If you dream of operating your own luxury day spa, now may be the perfect time to get started.
While running a successful spa can be challenging, according to Lynne McNees, president of the International Spa Association, the spa industry has the bonus of being (nearly) recession proof.
The reason is simple: When times get tough, the need for stress relief increases.
For millions of people, this means visiting a spa to help them disconnect and recharge their batteries. In fact, during the height of the 2008 recession, the U.S. spa industry recorded more than 160 million visits, an increase of almost 16 percent from the previous year, with total revenues of $12.8 billion. By 2013, the number of annual spa visits had increased to 164 million, with total revenues of $14.7 billion.
What makes these numbers even more impressive is that the spa industry is mainly composed of thousands of individually owned spas. While there are a number of chain spas, none of them hold a dominant position in the industry.
Step 1: Creating a business plan for your spa
Running a spa requires more than just being a skilled practitioner.
You will also need a solid business plan to help you identify your potential costs and create a roadmap that you can follow. Below are some of the key decisions a business plan can help you make.
Determine the services you will offer and the income you need to generate
While there are numerous services you can offer, the International Spa Association considers a business to be a spa as long as it offers at least two of the following services: massage, skin care, or body treatments.
Taking the time to carefully select your service offerings will help you to better differentiate your business from your competitors. For example, you might decide that you only want to specialize in just a few services instead of offering a wide variety. Or you might decide that you want to offer services that are not commonly available at other local spas.
Types of spa services
The services offered at most day spas generally fall into three categories: skin and body care, hair removal, and makeup.
Skin and body care spa services can include:
- Facials and body exfoliation that may involve the use of salt glows, body polish, enzyme peels, and body masks like mud or paraffin
- Massages that include various styles of full body massage, facial massage, and hand or foot massages
- Wraps and packs used to combat cellulite and reduce water retention
- Hydrotherapy treatments, such as whirlpool baths and hot tub treatments
- Body tanning which includes self-tanners and tanning beds
Hair-removal services can include:
- Waxing (face, legs, arms, bikini, back, and underarms)
Makeup services can include:
- Cosmetics application
- Color analysis
- Eyelash and eyebrow tinting
- Eyelash extensions
- Ear piercing
Consider what equipment you need to buy
You will want to assess the cost of the equipment needed to offer a particular service against the potential for profit.
Some services, like hydrotherapy, may require a significant investment, particularly if you need to upgrade your infrastructure (such as installing plumbing lines and running electrical) as well as the cost of the equipment itself.
You may find yourself deciding to limit the initial services you offer until your spa has reached a specific threshold of clients, cash flow, and savings to make the additional investment worthwhile.
Decide on the audience you want to attract
While luxury day spas have traditionally been seen as a service that primarily appeals only to women, a number of successful spas are increasingly designing their services to appeal to men, as well as couples.
Natalie Tessler set her Chicago-based Spa Space in a location surrounded by office buildings. When her research confirmed that male-oriented offerings in the area were few and far between, she began to offer a variety of male-only services.
She began by offering private rooms where men could get their nails groomed, labeling the services under guy-friendly names such as “Sports Pedicure” and “Man Hands Manicure.” The privacy helped to make the men feel much more comfortable and the names made it clear who she was targeting. She then added facials and massages designed for runners and golfers. Her male clients now comprise more than half of her spa’s top clients.
Depending on the location of your spa, you may also want to consider offering services designed to appeal to corporate clients looking for fun ways to hold company events.
Consider your operating hours
According to Beth McGroarty, the Research Director at Spafinder Wellness, many spas today have extended their operating hours.
“They’re opening earlier (7 a.m.) and staying open later (until 10 p.m.) to accommodate everyone’s busy schedules,” she says. The need to provide services to a time-crunched client base has resulted in the rising popularity of express treatments. Lynne McNees also noted that 77 percent of spas now offer treatments that are 30 minutes or less.
Decide on what products you’ll sell
A happy, relaxed customer is more likely to be in the mood to want to buy products that can remind them of their spa experience. That’s why it’s important to offer high-quality products that reinforce the image you are creating for your luxury day spa.
Think about the employees you will want to hire and the training you’ll need to provide
Once you have decided what services you want to offer, you’ll have a better understanding of the people you need to hire to fill those roles.
To remain competitive, you’ll also want to ensure that your staff provides a consistent level of service and stays up-to-date with current techniques. This is where offering a regular training program will help.
Determine what marketing strategies you will to employ
Like any retail business, you will need to employ a variety of tactics to ensure a steady stream of customers, both new and recurring. This can involve things like creating an SEO-friendly website to attract new clients and streamline your booking process, offering monthly or weekly specials, and creating a preferred client email list where you regularly stay in touch with your best customers.
Step 2: Finding a great location
Deciding where you will set up your spa can be one of the most important decisions you make. If you’re considering an area that you’re not familiar with, think about hiring a real estate broker to help. They will have insights into the community as well as emerging trends that you may not be aware of.
