Spa Business Plan Template & Example

Spa Business Plan

Whether you’re starting a new spa or growing your existing day spa, a comprehensive business plan is essential for a successful spa.

Writing a business plan for a spa is crucial as it outlines your spa’s goals, strategies, and financial projections, helping to attract potential investors, guide decision-making, and ensure long-term success in the competitive spa industry.

You can download the Spa business plan (including a full, customizable financial model) to your computer here <–

 

Sample Spa Business Plan Template

The spa business plan example below highlights the essential components required for crafting a thorough plan. It can be adapted to develop a business plan for various spa types, such as day spas, resort spas, medical spas, wellness spas, and luxury spas.

 

I. Executive Summary

Business Overview

[Spa Name], located at [insert location here], is a brand-new, luxury day spa focusing on providing high-quality, full-service beauty care to the surrounding community. Our spa services and product lines fit nicely with the prevailing tastes and preferences of the local area – middle-class suburbanites want quality beauty care but don’t want to pay luxury prices for it.

 

Products and Services

[Spa Name]will provide spa services for all ages and genders. Services will include massage therapy, skin and body treatments, and hair removal (waxing and threading). All manner of special treatments will be available, including specialty massages and facial treatments.

In addition to providing these day spa services, [Spa name] will be a retailer of exclusive beauty care products. Customers will find products at [Spa name] that they won’t find in grocery stores.

 

Customer Focus

[Spa Name] will primarily serve the residents within a 5-mile radius of our location. The demographics of these customers are as follows:

• 27,827 residents
• Average income of $74,700
• 58.9% married
• 49.6% in Management/Professional occupations
• Median age: 38 years

Besides catering to the primary adult demographic for an upscale day spa, the area also includes two large high schools and four middle schools. Students, especially girls, from these schools are likely to visit [Spa Name] for special events and occasions.

 

Management Team

[Spa Name] is led by [Founder], who has been in the beauty care business for 20 years. While [Founder] has never run a day spa himself, she has been a masseuse since age 15 and spent most of her adult life working as a masseuse at spas and salons. As such, [Founder] has an in-depth knowledge of the day spa business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

 

Success Factors

[Spa Name] is uniquely qualified to succeed due to the following reasons:

• The spa will fill a specific market niche in the growing community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.
• Our location is in a high-volume area with easy access from multiple residential and commercial district zones.
• The management team has a track record of success in the salon and spa business.
• The upscale day spa business is a proven business and has succeeded in communities throughout the United States.
• Local competitors leave a gap in the day spa market. There are low-cost providers ($30-50 for a facial) and an ultra-luxury beauty salon ($120+), but nothing in between.

 

Financial Highlights

[Spa Name] is currently seeking $260,000 to launch. Specifically, these funds will be used as follows:

• Spa design/build: $140,000
• Working capital: $120,000 to pay for Marketing, salaries, and lease costs until [Spa Name] reaches break-even

Top-line projections over the next five years are as follows:

Financial Summary	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	$400,000	$466,067	$524,563	$590,400	$664,500
Total Expenses	$345,594	$385,172	$419,434	$475,894	$507,480
EBITDA	$54,406	$80,895	$105,129	$114,506	$157,020
Depreciation	$20,840	$20,840	$20,840	$20,840	$20,840
EBIT	$33,566	$60,055	$84,289	$93,666	$136,180
Interest	$16,822	$14,719	$12,617	$10,514	$8,411
Pre-Tax Income	$16,744	$45,336	$71,673	$83,153	$127,769
Income Tax Expense	$0	$0	$17,104	$29,103	$44,719
Net Income	$16,744	$45,336	$54,569	$54,049	$83,050
Net Profit Margin	-	10%	10%	9%	12%

II. Company Overview

You can download the Spa business plan (including a full, customizable financial model) to your computer here <–

Who is [Spa Name]?

[Spa Name], located at [insert location here], is a new, upscale day spa focusing on providing professional beauty treatments and day spa services in an enjoyable environment. It will showcase a well-designed interior as well as a full-featured waiting area equipped with television screens and at-request refreshments. [Spa Name] also sells a variety of premium beauty products, which will be on display in the waiting room.

