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Spa Business Plan for Starting Your Own Spa Salon
With people getting more and more sensitive and careful about health, Spas are becoming a lucrative business and can help you earn quite a bit of money. If you have a solid spa marketing plan, you can make serious money in this spa business plan. We are presenting this spa and salon business plan to help you start such a business of your own.
Spas have become something much more than just some beauty parlors with steam baths. If you want to know how to how to start a spa business plan pdf, you will need to know everything from Himalayan salt baths to Thai massage.
Let’s now see what the experts of professional business planning say about this business.
Executive Summary
2.1 The Business
Sarah’s Spa will be a registered and licensed spa in Miami, Florida. It will provide all the modern alternative therapy services. Just like any massage therapy business plan, this spa business plan needs to be discreet about all the details of the business. That’s why we are following the example of Sarah’s Spa. This will serve as one of the perfect business plans for investors.
2.2 Management of Spa Center
Moving forward with the spa business plan example, the next thing we need to talk about is the management structure of the spa. The chief executive and owner of the Spa will be Sarah Jones. She will actively run the spa and will monitor the day-to-day operations. However, to run the whole setup smoothly, she will hire 2 managers who will be responsible for operations and marketing.
This medical spa business plan template will also address all the other aspects involved in starting and successfully running a spa.
2.3 Customers of Spa Salon
The customers of the spa will be of a range of different types. The ones we are focusing for this spa salon business model will include:
- People who want beauty enhancement treatments.
- People who want to try alternative therapy.
- Customers coming in for therapy suggested by a doctor.
- Customers who want to try modern detox and other health enhancement procedures.
2.4 Business Target
The subjective target of Sarah’s Spa is to provide quality spa services to clients in Miami. Objectively, the following targets have been set for the business:
- Gaining at least 100 permanent clients within a year of starting the business.
- Establishing Sarah’s Spa as a brand in all of Florida as a trustworthy name.
- Expanding the business to include more spa and salon services with the passage of time.
Company Summary
3.1 Company Owner
Sarah Jones is the owner of the business. This spa business plan template depends a lot on Sarah. This is because she has a degree in alternative therapy and has been in the spa business for the last decade. Now she has the investment and wants to start a spa of her own.
3.2 Why the Spa is being started?
Sarah is going to build a spa salon because the business has a lot of scope in Miami. The city is known for its wealthy high-profile people, the type conscious about their health and looks. Sarah plans to monetize on this opportunity and a spa is the best way for that. Moreover, from her experience in the field, Sarah knows that there is a serious gap in the field and if she can bridge it she can make a lot of money, and that too, doing something she is passionate about.
3.3 How the Spa Business will be started?
Step1: Planning the Feasibility
Note
The most important part of this massage spa business plan is the feasibility planning of the business. At this stage, a detailed market survey will be conducted. This will be focused on getting the views of people about the business. This is the stage where we will find out what is the demand for the business and what is the condition of the competition, we are likely to face. This will make the base of this business plan sample for spa.
Step2: Developing a Brand
As Sarah is planning to target the wealthy, high-profile portion of the population of Miami, this is of cardinal importance to develop a brand. The class Sarah wants to target only buys services from brands. All resources will be used to establish a reputable brand.
Step3: Establishing the Spa
The next thing will be to set up the spa. Sarah is in the final stages of acquiring a building on Citrus Drive Miami. This is a former school and has plenty of rooms to set up different facilities of the spa.
Step4: Going Online
The next step will be to establish an online presence. People go to the internet for everything these days and the importance of having appropriate web presence cannot be overstated for the spa business. Just like a reiki marketing plan, this spa business plan needs to have a solid presence on the web.
Step5: Promotion and Marketing
While all that is being done, promotion and marketing of the spa will be initiated via all media channels, print, electronic, and social to make Sarah’s Spa a household name in all of Florida and particularly Miami.
