How to open a spa business in 2023: Guide & Actionable checklist

Are you dreaming of starting your own spa business? With the rise of wellness trends, the spa industry is growing rapidly, offering a range of services for people looking to unwind and de-stress. However, starting a spa can be quite challenging in different ways and requires a well-thought-out plan.

That's why we've created this step-by-step guide about how to open a spa business that will help you get started. From identifying your target market to selecting the perfect location and hiring your team, we'll cover all the essential steps you need to perform.

So, let's get started and see what it takes to open a successful spa business in 2023!

1. Make a preparation

Before you rush into action, it's essential to spend some time doing research and making sure you’re going to move in the right direction. A day spa is not just about offering luxurious spa treatments and a relaxing ambiance; you need to tailor your business and meet the needs of your real potential customers.

So, the first steps are to define and analyze your target customers, research the competitive landscape, and formulate your unique selling proposition. 

And here’s how to approach this research:

 Learn about your target audience. Conduct live interviews or surveys and gather information from social media to learn about people living in the target area, their needs, budgets, and preferences. Utilize online tools like Google Trends or Facebook Audience Insights to analyze demographic and behavioral data. 

• Analyze your competition. Research your competitors in the area, both in person and online, to learn about the types of day spa services they offer, their prices, and customer reviews. Search for both good ideas to implement and pitfalls to avoid. 
• Choose your segment. Based on your findings, choose the target segment, which will form the backbone of your spa salon’s clientele. They should be people who are present in your chosen location and whose needs and preferences meet what you want to provide as a spa owner. 
• Formulate your unique selling proposition (USP). To make your future marketing messages effective, formulate your USP that will make your spa not only special but also attractive to the chosen segment. 

Of course, you can always go deeper with your market research, but in most cases, it would be sufficient to start with. 

Stay ahead of the competition from the very first step

Launch your beauty business with confidence — automate orders and inventory and focus on growth

Sign up for free

2. Create a business plan 

You may have heard that a business plan is a lengthy and complicated document. However, in reality, it is simply a tool to help you answer critical questions about your business idea and initial steps. Jotting down your thoughts and ideas in a structured manner can be incredibly useful in gaining a complete understanding of your vision and keeping you on track toward achieving your goals.

Therefore, it is highly advisable to document essential information in the following areas to ensure your business plan is effective and efficient.

1. Company overview. Introduce your spa idea, outlining its name and location, USP, the services you will offer, and the company’s legal structure.
2. Industry analysis. Here, note down your knowledge and investigation results about the current market state in the country and chosen location, major trends, and other relevant data that will influence your business strategy. 
3. Customer analysis. Pinpoint your target customers based on your preliminary research. Focus on their demographics, psychographics, and buying habits.
4. Competitive analysis. Describe your main competitors in the area. Assess their strengths, weaknesses, pricing levels, and services they offer.
5. Marketing plan. Based on all of the above, develop a marketing strategy for your spa business. Consider positioning, promotional tactics, and realistic goals you plan to complete.
6. Operations plan. Detail your spa's daily functions, including your team structure, staffing needs, scheduling, and customer service policies.
7. Financial plan. Project your spa's finances. Include projected income statements and cash flow statements.
8. Executive summary. Summarize your business plan, emphasizing its key points and goals.

Now that you have completed your spa business plan, it's time to move on to the more actionable part, using a solid foundation to build upon. 

3.  Find the best location

The choice of location may significantly impact the success of your spa business. A great location can help increase visibility, and customer flow, while a poor location can limit your customer base and hinder growth. 

When searching for a location for your day spa, consider the following factors:

• Accessibility. Look for a place that is visible and easily accessible to your chosen target audience. Consider factors such as parking, public transportation, and foot traffic.
• Competition. Evaluate the competition in the surrounding area, including other spas, salons, and wellness centers. Look for a location that offers a competitive advantage or is underserved in terms of spa services.
• Zoning and Regulations. Ensure your chosen location is zoned for a spa or wellness center and meets all applicable regulations and licensing requirements.
• Space and Layout. Consider the space and layout of the location, ensuring that it meets your needs in terms of the number of treatment rooms, waiting areas, and storage space.
• Cost. Evaluate the cost of the location, including rent, utilities, and other business expenses. Ensure that it is within your budget and offers a good return on investment.

By considering these factors, you can find the perfect location for your spa that is aligned with your business goals, meets the needs of your target market, and will help you build a successful spa business.

As soon as you finally decide on the location, you may rent it. Try to negotiate the lease terms with the landlord. Make sure to thoroughly review all terms and conditions of the lease agreement and seek legal advice, if necessary, before signing. 

4. Register your spa business

Registration may be done simultaneously with choosing a location or right after it. In the second case, ensure everything is ready for the registration process. Your company can operate right after it is registered with the Secretary of State.

But let us move step by step. At this step, you've probably already chosen the legal structure that suits your needs best, whether it's a sole proprietorship, limited liability company (LLC), or partnership. Now, it's time to register your company legally.

While you can handle the registration process on your own, it's recommended that you seek legal counsel if you're starting a business with partners. A lawyer can help ensure that all the necessary documents are prepared to protect your rights and assets. Once you have all the information ready, such as your company's name, legal structure, brand name, and bylaws (if applicable), you can begin the registration process.

It's important to look through your local Small Business Administration's official site for guidance and information about the registration process for spa businesses in your area, including the rules and requirements. 

The legal registration process for a spa business involves several steps:

• registering with the Secretary of State
• obtaining an Employer Identification Number (EIN) from the IRS
• obtaining professional permits and licenses (if applicable)
• obtaining a general business license and zoning permit (if applicable)
• obtaining a sales tax number (in case you are going to sell any products to your clients).