[Spa Name] was founded by [Founder’s Name]. [Founder’s Name] has been a licensed massage therapist for some time, but it was in [month, year] that she decided to launch [Spa Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] frequented a day spa that enjoyed tremendous success. After discussing the business at length with the owner of the spa, [Founder’s Name] clearly understood that a similar business would enjoy significant success in her hometown.

Specifically, the customer demographics and competitive situations in the Fort Lauderdale location and his hometown were so similar that he knew the business would work. After surveying the local population, [Founder’s name] went ahead and founded [Spa name].

 

[Spa Name]’s History

Upon returning from Fort Lauderdale, surveying the local customer base and finding a potential retail location, [Founder’s Name] incorporated [Spa Name] as an S-Corporation on [date of incorporation].

The business is currently being run out of [Founder]’s home office, but once the lease on [Spa Name]’s retail location is finalized, all operations will be run from there.

Since its incorporation, the spa has achieved the following milestones:

• Found office space and signed a Letter of Intent to lease it
• Developed the spa’s name, logo, and website located at [website]
• Hired an interior designer for the decor and furniture layout
• Determined equipment and fixture requirements
• Begun recruiting key employees with previous beauty experience

 

[Spa Name]’s Products & Services

Below are [Spa Name]’s initial services offered and in-store products sold.

Spa treatments performed for both men and women include:

1. Facial and skin treatments (i.e., hydrating facial, anti-aging facial, and acne treatment facial)
2. Body treatments (i.e., body scrubs, body wraps, and detoxifying treatments)
3. Massage therapy (i.e., full-body, neck and shoulder, and foot massages)
4. Hair removal (i.e., waxing and threading)

Each appointment, if desired, will include an initial beauty assessment and suggestion phase, where the specialist will discuss the customer’s beauty. There will then be a cleansing skin wash with our in-store products, followed by the desired spa services for the face or skin.

[Spa Name] will feature premium beauty products in-store from these well-established brands. It will continue to update its offering to provide the newest products in the beauty industry.

Some of its featured brands will include:

• Aveda
• Great skin
• Repêchage
• Spa Concepts

Furthermore, the waiting area will have television screens and popular publications to make the wait for spa services more pleasurable. Toys and board games will also be on hand for waiting children, as well as at-request refreshments, which we will provide for free during the waiting period.

 

Spa Design

[Spa Name] will develop a 2,500-square-foot store whose key elements will include the following:

• Treatment rooms
• Reception Desk
• Self-service coffee area
• Sinks
• A waiting area with TV screens
• Restrooms

The retail location has 10 dedicated parking spots, which should suffice even in peak hours.

[Spa Name] plans to be open 7 days a week, from 10 AM to 6 PM. As demand dictates, we may extend or reduce our hours.

 

III. Industry Analysis

[Spa Name] competes against small, individually owned salons, spas, and massage parlors and major regional and national chains. There are over 450,000 registered beauty or spa salons in the United States.

Based on market research data, the spa and salon industry is a fragmented one, as the 50 largest companies only hold 15% of the market. The market is estimated to grow to more than $35 billion in three years. This bodes well for [Spa Name]; since there are no truly dominant competitors, barriers to entry are not as high as many other industries, and a start-up can expect to have success in this growing market. There is plenty of room in the industry, particularly for well-placed local day spas that cater to specific geographic and demographic customer niches. Smaller spas can easily develop loyal clienteles that enable them to compete and succeed against industry giants; in this industry, size does not necessarily mean an advantage, which bodes well for [Spa Name].

 

Market Trends

The market in which [Spa Name] will compete is experiencing several different trends.

