How to open a spa and wellness centre?
Want to start a spa and wellness centre but don't know where to begin? Then you've come to the right place!
Our comprehensive guide covers everything related to opening a spa and wellness centre - from choosing the right concept to setting out your marketing plan and financing your business.
You'll also learn how to assess the profitability of your business idea and decide whether or not it can be viable from a financial perspective.
Ready to kickstart your entrepreneurial journey? Let's begin!
Understanding how a spa and wellness centre works
The very first step when exploring a business idea such as starting a spa and wellness centre is to make sure you understand how the business operates and makes money (which is what we call the business model).
This will not only give you an initial idea of how profitable the business can be, but it will also enable you to make sure that this is the right business idea for you, given your skills, start-up capital and family or personal lifestyle, in particular.
The best ways to get to grips with the spa and wellness centre's business model are to:
- Talk to spa and wellness centre owners with experience
- Work a few months in a spa and wellness centre already in operation
- Take a training course
Talk to spa and wellness centre owners with experience
Experienced spa and wellness centre owners have valuable insights and can provide practical advice based on their firsthand experiences.
They've likely encountered and overcome challenges that a newcomer might not anticipate. Learning from other’s mistakes can save you both time and money and potentially increase your venture’s chances of succeeding.
Work a few months in a spa and wellness centre already in operation
Obtaining work experience in the industry can be a crucial factor in confirming whether you truly want to start a spa and wellness centre, as it provides insight into the day-to-day activities.
For instance, if the working hours are longer than expected or if other business requirements don't align with your personal lifestyle or preferences, you might reconsider your entrepreneurial goals.
Even if you've decided that this business idea is a good fit for you, gaining work experience will still be valuable. It helps you better understand your target market and customer needs, which is likely to be beneficial when launching your own spa and wellness centre.
Take a training course
Obtaining training within your chosen industry is another way to get a feel for how a spa and wellness centre works before deciding to pursue a new venture.
Whatever approach you choose to familiarise yourself with the business, before going any further with your plans to open a spa and wellness centre, make sure you understand:
- What skills are required to run the business (compare this with your own skills)
- What a typical week in the business is like (compare this with your personal or family life)
- What is the potential turnover of a spa and wellness centre and the long-term growth prospects (compare this with your level of ambition)
- Your options once you decide to sell the business or retire (it's never too early to consider your exit)
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Assembling your spa and wellness centre's founding team
The next step to opening your spa and wellness centre is to think about the ideal founding team, or to decide to go in alone.
Starting and growing a successful business doesn't have to be a solo journey and setting up a spa and wellness centre with several co-founders is generally easier. The business benefits from a management team with a wider skillset, decisions are made together, and the financial risk is shared among the partners, making the journey more collaborative and less daunting.
But, running a business with several partners brings its own challenges. Disagreements between co-founders are quite common, and these can pose risks to the business. That's why it's crucial to consider all aspects before starting your own business.
We won't go into too much detail here, as this is a complex topic that deserves its own guide, but we do recommend that you ask yourself the following questions:
- What is the ideal number of co-founders for this venture?
- Are you on the same wavelength as your potential partners in terms of vision and ambition?
- How will you deal with potential failure?
Let's look at each of these questions in more detail.
What is the ideal number of co-founders for this venture?
To answer this question you will need to consider the following:
- What skills do you need to run the business? Are you lacking any?
- How much startup capital do you need? How much do you have?
- How are key decisions going to be made? - It is usually advisable to have an odd number of partners (or a majority shareholder) to help break the tie.
Put simply, your co-founders contribute skills, capital, or both. Increasing the number of partners becomes advantageous when there is a deficiency in either of these resources.
Are you on the same wavelength as your potential partners in terms of vision and ambition?
Your business partners should share the same short and long-term vision, be it business expansion or social responsibility, to avoid future frustrations and simplify decision-making. Different views are natural, but alignment is ideal.
In any case, you should think of having an exit mechanism in place in case one of the partners wants to move on.
How will you deal with potential failure?
We wish you nothing but success when starting up and growing your spa and wellness centre, but it's always wise to have a backup in case things don't go as planned.
How you deal with a potential failure can vary significantly based on the relationship you have with your business partner (close friend, spouse, ex-colleague, etc.) and the personal circumstances of each of you.
For instance, starting a business with your spouse might seem appealing, but if it doesn't succeed, you risk losing 100% of the household income at once, which could be stressful.
Similarly, going into a partnership with a friend can put pressure on the friendship in the event of failure or when you need to make difficult decisions.