By following these steps, you'll be on your way to legal registration of your spa business and embarking on your entrepreneurial journey. Remember to take your time and seek guidance when necessary to ensure that your spa business is off to a successful start.

 5. Open a business bank account

You've crafted a solid business plan, registered your business, and secured the perfect location for your spa salon. Now it's time to open a bank account to manage your finances. You’ll need a reputable bank with low-interest rates and attractive personal loan options if you need one.

You'll need to provide them with essential documents, such as your ID, business registration documents, and proof of address. Sometimes they may also ask you about your business plan and permits. 

With your account set up, make sure to keep your finances organized. You may use special software or simply note your income and expenses. In either case, remember to look through the basics of bookkeeping and find an accountant that will help you fill in your returns correctly and in-time. 

6. Obtain insurance to avoid liabilities

You’re on your way to becoming a proud day spa business owner and building a sanctuary for your clients to relax and rejuvenate. But even in such a peaceful environment, unforeseen incidents may occur. That's why it's essential to have insurance coverage to safeguard your business from potential liabilities.

To protect your company, consider these types of insurance that are relevant for spa businesses:

• General liability insurance. This insurance covers bodily injury, property damage, and advertising injury claims.
• Professional liability insurance. Also known as errors and omissions (E&O) insurance, it covers claims related to professional negligence, errors, or mistakes made by you or your staff.
• Property insurance. This insurance covers damage or loss of your spa's property, such as your spa equipment, supplies, and furnishings, due to events such as fire, theft, or vandalism.
• Workers' compensation insurance. If you have employees, workers' compensation insurance is mandatory in most states and covers medical expenses and lost wages if an employee is injured on the job.

Insurance coverage provides peace of mind and protects your spa from unexpected financial setbacks. To determine the best coverage for your unique situation, speak with an insurance agent who can guide you through the available options and help you make an informed decision.

7. Establish inventory management software

Effective inventory management is crucial for a spa business in order to avoid the risk of shortages, expired products, and lost revenue. 

Moreover, having reliable inventory management software in place can improve your spa business in several ways:

• Increased efficiency. By streamlining and automating routine tasks such as ordering, tracking, and managing inventory, you can save time and resources that can be directed toward providing excellent customer service.
• Reduced costs. Effective inventory management can help reduce costs associated with overstocking, expired products, and manual ordering. By using a software system that provides real-time inventory tracking, you can optimize your purchasing decisions and reduce unnecessary business expenses.
• Optimized budgets. By improving purchasing decisions and reducing unnecessary expenses, you can optimize your budget and maximize profits.
• Enhanced customer satisfaction. With a well-managed inventory system in place, you can ensure that you always have the necessary products on hand to meet your customers' needs, improving their satisfaction and loyalty to your business.

Suplery inventory management software is designed specifically for beauty businesses to enable the following: 

• Tracking inventory in real-time.
• Eliminating product shortages and excess stock.
• Receiving timely notifications about your inventory status.
• Ordering products from top beauty brands and suppliers on the Suplery platform.
• Automating orders based on your usage history, existing stock, and safety stock levels.
• Getting valuable insights about your product usage and ordering.

With Suplery, purchasing spa and beauty products and managing your inventory becomes effortless, and gives you more time to focus on what you do best — providing excellent spa services and managing your business. 

Unlock the full potential of Suplery innovations

Discover how Suplery's suite of expert tools and solutions can take your beauty business to the next level — explore now and see for yourself

Explore now

8. Hire and train the team

Now that you have your business registration, location, papers, and software in place, the next step is to hire and train your day spa salon employees. 

And here are the exact steps to perform: 

• Define job roles and responsibilities. Create a detailed job description for each position you want to fill, including the required qualifications and responsibilities. This will help you find the right candidates for the job.
• Advertise job openings. Post job openings on job boards, social media, and your website to attract a pool of candidates. You can also contact local beauty schools and training programs to find potential candidates.
• Screen resumes and conduct interviews. Review resumes and conduct phone, online, or in-person interviews to determine the best fit for the role. Ask relevant questions to assess the candidate's technical skills and experience, as well as their interpersonal skills and fit with your business.
• Conduct background checks. Once you have identified suitable candidates, perform background checks to verify their work history, education, and criminal record.
• Offer employment and negotiate compensation. Offer employment to the most suitable candidate and negotiate compensation, including salary, benefits, and time off.
• Train new employees. Provide comprehensive training to new employees, covering technical skills, customer service, and your business's policies and procedures. This will ensure that they are equipped to provide quality service to your clients.
• Provide ongoing training and support. Offer ongoing training and professional development opportunities to keep your employees up-to-date with the latest industry trends and techniques. This will help them stay motivated and engaged in their work.

Congratulations on getting your own spa business up and running! Now you are ready to open your salon and welcome your first clients.

Spa opening checklist

This has been an extensive guide, quite long to read. To make it convenient and actionable, we have created this short, convenient spa opening checklist that you can print and use:  

• Idea chek-up
  • formulate idea
  • make demand overview
  • make competition overview
  • formulate a unique selling proposition (USP)
• Create business plan
  • company overview
  • industry analysis
  • customer analysis
  • competitive analysis
  • marketing plan
  • operations plan
  • financial plan
  • executive summary
• Find location
• Register you business
  • make preparation
  • register with the Secretary of State
  • register for employer identification number (EIN)
  • get a general business license
  • get local licenses and permits
  • open bank account
• Get insurance
• Set up software
• CRM system
  • inventory management software
  • accounting software
  • HR and salary software
• Hire the team
  • define job roles and responsibilities
  • post open positions ads
  • analyze resumes and do interviews
  • make offers
  • instruct and train staff
• Start operating