• Steady growth. This market is expected to grow consistently at around 2% annually.
• Success drivers. Customer satisfaction is what ultimately makes one spa triumph while another fails. The experience a spa’s client has determines whether or not they return and whether or not they refer others to the same spa.
• Economies of scale. Larger spas are finding opportunities to succeed by making effective use of support personnel. Receptionists, washers, and assistants at larger establishments can take care of many of the menial tasks that skilled masseuses and cosmetologists have to handle in small day spas. This permits a skilled masseuse or cosmetologist to spend a higher proportion of their time performing skilled services.
• Premium independent day spas. Independent day spas also compete in the premium segment of the market. These firms develop loyal customer bases and select their location on the basis of population demographics.
• Specialty spa salons. Presently, a niche is being carved out for spas that cater to very specific customer segments, such as those who desire gemstone treatments and dermatologist brands.
• Intense customer loyalty. Many spas develop repeat customers who become a regular client base and represent a significant portion of their revenues. Spas whose employees can develop strong relationships with customers can expect to see more long-term success.

• Changing gender patterns. Traditionally, women bring in the lion’s share of revenues for spas, using beauty services more often and spending more at each appointment. In recent years, however, the male consumer’s attitude has begun to shift. Men now make up approximately 25% of spa clientele.
• Gender preferences. Women are the most lucrative customers for spas, visiting more often and purchasing more special treatments.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Spa Name] will serve the residents of [Spa location] and the immediately surrounding areas, as well as those who work in [Spa location].

The area we serve is populated mostly by the middle class; as a result, they have the means to pay for higher quality service and are looking for spa services somewhere between the deep discounters and the top-end luxury brands.

The precise demographics of the town in which our retail location resides are as follows:

	Wilmette	Winnetka
Total Population	26,097	10,725
Square Miles	6.89	3.96
Population Density	3,789.20	2,710.80
Population Male	48.04%	48.84%
Population Female	51.96%	51.16%
Target Population by Age Group
Age 18-24	3.68%	3.52%
Age 25-34	5.22%	4.50%
Age 35-44	13.80%	13.91%
Age 45-54	18.09%	18.22%
Target Population by Income
Income $50,000 to $74,999	11.16%	6.00%
Income $75,000 to $99,999	10.91%	4.41%
Income $100,000 to $124,999	9.07%	6.40%
Income $125,000 to $149,999	9.95%	8.02%
Income $150,000 to $199,999	12.20%	11.11%
Income $200,000 and Over	32.48%	54.99%

Customer Segmentation

The spa will primarily target the following three customer segments:

1. Soccer/stay-at-home moms: The town has a large population of stay-at-home moms who are active in the school and community. These moms seek spa services regularly. Winning the loyalty of a mother often includes winning the business of her children and husband as well. These women are well-connected to each other and, as such, are a prime source of referral business. [Spa name] expects to regularly acquire new customers from referrals.

2. Professionals: [Spa name] is located along a well-traveled commute route. By offering a convenient location and exceptional customer service, [Spa name] will draw in working men and women who need to look professional for work.

3. Students: There are multiple high schools and middle schools located in the surrounding area. These students still live on their parents’ income and can, therefore, afford to pay for higher-quality spa services than discounters provide. In particular, [Spa name] can expect to generate significant seasonal business based on the beauty needs of the local youth culture.

 

V. Competitive Analysis

Direct and Indirect Competitors

The following retailers are located within a 5-mile radius of [Spa Name], thus providing either direct or indirect competition for customers:

Joe’s Beauty Salon

Joe’s Beauty Salon is the town’s most popular beauty salon and has been in business for 32 years. Joe’s offers a wide array of services that you would expect from a beauty salon.

Joe’s offers facial treatments, manicures and pedicures, and haircuts and styling. Over 60% of Joe’s revenue comes from services targeted at women outside of hair services. In addition, Joe’s does not offer its customers premium salon products.

For example, they only offer 2 types of skin cleansers and 4 types of moisturizing creams. This puts Joe’s in direct competition with the local pharmacy and grocery stores that also carry these mainstream products. [Spa Name], on the other hand, offers numerous options for exclusive products that are not yet available in [Town’s Name].

Lux Facial

Lux Facial has been in business for 5 years and offers extremely high-end facial treatments, with introductory prices of $120 per facial.