There is no wrong answer, but it is essential to carefully evaluate your options before starting up to ensure you're well-prepared for any potential outcomes.
Conducting market research for a spa and wellness centre
The next step in launching a spa and wellness centre is to carry out market research. Let's take a look at what this involves.
The objectives of market research
The objective here is very simple: to assess the level of demand for your business and whether there is an opportunity for it to thrive in your chosen location.
The first step will be to check that the market is not saturated with competing offers and that there is room for a new player: your spa and wellness centre.
Your market analysis will also help you identify a concept and market positioning that has every chance of being successful in your target market, thereby helping increase your business's chances of success.
Carrying out market research for your spa and wellness centre will also enable you to better understand the expectations of your future customers and the most effective ways to communicate with them in your marketing plan.
Analyse key trends in the industry
Your market research should start with an industry analysis in order to gain a good understanding of the main players and current trends in your sector.
Once you've delved into the current state of the market, it will be time to assess what proportion of your target market can be seized by your spa and wellness centre. To do this, you will need to consider both the demand and supply side of the market.
Assess the demand
After checking out the industry, let's shift our focus to figuring out what your potential customers want and how they like to buy.
A classic mistake made by first-time entrepreneurs is to assess demand on the global or national market instead of concentrating on their target market. Only the market share that can be captured by your company in the short term matters.
Your demand analysis should seek to find answers to the following questions:
- Who are your target customers?
- How many are there?
- What are their expectations?
- What are their buying habits?
- How much budget do they have?
- What are the different customer segments and their characteristics?
- What are the main distribution channels and means of communication for reaching each segment?
The aim of the demand analysis is to identify the customer segments that could be targeted by your spa and wellness centre and what products and services you need to offer to meet their expectations.
Analyse the supply side
You will also have to familiarize yourself with the competing spa and wellness centres on the market targeted by your future business.
Amongst other things, you’ll need to ask yourself:
- Who are the main competitors?
- How many competitors are already present?
- Where are they located?
- How many people do they employ?
- What is their turnover?
- How do they set their prices?
- Are they small independent businesses or national players?
- Do they seem to be in difficulty or are they flourishing?
- What is their market positioning?
- What types of products and services do they offer?
- What do customers seem to like about them?
The aim of the competitive analysis is to identify who your competitors will be and to gather information that will help you find a differentiating commercial positioning (more on that later in this guide).
Regulations
Conducting market research is also an opportunity to look at the regulations and conditions required to do business.
You should ask yourself the following questions:
- Do you need to have a specific degree to open a spa and wellness centre?
- Do you need specific licences or permits?
- What are the main regulations applicable to your future business?
Given that your project is at an early stage, your focus should be to clear that there are no roadblocks from a regulatory standpoint before you deep dive into the planning process.
Once your project is more advanced, you will have the opportunity to talk about regulation more in-depth with your lawyer.
Concluding your market research
By the time your market research is completed, you should have either:
- Pinpointed an untapped business opportunity
- Or arrived at the realisation that the market is saturated, prompting the search for alternative business ideas or models.
If the conclusion is that there is an opportunity in the market to cater to one or more customer segments currently overlooked by competitors, that's great!
Conversely, if you come to the conclusion that the market is already saturated, don’t panic! The good news is that you won’t spend several years working hard on a project that has little chance of success. There is no shortage of business ideas either - at The Business Plan Shop, we have identified more than 1,300 potential business ideas!
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Choose the right concept and position your spa and wellness centre on the market
The next step to start a spa and wellness centre is to choose the company's market positioning.
Market positioning refers to the place your product and service offering occupies in customers' minds and how it differs from how competitors are perceived. Being perceived as a high-end solution, for example.
To do this, you need to take the following considerations into account:
- How can you make your business stand out from your competitors?
- Can you consider joining a franchise as a way to lower the risks involved?
- Is it better to start a new spa and wellness centre or acquire one that is already up and running?
- How to make sure your concept meets customer needs?
Let's look at each of these in a little more detail.
How can you make your business stand out from your competitors?
When you decide to start your own spa and wellness centre, you're facing an upward challenge because your competitors are already ahead. They have a good reputation, loyal customers, and a strong team, while you're just getting started.
Opening a spa and wellness centre offering exactly the same thing as your competitors is risky and potentially doomed to fail: why would customers take the risk of choosing a newcomer rather than a company with a proven track record?
This is why it is advisable to avoid direct confrontation by adopting a differentiated market positioning wherever possible: in other words, by offering something different or complementary to what is available on the market.