| Start-up Expenses | |
| Legal | $342,000 |
| Consultants | $0 |
| Insurance | $30,000 |
| Rent | $26,000 |
| Research and Development | $22,000 |
| Expensed Equipment | $53,000 |
| Signs | $4,100 |
| TOTAL START-UP EXPENSES | $477,100 |
| Start-up Assets | $344,100 |
| Cash Required | $377,200 |
| Start-up Inventory | $51,000 |
| Other Current Assets | $235,000 |
| Long-term Assets | $280,000 |
| TOTAL ASSETS | $1,287,300 |
| Total Requirements | $1,764,400 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $477,100 |
| Start-up Assets to Fund | $1,287,300 |
| TOTAL FUNDING REQUIRED | $1,764,400 |
| Assets | |
| Non-cash Assets from Start-up | $1,682,400 |
| Cash Requirements from Start-up | $394,000 |
| Additional Cash Raised | $55,000 |
| Cash Balance on Starting Date | $38,000 |
| TOTAL ASSETS | $2,169,400 |
| Liabilities and Capital | |
| Liabilities | $29,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $45,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $74,000 |
| Capital | |
| Planned Investment | $1,764,400 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,764,400 |
| Loss at Start-up (Start-up Expenses) | $331,000 |
| TOTAL CAPITAL | $2,095,400 |
| TOTAL CAPITAL AND LIABILITIES | $2,169,400 |
| Total Funding | $1,764,400 |
Services
Before the launch of the spa, it is important to have a plan of the services that it will offer. As the spa field is so vast and is so closely linked to alternative medicine and therapy, it is not possible to encompass all the services a spa can offer in this business plan for spa. So we will focus on four of the most important services in this salon and spa business plan pdf.
Full Body Massage
This is one of the basic services provided by any spa. We will hire the most qualified and talented massage artists to provide this service. This will be the legacy service of the business.
Detox Baths
This is an emerging service and a relatively untapped market. We will offer Himalayan salt, and Chinese detox baths for people looking to restore their skin to its formal glory.
Aromatherapy
Essential oils aromatherapy will also be a service offered by our spa. This will include alternative therapy options for relieving stress and depression with essential oils.
Physiotherapy
Last, but not the least, physiotherapy will also be one of the services Sarah’s Spa will offer.
Marketing Analysis of Spa
Business plan for investors
This spa salon business plan pdf also covers the marketing analysis of the spa business. In this section we will see how the market is evolving, what are the areas that still have a chance for new entrants and how can the gap in the industry be monetized. This spa business plan will tell you all of that.
If you want a complete medi spa business plan sample, you can have all of it in the lines that follow.
5.1 Market Trends
If you want to get into this spa business plan, this is the best time for it. Analysts say that the spa industry is currently under its fastest growth period. The industry is expected to be worth more than $150billion by 2022. If you want to know how to start spa salon, this document will tell you all about it.
Within the spa industry, the medical spa branch is the most rapidly growing one. As a matter of fact, it is one of the most registered new businesses in the world right now.
5.2 Marketing Segmentation
The expected customers of Sarah’s Spa will be divided into the following market segments:
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5.2.1 Beauty-Conscious People
This segment of the market will be the most highly paying one for us. Just like a beauty supply business plan, we will monetize the will of people to look good. This segment of the market will also earn us some of the most loyal customers.
5.2.2 Health-Conscious people
This segment of the market will be made up of the people who are interested in things like detox and body cleansing. These people will be given all the services they need. These will also be repeat customers of the business.
5.2.3 People Referred by Doctors
Doctors can sometimes refer people to get alternative therapy. This segment of the market will not be made up of repeat customers but will be a high-paying one.
5.2.4 Salon Customers
People coming to have their hair or makeup done will fall into this category.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Beauty-Conscious People | 32% | 37,000 | 39,000 | 41,000 | 43,000 | 45,000 | 10.00% |
| Health-Conscious People | 28% | 29,000 | 31,000 | 33,000 | 35,000 | 37,000 | 10.00% |
| People Referred by Doctors | 22% | 21,000 | 23,000 | 25,000 | 27,000 | 28,000 | 10.00% |
| Salon Customers | 18% | 17,000 | 19,000 | 21,000 | 23,000 | 25,000 | 11.00% |
| Total | 100% | 104,000 | 112,000 | 120,000 | 128,000 | 135,000 | 10% |
5.3 Business Target
- To provide authentic and dependable spa services to the clients.
- To establish a spa and beauty brand that people can trust and feel comfortable with.
- Having as many regular customers/clients as possible.
- Starting to make more than $30,000 a month by three years after the launch of the spa.
5.4 Product Pricing
The prices of our services will be considerably higher than those of the competitors in the market. This will be done to make it clear to the clients that we are a superior brand. The costs will also need to be higher than them because we are offering a level of service no other in the area is providing.
Marketing Strategy
A solid marketing strategy is the backbone of any spa business plan even if it is a barber business plan. We will conduct a thorough study of the industry and the situation in Miami and all of the state of Florida to make sure that our salon spa business plan pdf has a dependable and scalable marketing strategy.