However, Lux Facial will primarily be targeting a different customer segment from [Spa Name], focusing on the households with an income in the top 10% of the city.

Furthermore, [Spa Name] offers many of the services and products that Lux Facial offers, but at a fraction of the price, such as:

• Facial cleaning
• Facial masks
• Intensive skin and anti-aging treatments
• Premium beauty care products from industry leaders

Freddie’s Fast Day Spa

Freddie’s Fast Day Spa is located four stores down the road from [Spa Name]. Freddy’s has been in business for the past three years and enjoys great success, primarily due to its prime location.

Freddy’s business offers inexpensive facial treatments and neck massages and focuses on volume over quality. It also has a large customer base, with a large percentage being teens between 13 and 18 years of age.

[Spa Name] has several advantages over Freddy’s Fast Day Spa, including:

• An entertainment-focused waiting room, with TV’s and board games to make the wait for service more pleasurable for children waiting for their mothers.

• A focus on service quality rather than speed alone to ensure repeat visits. [Spa Name] will spend, on average, 20 more minutes with its clients than Freddy’s.

While we expect that Freddy’s Fast Day Spa will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent [Spa Name] based on the high-quality service it provides.

 

Competitive Pricing

	Joe's	LUX	Freddy's
Pedicures	$30-$40	$40-$50	$60-$70
Facials	$60-$70	$70-$80	$80-$90
Manicures	$20-$25	$30-$35	$40-$45
Massage	$65-$75	$80-$90	$85-$90

Competitive Advantage

[Spa Name] enjoys several advantages over its competitors. These advantages include:

• Location: [Spa Name]’s location is near the center of town, giving us access to commuters going to and leaving the train station, local office workers, and passersby shopping in the city. We also offer adequate parking, making it easy for customers to patronize us.

• Great service at an affordable price: The beauty care services offered by [Spa Name] are of similar quality to its most premium positioned competitor, Lux Facial. [Spa Name] will offer these services at a much more affordable price.

• Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.

• Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders, newspapers, and other influences. As such, it will be relatively easy for [Spa Name] to build brand awareness and an initial customer base.

 

VI. Marketing Plan

You can download the Spa business plan (including a full, customizable financial model) to your computer here <–

[Spa name] seeks to position itself as a respectable, upper-middle-market competitor in the spa market. Customers can expect to receive professional beauty care from skilled cosmetologists and masseuses for a price somewhere between discount chains and luxury establishments.

 

The [Spa Name] Brand

The [Spa Name] brand will focus on the spa’s unique value proposition:

• Convenient location
• Familiar, regular specialists
• Significant personal attention
• Moderate price point
• Comfortable, customer-focused environment

 

Promotions Strategy

[Spa Name] expects its target market to be individuals working and/or living within a 5-mile radius of its location. [Spa Name]’s promotions strategy to reach these individuals includes:

Local Publications

[Spa name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, school publications, youth sports programs, and similar channels will be a major promotion effort.

Community Events/Organizations

[Spa Name] will promote itself by distributing marketing materials and participating in local community events, such as school fairs, local festivals, homeowner associations, or sporting events. Since mothers are often heavily involved in such things, we will not only reach the lucrative audience of adult women but also potentially their families by extension.

Customer Loyalty Program

[Spa name] will create a program to keep its best clients coming back again and again. Long-term customers can participate in the loyalty program to earn points toward future services. Referrals will be rewarded as well.

Direct Mail

[Spa Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Spa Name], offer discounts, and/or provide other inducements for people to visit the spa.

Digital Marketing strategies

[Spa Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more. Additionally, it will utilize social media marketing on Instagram and Facebook to showcase spa services and promotions. By engaging with customers online and using targeted ads, [Spa Name] aims to enhance its digital presence, attract new clients, and encourage repeat business through exclusive online promotions and collaborations with local influencers.

Pre-Opening Events

Before opening the store, [Spa Name] will organize pre-opening events designed for prospective customers, local merchants, and press contacts. These events will create buzz and awareness for [Spa Name] in the area.

