How To Start A Day Spa Business

by

Does Location Matter For A Day Spa? How Do You Choose A Good Location?

Location is a major factor for a day spa. Look for a location with high drive by and walk by traffic and lots of free parking.

How Much Money Do You Need To Start A Day Spa?

This depends on the services you want to offer and the size of operation. Will you do nails? Acrylic? Gel? Tips ? Pedicures? Will you do extra pedology services (requires special equipment)? Will you do body wraps (need a shower)? Will you offer makeup? Hair (need sinks and hydraulic chairs)? Laser hair removal?

The costs could be $2,000-15,000 per treatment room plus another $10,000-$20,000 for general environment and remodeling which would include signage, stationery, and similar expenses.

When you start this business, give yourself at least 6-12 months runway before your business can break even financially.

What Are The Licenses And Permits Needed?

The licenses and permits depend on the state and city in which your business is located. A retail business license will be required. Some states will require registration of massage therapists, makeup artists, hair dressers.

What Are The Biggest Costs?

The biggest costs will include rent, labor, supplies and marketing.

How Do You Get Clients?

A new spa in today’s marketplace will want to use social media to create awareness and interest. But that alone will not be sufficient. There will be a need to deploy other marketing communications to attract customers. Some examples of such a marketing strategy is radio advertising, direct mail (postcards or coupon books) and outdoor signage. Word of mouth referrals will be key. A new spa might consider a referral program where clients are rewarded when they refer someone.

Here is our tutorial on how to market a local business since a day spa is a local business.

How Many Hours Do You Work Per Week As The Founder?

Usually the proprietor is also working in the business as an esthetician or massage therapist. Long hours are the norm for new business owners. Ten to twelve hour days are very common. However, massage therapists and others who require physical strength to perform their craft must take care to get enough rest so as to ensure they are strong and healthy at all times.

How many employees do you need? And how to make them reliable?

This will depend on the size of the operation. Often, spas pay staff on straight commission which means if there are no clients, there is no pay. And, if the worker doesn’t show up to deliver the service, of course they will not get paid.

You can also pay workers the equivalent of minimum wage for all hours during which they were in the spa, plus commission on top of the regular pay. That feels much more fair. However, this does not necessarily mean that it will endear them to you, ensured better customer service, or make them more reliable.

There are several key employee performance indicators. The first is that there is an optimum time allocation for every service, and workers must stay within it to optimize both revenues and profits. The other way to monitor employee quality is by the number of repeat visits by their customers. The more often that the customer visits the spa the greater their value both in dollars and in potential referrals the employee who services them brings.

Additionally, customer feedback is invaluable.

All of these metrics should be tracked. With the exception of customer feedback, these metrics can be tracked in your scheduling or billing system. Customer feedback will need to be actively solicited by asking your clients. They must feel safe and valued when providing their feedback. They may not want the worker to know that they are less than completely satisfied.

There are several ways to collect customer feedback. You can collect customer feedback by phone, email or SMS.

How To Manage Inventory?

Today, most bookkeeping systems and accounting software has an inventory module built in. When inventory is received it will need to be checked and logged. Then, as each sale is made, the inventory will be adjusted by the software. Just be sure to set the alerts within the system so you know when to reorder.

What Are The Product Margins? What Is The Most Profitable Thing You Do?

Product margins are typically 100% mark-up (double the wholesale price).
The most profitable service is hair removal (waxing). It isn’t the easiest service to deliver, but it is the most lucrative one.

Do You Feel That This Is A Good Business To Get Into?

People get into this business because they have a vision of a sanctuary where soothing, comforting services would be delivered with love, in a tranquil environment.

In Anne’s case, since she is not an esthetician herself and I was busy running another business, she was not in the spa all day every day. She found that the workers did not appreciate her vision and often did not get onboard despite her daily visit and inspirational talks.

The workers complained to the clients that they were not busy enough, that Anne did not spend enough on advertising. That was not a very tranquil experience for the clients. In the end, for Anne, it was not a good business to get into.

This is a good business who already has an established clientele, and well developed aesthetician skills.

When you start this kind of a business, have a good business plan, and know what to expect. Also, get mentors who have successfully built this kind of a business in the past.

Learn to read your own financial statements and monitor everything in your business. And, when something is not working, course correct immediately. Do not keep doing something that is not working.

What Is The Ideal Client Like?

Women age 40 and over, with disposable income, who are willing to spend money on themselves. They will likely be professional women. They will have stress and tension in their lives and need both the respite from their daily lives, and the pick me up of beautification services.

by