To find a market positioning that has every chance of success, you need to ask yourself the following questions:
- Can you negate direct competition by serving a customer profile that is currently poorly addressed by your competitors?
- Can your business provide something different or complementary to what is already available on the market?
- Why will customers choose your spa and wellness centre over the competition?
- How will your competitors react to your entry into their market?
- Is the market sufficiently large and fragmented (i.e. not dominated by a few large chains) to allow you to set up an independent business, or is it better to consider another avenue (see below)?
Can you consider joining a franchise as a way to lower the risks involved?
A good way of getting a market positioning that is guaranteed to seduce customers is to join a group with a proven concept.
Admittedly, joining a franchise is not necessarily as exciting as opening a spa and wellness centre with a clean slate, everything to invent and total freedom to do so, but it is a proven way of reducing the risk of entering the market.
By joining a franchise, you will benefit from a concept that is successful with customers, the brand recognition of a large network, and operational support with regard to supplier relations, processes and operating standards, etc.
In return, you will have to pay an entry fee and an annual royalty (on your company's sales).
Joining a franchise is a trade-off where you need additional capital and get less freedom in exchange for a lot less risk. It's not for everyone, and it's not possible everywhere (franchise opportunities vary from region to region), but it is nevertheless an option you should explore.
Is it better to start a new spa and wellness centre or acquire one that is already up and running?
Another way to benefit from a proven concept and reduce the risk of your project is to take over a spa and wellness centre.
Buying a spa and wellness centre allows you to get a team, a customer base, and above all to preserve the balance on the market by avoiding creating a new player. For these reasons, taking over a business is a lot less risky than creating one from scratch.
Taking over a business also gives you greater freedom than franchising, because you have the freedom to change the positioning and operations of the business as you see fit.
However, as you can imagine, the cost of taking over a business is higher than that of opening a spa and wellness centre because you will have to finance the purchase.
How to make sure your concept meets customer needs?
Once you have decided on your concept and the market positioning of your future spa and wellness centre, you will need to check that it meets the needs, expectations and desires of your future customers.
To do this, you need to present it to some of your target customers to gather their impressions.
Where should I base my spa and wellness centre?
The next step in our guide on starting a spa and wellness centre involves making a key choice about where you want your business to be located.
Picking the ideal location for your business is like selecting the perfect canvas for a painting. Without it, your business might not showcase its true colors.
We recommend that you take the following factors into account when making your decision:
- Parking space, road and public transport accessibility - A spa and wellness centre may attract customers who are looking for relaxation and pampering, so it is important to have convenient and easily accessible parking and public transportation options for them to reach the location.
- Proximity to target customers - The ideal location for a spa and wellness centre would be close to a target demographic, such as a wealthy neighborhood or a business district with high-income professionals. This will increase the chances of attracting potential customers to the business.
- Premises layout - The layout of the premises is crucial for a spa and wellness centre as it should provide a calm and tranquil atmosphere for customers. The location should have enough space for treatment rooms, relaxation areas, and other necessary facilities.
- Visibility and foot traffic - A visible location with high foot traffic can be beneficial for a spa and wellness centre, as it can attract potential customers who may not have heard of the business before. This can also help increase brand awareness and attract impulse customers.
This list is not comprehensive and will have to be adjusted based on the details of your project.
The parameters to be taken into account will also depend on whether you opt to rent premises or buy them. If you are a tenant, you will need to consider the conditions attached to the lease: duration, rent increase, renewal conditions, etc.
Lease agreements differ widely from country to country, so it's essential to review the terms that apply to your situation. Before putting pen to paper, consider having your lawyer look carefully at the lease.
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Decide on a legal form for your spa and wellness centre
It's now time to think about the legal structure for your spa and wellness centre.
The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.
What are the most common legal structures?
Naturally, the names and intricacies of business structures differ by country. However, they typically fit into two main categories:
- Individual businesses
- Companies
Individual businesses
Individual businesses are usually a good fit for self-employed individuals and freelancers who want limited administrative work. These types of entrepreneurs are commonly referred to as sole traders or sole proprietorships.
As mentioned above, the main benefit of being a sole trader is that minimal paperwork is required to launch and operate the business. Tax calculations are also relatively simple and annual accounts are not always required (and when they are, usually don't need to be audited) which saves a bit of time and money on bookkeeping and accounting fees.
Decision-making is also easy as the final decision is fully dependent on the sole trader (even if employees are hired).
However, being a sole trader also has drawbacks. The main disadvantage is that there is no separation between the individual running day-to-day operations and the business.