 

Pricing Strategy

[Spa Name]’s pricing will be moderate, so customers feel they receive great value when patronizing the spa. The anticipated price point for a standard facial treatment is $80, in exchange for which a customer can expect to receive personalized attention during and after their visit. The customer can expect to receive quality beauty care for a more affordable price than what they pay at an ultra-premium salon or spa.

 

VII. Operations Plan

Functional Roles

[Spa name] will carry out its day-to-day operations primarily on an appointment basis. Walk-in clients will be served by the earliest available specialist, but priority will be given to clients who called ahead. In the meantime, waiting customers can entertain themselves in the lounge, which features television and current popular magazines.

To execute [Spa Name]’s business model, the spa needs to perform several functions. The majority of employees will assist in upselling customers in addition to the primary functions as cosmetologists and masseuses. [Company name] anticipates using the services of X employees, divided into the following roles.

Service Functions

• Facial and body treatments
• Massage therapy
• Hair removal

Administrative Functions

• General & administrative functions including legal, marketing, bookkeeping, etc.
• Sourcing and storing products
• Hiring and training staff
• Appointment making
• Customer service/cash register functions

Miscellaneous

• Maintenance personnel

 

Milestones

The following are a series of steps that lead to our vision of a successful spa. [Spa Name] expects to achieve the following milestones in the following [xyz] months:

Date	Milestone
[Date 1]	Finalize lease agreement
[Date 2]	Design and build out [Company Name]
[Date 3]	Hire and train initial staff
[Date 4]	Kickoff of promotional campaign
[Date 5]	Launch [Company Name]
[Date 6]	Reach break-even

 

VIII. Management Team

Management Team Members

[Spa Name] is led by [Founder’s Name], who has been in the beauty salon and spa business for 20 years.

While [Founder] has never run a day spa herself, she has extensive experience providing massages and working in major spas for the past 20 years. He began his career in [19xx] when she received a certification from [Massage School] and began work at [major chain], where she worked for X years.

[Founder] graduated from the University of ABC, where she majored in Communications.

[Other person’s name] will serve as the customer service manager. [He/she] has extensive experience in the hospitality industry.

The [Founder] will serve as the store manager. To launch our spa, we need to hire the following personnel:

• Cosmetologists (3 to start)
• Masseuses (2 to start)
• Assistants (1 to start)
• Receptionist (2 to start)

As dictated by demand and operational maturity, [Founder] will consider hiring the following personnel:

• Receptionists [Number]
• Assistant Spa Manager

 

IX. Financial Plan

You can download the Spa business plan (including a full, customizable financial model) to your computer here <–

Revenue and Cost Drivers

[Spa Name]’s revenues will come primarily from the services rendered and secondarily from the sale of beauty care products.

As with most services, labor expenses are the key cost drivers for spas. Specialists are paid through a combination of salaries and commission, rewarding them for performance and making specialists an active part in business retention and development.

The major cost drivers for the spa’s operation will consist of:

• Commission paid to specialists on a per-service basis
• Salaries
• Lease

Moreover, ongoing marketing expenditures and cost of goods sold expenses are also notable cost drivers for [Spa Name].

 

Capital Requirements and Use of Funds

[Spa Name] is seeking a total funding of $265,000 of debt capital to launch its store. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital.

Specifically, these funds will be used as follows:

• Store design/build: $135,000
• Working capital: $130,000 to pay for marketing, salaries, and lease costs until [Spa Name] is cash-flow positive

 

Key Assumptions & Forecasts

The following table reflects the key revenue and cost assumptions made in the financial model.