Select a place that is easily accessible by car or public transit, offers plenty of parking, and that attracts a ton of foot traffic. The surrounding area should be attractive, well lit, and safe. You’ll want your neighbors to consist of other retail businesses, as opposed to a commercial area like an industrial park, because neighboring retail businesses will attract customers to your business as well. They may also remain open in the evenings and on weekends, whereas office buildings will likely not.
Once you’ve decided on the neighborhood, you’ll also want to be clear about the square footage you’ll need. Remember that you will probably need space for a reception and retail area, salon services (if you’re offering them), treatment rooms, consultation rooms to discuss treatment options and post-treatment care, changing rooms, storage, an employee and client restroom, administrative offices, and an employee break room area.
You might be able to combine some of these functions (such as the restroom also serving as a changing room), but it’s important to be clear about the amount of room you will need to create the atmosphere you want. You might also want to discuss your ideas for a layout with a professional interior designer or architect.
Step 3: Getting financing
There are various ways that you can get the financing you need to open a luxury day spa. As a new business, you may need to raise the capital from family, friends, and personal loans. Once you’ve established your business, you may then be in the position to tap more traditional resources.
The Small Business Administration can be a great way to access the funding you need. Some lenders have programs that provide loans specifically for salons and spas.
These loans provide the capital you need to:
- Buy or upgrade salon equipment
- Purchase beauty supplies
- Even out your cash flow between seasonal peaks in business
- Remodel your salon or spa
- Add new health and beauty services
- Hire staff
- Market and promote your businesses to attract new clients
Step 4: Designing a great user experience
A successful luxury spa is one that pays attention to the details, especially the ones that your customers will notice. This requires paying attention to every touch point your customer will encounter when engaging with your brand, both online and offline. Here are some ideas to get you started.
Select an attractive location for your spa
A spa that is located in a basement or in a dark and unappealing corner of a strip mall will send the wrong signal, one that is completely at odds with what a customer expects of a luxurious experience.
Design a website that is both useful and visually appealing
Your website will likely serve as the first encounter your potential customer has with your spa. That’s why it’s important to make sure that your website sets the right tone, one that is consistent with your physical spa.
This means that you need to invest not just in good photography, great design, and strong copy, but you will also want to make it easy for web visitors to learn about your services and book appointments.
Arrange your merchandising to enhance sales
Offer products that reinforce the elegant image you are creating for your spa. These products will likely have both great scents and wonderful packaging, making them a joy to own and use.
Provide lockers with adequate space
If, for example, your spa is located in a city where your customers will be wearing heavy winter coats for several months out of the year, then it makes sense to make sure that your lockers are large enough to comfortably and securely fit their belongings.
Soundproof your rooms
Customers are less likely to relax and unwind if they can easily hear someone else’s conversation or the sound of people walking up and down a hallway.
Invest in good equipment
Take the time to ensure that your treatment beds are well padded and are at the right height and width to comfortably accommodate your clients.
Set the right mood with adjustable lighting and music
Softly diffused overhead lighting works well at the start or end of a session; however, during a procedure like massage or hydrotherapy, a soft light in a different location can create a soothing atmosphere of relaxation and peace.
To further enhance this effect, set up your treatment rooms with their own sound systems to softly play music in the background.
Step 5: Training and retaining the right staff
No matter how small you start off, a luxury spa is not a business that can be solely operated by one person. It’s a business that by its very nature involves training and overseeing employees that possess a range of skills, experience, and temperaments. This makes it all the more important to implement ongoing staff training to help ensure a consistent experience for your guests.
A strong training program becomes even more important when you consider that the spa industry is also subject to high turnover.
In addition to the actual technicians and therapists that will provide the hands-on services for your guests, you will also likely need someone to help you with a wide variety of administrative tasks such as:
- Booking appointments
- Ordering supplies and talking with salespeople
- Creating and revising work schedules to accommodate employees’ scheduled time off and personal needs
- Tracking receivables and monitoring expenses
- Developing new advertising and marketing strategies, and crafting daily or weekly specials
- Hiring new employees, conducting performance reviews, and mentoring young or inexperienced staff
- Troubleshooting problems between staff members or guests
Use the resources below to find out where you can learn more about how to start a luxury day spa.
International Spa Association
The International Spa Association represents health and wellness facilities and providers in more than 70 countries. Members encompass the entire arena of the spa experience, from resort and hotel, destination, mineral springs, medical, club, and day spas, to service providers such as physicians, wellness instructors, nutritionists, massage therapists, and product suppliers.
Spafinder Wellness is the world’s largest media, marketing, and gifting company for the wellness industry. With nearly 30 years of experience as a spa and wellness authority, the company offers a comprehensive resource for wellness-related products, services, and marketplace insights.
DAYSPA magazine focuses strictly on the needs of the day spa industry. Their readership consists of owners and managers who work in day spas, wellness centers, skincare salons, and destination spas around the world. They provide information on the latest treatment trends and provide insight into the management, marketing, financial, and legal aspects of their businesses, as well as news affecting the industry.