (HVAC) system capable of providing a well-ventilated and comfortable spa environment?
Get the Right Regulatory Permits and Licenses
Pro tip: Many licenses and permits are tied to your building’s structural systems. If your physical space’s electric, plumbing, or ventilation systems aren’t up to code, it may be extremely difficult and expensive to bring them up to code.
Your spa must also have adequate space for guests and staff to move through it, with the proper storage setups for your tools and supplies. It’ll need to be assessed for an occupancy limit, and pass inspections for things such as:
- Local fire codes
- Health and sanitation standards
- Chemical storage and other safety laws
The legal documents you need before opening depend on your state, county or city, and your business activities. Visit your state’s Board of Cosmetology and Secretary of State websites to find your state’s requirements. Many states require:
- A local business operations license: Needed to operate any commercial business
- Building and zoning permits: To ensure your space is approved for commercial use
- A sellers permit: For employee payroll and tax purposes, and if you collect sales tax
- Health permits: To ensure you have the proper cleanliness, sanitation, and waste disposal protocols, as well as things like proper ventilation systems
- Service-specific permits: Occasionally needed for higher-risk or more advanced services like microdermabrasion, chemical peels, or some massage modalities
Pro tip: Each license and permit typically comes with its own initial fee, inspection fee, re-inspection fee, or renewal fee. Remember to factor these fees into your business plan’s financial section to properly assess your pricing, start-up costs, and break-even numbers.
Get and Install Your Spa Tools and Equipment
Keep relevant license and permit regulations in mind when finalizing your layout and purchasing your spa’s supplies and equipment.
The exact equipment you’ll need depends on safety regulations, the services you offer, and the layout of your location. Most spas typically need:
- Business supplies: Computer, phones, a point-of-sales (POS) system, and other administrative necessities
- Furniture and fixtures: Massage tables, chairs, mirrors, lights, guest lockers, and similar items
- Products and supplies: Linens, slippers, massage oils, wax and wax warmers, and more
- Decor: Reception area items, pillows, artwork, and other items to make the space fit your vision
- Miscellaneous emergency items: Fire extinguishers, first aid kits, AEDs (automated external defibrillators)
3. Regulations and Risk Management: Prepare and Protect Your Spa for Opening Day
The best way to protect your spa business is by getting spa insurance. Liability insurance protects your investments in the event of unexpected claims and lawsuits. It acts as your financial safety net by helping you pay for accidental injuries, damages, and more.
Spa insurance with Beauty and Bodywork Insurance (BBI), for example, covers 250 modalities and includes:
- General liability insurance for injury or property damage done to clients and others, that were caused by your business operations (like trip-and-fall accidents)
- Professional liability insurance for third-party injury or damage claims caused by your business’ professional services, like a client claiming their massage caused them to pull a muscle after they got home
- Personal and advertising injury coverage for non-physical damage claims like libel, slander, false advertising, or copyright infringement
- Products and completed operations coverage for third-party injury or damage claims caused by the products your business uses or the completed services your business has provided
- Fire legal liability coverage (aka damage to premises rented to you coverage) for claims if your business accidentally causes fire damage to a space you rent, but don’t own
BBI also offers optional add-on coverages that are critical for many spa operations, including:
- Tools and supplies coverage (aka inland marine insurance) for help repairing or replacing your movable, non-permanent business essentials in case of theft or damage
- Sexual Abuse & Molestation (SAM) Insurance for claims of sexual misconduct, including instances of misinterpretation and false allegations*
- Workers compensation insurance for your employees if one of your stylists gets sick or injured on the job
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BBI’s spa insurance costs are based on the number of stations you have, unlike many other providers that charge based on your number of employees. Our spa owner policies start at just $31.08 per month or $349 per year for one or two stations.
Our station-based approach also allows you to insure all your employees under one policy — even if the number of employees changes, or the technicians themselves change.
Purchasing spa insurance from industry experts is the best way to get the coverage you need. Insurance isn’t the most exciting part of being a business owner, but it’s a crucial part of opening a spa business and protecting it long-term.
Protect your spa business today, and be ready to open tomorrow!
4. Market Your Spa Business
With a space, a plan, permits, and your spa insurance — it’s time to get the word out! Marketing is a crucial part of opening your own spa business. Potential customers need to know you exist before they can become paying ones.
A few essential marketing strategies to use include:
- Website: Having a strong website is a must! You want an attractive, easy-to-navigate website that customers can find easily
- Email marketing: Start collecting an email list with any inquiries you receive or past customers for a weekly newsletter with promotions, product highlights, or information about your spa
- Social media: Everyone’s online, so meet your clients where they are by building a fun, engaging presence on social platforms like Facebook, Instagram, and TikTok (and link to your website!)
- Word-of-mouth: You started your own salon or spa business — proudly talk to everyone about it! You can also ask your customers to share with their friends and family, too.
5. Launch, Monitor, and Scale: Officially Open Your Spa
When you’re ready to open your own spa business, you may need to focus on promotions, awareness campaigns, and other pre-launch tactics first. Pre-launch strategies include activities such as a soft opening or partnerships with other local businesses.
Keep track of key performance indicators like:
- Average revenue per client
- What it costs to acquire a new client
- Client retention month-to-month
- Occupancy rates
As you continue to learn and grow, use the information you collect to test special offers, other services, and refine processes to ensure all the day-to-day tasks run smoothly.
Starting a spa may feel intimidating at first, but smart and enthusiastic planning now is what makes your business shine later.
Frequently Asked Questions About How to Open a Spa
Do I Need Insurance Before Signing a Spa Lease?
Typically, yes. Most landlords require you to have liability insurance as part of your agreement. Different landlords may have different minimum coverage amounts, but details will depend on the individual landlord.
Even if it’s not explicitly stated in the lease, you should still have spa insurance to protect yourself if you accidentally cause damage to your leased or rented space.
What’s the Difference Between General and Professional Liability for Spas?
General liability covers accidents and property damage claims. Think of it as protection against claims involving your space and operations, like a client slipping on a wet floor or a product spilling and staining a client’s designer bag.
Professional liability covers injury, harm, or perceived harm due to your services. It’s protection against claims related to your skills and services, such as a client stating that your massage aggravated an injury or that you failed to deliver the promised results.
What Insurance Do I Need if I Sell Products?
BBI Spa Owner policies include products and completed operations coverage, which helps protect you if a client claims a product you used caused them harm after the service. It does not cover products that you sell.
If you sell physical products, like skincare or beauty items, you need product liability insurance. This coverage protects you if the items you sell injure a client or damage their property. Get product liability coverage tailored to your spa business from Insurance Canopy.
Are Independent Contractors Covered by My Spa Owners Policy?
Yes, your BBI spa owner policy covers any employee or independent contractor you hire as long as they’re working at one of your covered stations.