Number of customers per day	Per location
Year 1	26
Year 2	29
Year 3	32
Year 4	36
Year 5	41
Pedicure	$35
Facial	$60
Massage	$80
Product Sales	$20
Annual Rent	$90,000

Financial Statements

5 Year Annual Income Statement

		Year 1	Year 2	Year 3	Year 4	Year 5
Revenues
	Product/Service A	$151,200	$333,396	$367,569	$405,245	$446,783
	Product/Service B	$100,800	$222,264	$245,046	$270,163	$297,855
	Total Revenues	$252,000	$555,660	$612,615	$675,408	$744,638
Expenses & Costs
	Cost of goods sold	$57,960	$122,245	$122,523	$128,328	$134,035
	Lease	$60,000	$61,500	$63,038	$64,613	$66,229
	Marketing	$20,000	$25,000	$25,000	$25,000	$25,000
	Salaries	$133,890	$204,030	$224,943	$236,190	$248,000
	Other Expenses	$3,500	$4,000	$4,500	$5,000	$5,500
	Total Expenses & Costs	$271,850	$412,775	$435,504	$454,131	$473,263
EBITDA		($19,850)	$142,885	$177,112	$221,277	$271,374
	Depreciation	$36,960	$36,960	$36,960	$36,960	$36,960
EBIT		($56,810)	$105,925	$140,152	$184,317	$234,414
	Interest	$23,621	$20,668	$17,716	$14,763	$11,810
PRE-TAX INCOME		($80,431)	$85,257	$122,436	$169,554	$222,604
	Net Operating Loss	($80,431)	($80,431)	$0	$0	$0
	Income Tax Expense	$0	$1,689	$42,853	$59,344	$77,911
NET INCOME		($80,431)	$83,568	$79,583	$110,210	$144,693
Net Profit Margin (%)		-	15.00%	13.00%	16.30%	19.40%

 
5 Year Annual Balance Sheet

		Year 1	Year 2	Year 3	Year 4	Year 5
ASSETS
	Cash	$16,710	$90,188	$158,957	$258,570	$392,389
	Accounts receivable	$0	$0	$0	$0	$0
	Inventory	$21,000	$23,153	$25,526	$28,142	$31,027
	Total Current Assets	$37,710	$113,340	$184,482	$286,712	$423,416
	Fixed assets	$246,450	$246,450	$246,450	$246,450	$246,450
	Depreciation	$36,960	$73,920	$110,880	$147,840	$184,800
	Net fixed assets	$209,490	$172,530	$135,570	$98,610	$61,650
TOTAL ASSETS		$247,200	$285,870	$320,052	$385,322	$485,066
LIABILITIES & EQUITY
	Debt	$317,971	$272,546	$227,122	$181,698	$136,273
	Accounts payable	$9,660	$10,187	$10,210	$10,694	$11,170
	Total Liabilities	$327,631	$282,733	$237,332	$192,391	$147,443
	Share Capital	$0	$0	$0	$0	$0
	Retained earnings	($80,431)	$3,137	$82,720	$192,930	$337,623
	Total Equity	($80,431)	$3,137	$82,720	$192,930	$337,623
TOTAL LIABILITIES & EQUITY		$247,200	$285,870	$320,052	$385,322	$485,066

 
5 Year Annual Cash Flow Statement

	Year 1	Year 2	Year 3	Year 4	Year 5
CASH FLOW FROM OPERATIONS
Net Income (Loss)	($80,431)	$83,568	$79,583	$110,210	$144,693
Change in working capital	($11,340)	($1,625)	($2,350)	($2,133)	($2,409)
Depreciation	$36,960	$36,960	$36,960	$36,960	$36,960
Net Cash Flow from Operations	($54,811)	$118,902	$114,193	$145,037	$179,244
CASH FLOW FROM INVESTMENTS
Investment	($246,450)	$0	$0	$0	$0
Net Cash Flow from Investments	($246,450)	$0	$0	$0	$0
CASH FLOW FROM FINANCING
Cash from equity	$0	$0	$0	$0	$0
Cash from debt	$317,971	($45,424)	($45,424)	($45,424)	($45,424)
Net Cash Flow from Financing	$317,971	($45,424)	($45,424)	($45,424)	($45,424)
SUMMARY
Net Cash Flow	$16,710	$73,478	$68,769	$99,613	$133,819
Cash at Beginning of Period	$0	$16,710	$90,188	$158,957	$258,570
Cash at End of Period	$16,710	$90,188	$158,957	$258,570	$392,389