Let’s see how this free spa business plan template tackles this problem.
6.1 Competitive Analysis
- We have gathered intel and have come to know that the area does not have a reputable spa that people can use.
- The spas in the area are all about beauty salon services and steam baths. We will offer all the modern things that make a spa what it is.
- We will hire educated therapists and alternative therapy experts to deliver a level of service unheard of in the area.
6.2 Sales Strategy
- Sarah’s Spa will be advertised through print electronic and social media.
- We will offer concessions and discounted packages for new customers to drive sales in the start.
- We will provide our clients real value and an unparalleled quality because nothing can be more effective than providing impeccable services to the clients.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Full Body Massage | 43,000 | 45,580 | 48,315 |
| Detox Baths | 42,000 | 44,520 | 47,191 |
| Aromatherapy | 39,000 | 41,340 | 43,820 |
| Physiotherapy | 36,000 | 38,160 | 40,450 |
| TOTAL UNIT SALES | 160,000 | 169,600 | 179,776 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Full Body Massage | $45.00 | $52.20 | $60.55 |
| Detox Baths | $42.00 | $48.72 | $56.52 |
| Aromatherapy | $49.00 | $56.84 | $65.93 |
| Physiotherapy | $54.00 | $62.64 | $72.66 |
| Sales | |||
| Full Body Massage | $1,935,000.00 | $2,379,276.00 | $2,925,557.77 |
| Detox Baths | $1,764,000.00 | $2,169,014.40 | $2,667,020.11 |
| Aromatherapy | $1,911,000.00 | $2,349,765.60 | $2,889,271.78 |
| Physiotherapy | $1,944,000.00 | $2,390,342.40 | $2,939,165.02 |
| TOTAL SALES | $7,554,000.00 | $9,288,398.40 | $11,421,014.67 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Full Body Massage | $43.00 | $48.00 | $55.00 |
| Detox Baths | $40.00 | $44.00 | $52.00 |
| Aromatherapy | $47.00 | $53.00 | $61.00 |
| Physiotherapy | $52.00 | $59.00 | $68.00 |
| Direct Cost of Sales | |||
| Full Body Massage | $1,849,000.00 | $2,187,840.00 | $2,657,314.00 |
| Detox Baths | $1,680,000.00 | $1,958,880.00 | $2,453,942.40 |
| Aromatherapy | $1,833,000.00 | $2,191,020.00 | $2,673,044.40 |
| Physiotherapy | $1,872,000.00 | $2,251,440.00 | $2,750,572.80 |
| Subtotal Direct Cost of Sales | $7,234,000.00 | $8,589,180.00 | $10,534,873.60 |
Personnel plan
The next thing that is an important part of a business plan for a spa business plan is a plan of the staff that will be needed to run the spa. Just like a spa business plan pdf, this business is dependent on the staff to operate profitably. People pay money to get grade-A services and they cannot be delivered if we don’t have the skilled and educated staff for it.
7.1 Company Staff
The following people will be needed to run the business:
- Sarah Jones will be the owner and CEO of the business.
- 2 managers for operations and marketing.
- 6 therapists.
- 3 attendants.
- 3 beauticians.
- 2 helpers.
- 2 guards.
- 1 reception clerk.
- 1 telephone operator.
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Managers | $25,000 | $27,500 | $30,250 |
| Therapists | $60,000 | $66,000 | $72,600 |
| Attendants | $30,000 | $33,000 | $36,300 |
| Beauticians | $27,000 | $29,700 | $32,670 |
| Helpers | $16,000 | $17,600 | $19,360 |
| Guards | $16,000 | $17,600 | $19,360 |
| Reception clerk | $7,000 | $7,700 | $8,470 |
| Telephone operator | $7,000 | $7,700 | $8,470 |
| Total Salaries | $188,000 | $206,800 | $227,480 |
Financial Plan
The last thing we need to complete this med spa business plan sample is the financial plan for the business. This natural skin care business plan needs quite a bit of money to start and operate and the accurate estimate of all the costs involved in it is very hard to prepare. However, we have put together a list of the essential expenses that the starter needs to have:
- The cost of setting up the spa an buying the equipment, furniture, and machinery.
- The cost of acquiring consumable materials used in the procedures.
- The money needed to hire the staff for the spa.
- The salary of the staff for the duration after which the business will start breaking even.
- The cost of developing a website and creating an online presence.
- The cost of marketing and promoting the spa.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.13% | 8.22% | 8.25% |
| Long-term Interest Rate | 8.38% | 8.41% | 8.46% |
| Tax Rate | 24.01% | 24.30% | 25.08% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,000 |
| Assumptions: | |
| Average Per-Unit Revenue | $236.00 |
| Average Per-Unit Variable Cost | $0.65 |
| Estimated Monthly Fixed Cost | $165,000 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $7,554,000 | $9,288,398 | $11,421,015 |
| Direct Cost of Sales | $7,234,000 | $8,589,180 | $10,534,874 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $7,234,000 | $8,589,180 | $10,534,874 |
| Gross Margin | $320,000 | $699,218 | $886,141 |
| Gross Margin % | 4.24% | 7.53% | 7.76% |
| Expenses | |||
| Payroll | $188,000 | $206,800 | $227,480 |
| Sales and Marketing and Other Expenses | $135,000 | $138,000 | $141,000 |
| Depreciation | $2,100 | $2,200 | $2,300 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $3,000 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $3,000 | $31,000 | $32,000 |
| Payroll Taxes | $26,000 | $27,000 | $28,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $359,200 | $410,100 | $435,980 |
| Profit Before Interest and Taxes | ($39,200) | $289,118 | $450,161 |
| EBITDA | ($39,200) | $289,118 | $450,161 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($7,840) | $57,824 | $90,032 |
| Net Profit | ($31,360) | $231,295 | $360,129 |
| Net Profit/Sales | -0.42% | 2.49% | 3.15% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $54,000 | $58,320 | $62,986 |
| Cash from Receivables | $15,000 | $16,200 | $17,496 |
| SUBTOTAL CASH FROM OPERATIONS | $69,000 | $75,210 | $81,227 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $70,000 | $79,000 | $85,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $41,000 | $43,000 | $45,000 |
| Bill Payments | $24,000 | $26,000 | $28,000 |
| SUBTOTAL SPENT ON OPERATIONS | $65,000 | $69,000 | $73,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $65,000 | $70,200 | $75,816 |
| Net Cash Flow | $22,000 | $23,000 | $25,000 |
| Cash Balance | $29,000 | $31,000 | $33,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $275,000 | $308,000 | $338,800 |
| Accounts Receivable | $23,400 | $26,208 | $29,458 |
| Inventory | $4,300 | $4,816 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $280,000 | $313,600 | $352,486 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $20,400 | $22,848 | $25,704 |
| TOTAL LONG-TERM ASSETS | $24,000 | $26,880 | $30,240 |
| TOTAL ASSETS | $296,000 | $331,520 | $372,960 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $19,000 | $21,280 | $23,919 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $18,600 | $20,832 | $23,415 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $16,700 | $18,704 | $21,023 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $55,000 | $59,950 | $65,945 |
| Earnings | $199,400 | $217,346 | $239,081 |
| TOTAL CAPITAL | $285,000 | $310,650 | $341,715 |
| TOTAL LIABILITIES AND CAPITAL | $301,700 | $331,520 | $372,960 |
| Net Worth | $298,000 | $324,820 | $357,302 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.24% | 8.02% | 8.89% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.23% | 10.23% | 11.33% | 9.80% |
| Inventory | 5.42% | 6.01% | 6.65% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 150.30% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.60% | 11.64% | 11.66% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.91% | 4.95% | 4.99% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.62% | 7.68% | 7.75% | 7.38% |
| NET WORTH | 100.80% | 101.61% | 102.54% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.23% | 96.77% | 99.48% | 99.00% |
| Selling, General & Administrative Expenses | 94.30% | 96.85% | 99.56% | 97.80% |
| Advertising Expenses | 1.60% | 1.64% | 1.69% | 1.40% |
| Profit Before Interest and Taxes | 42.20% | 43.34% | 44.55% | 33.90% |
| Main Ratios | ||||
| Current | 33 | 33.2 | 33.5 | 32 |
| Quick | 33.5 | 34 | 34.85 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 73.23% | 74.70% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 94.98% | 99.73% | 104.72% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.22% | 34.25% | 35.31% | N.A. |
| Return on Equity | 56.00% | 57.74% | 59.53% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 31.6 | 33.18 | 34 | N.A. |
| Accounts Payable Turnover | 15 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.4 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $250,000 | $264,000 | $278,784 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.86 | 0.87 | 0.87 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29.3 | 29.5 | 29.8 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.3 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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