This means that if the business were to file for bankruptcy or legal disputes were to arise, the individual would be liable for any debts and their personal assets subsequently at risk. In essence, sole traders have unlimited liability.
This also means that profits earned by the business are usually taxed under the personal income tax category of the sole trader.
Another drawback is that sole traders might find it harder to finance their business. Debt (bank loan for example) is likely to be the only source of external financing given that the business doesn't have a share capital (effectively preventing equity investors from investing in their business).
Companies
Companies are more flexible and more robust than individual businesses. They are suitable for projects of all sizes and can be formed by one or more individuals, working on their own or with employees.
Unlike individual businesses, companies are recognised as distinct entities that have their own legal personality. Usually, there is also a limited liability which means that founders and investors cannot lose more than the capital they have invested into the business.
This means that there is a clear legal separation between the company and its owners (co-founders and investors), which protects the latter's personal assets in the event of legal disputes or bankruptcy.
Entrepreneurs using companies also gain the advantage of being able to attract equity investment by selling shares in the business.
As you can see companies offer better protection and more financing options, but this comes at a trade-off in terms of red-tape and complexity.
From a taxation perspective, companies are usually liable for corporation tax on their profits, and the income received by the owners running the business is taxed separately (like normal employees).
Normally, companies also have to produce annual accounts, which might have to be audited, and hold general assemblies, among other formalities.
How should I choose my spa and wellness centre's legal setup?
Choosing the right legal setup is often simple once you figure out things like how many partners you'll have, if you hire employees, and how much money you expect to make.
Remember, a great business idea can work well no matter which legal structure you pick. Tax laws change often, so you shouldn't rely too much on getting specific tax benefits from a certain structure when getting started.
You could start by looking at the legal structures most commonly utilised by your competitors. As your idea evolves and you're ready to officially register your business, it's a good idea to confirm your choice using inputs from a lawyer and an accountant.
Can I switch my spa and wellness centre's legal structure if I get it wrong?
Yes, you have the flexibility to change your legal setup later, which might include selling the existing one and adopting a new structure in certain situations. Keep in mind, though, that this restructuring comes with additional expenses, so making the right choice from the start is usually more cost-effective.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
How much money do I need to start a spa and wellness centre?
To answer this key question, we first need to look at the resources you'll need to launch your spa and wellness centre and keep it running on a daily basis. Let's take a look at what that entails.
Since each venture is distinct, providing an average budget for starting a spa and wellness centre is impossible.
We strongly advise careful consideration when reading estimates on the web. It’s best to ask yourself the following questions:
- Is my project similar (location, concept, planned size, etc.)?
- Can I trust where this information is coming from?
- Is the data fresh or stale?
Your thinking behind the investments and human resources required to launch and operate the business will then enable you to cost each item and include them in your financial forecast (which we'll look at later in this guide).
Once complete, the forecast will give you a precise idea of the initial investment required and profitability potential for your business idea.
Startup costs and investments to start a spa and wellness centre
Let's start with the investments. To set up a spa and wellness centre, initial working capital and investments can include the following items:
- Equipment: This includes items such as massage tables, facial beds, hot tubs, saunas, and other equipment necessary for providing spa and wellness services.
- Furniture and Fixtures: This includes items such as reception desks, waiting area furniture, shelving, and display units for retail products.
- Renovations and Upgrades: This may include construction costs for creating treatment rooms, updating the overall design and layout of the spa, or installing new technology for services.
- Software and Technology: This may include purchasing software for booking appointments, managing inventory, and running the business operations efficiently.
- Vehicles: If your spa offers mobile services or has a transportation service for clients, you may need to purchase a vehicle for this purpose.
Of course, you will need to adapt this list to your company's specific needs.
Staffing requirements to operate a spa and wellness centre
You'll also need to think about the staff required to run the business on a day-to-day basis.
The human resources required will vary according to the size of your company.
Once again, this list is only indicative and will need to be adjusted according to the specifics of your spa and wellness centre.
Operating expenses of a spa and wellness centre
The final point to consider when analyzing the resources required is the question of operating costs.
Operating expenses for a spa and wellness centre may include:
- Staff costs: This includes salaries, wages, benefits, and training costs for all employees, including spa therapists, receptionists, and cleaning staff.
- Accountancy fees: You will need to hire an accountant to manage your financial records, prepare tax returns, and provide financial advice for your spa and wellness centre.
- Insurance costs: It is essential to have insurance coverage for your business, including liability insurance, property insurance, and workers' compensation insurance.
- Software licenses: You may need to purchase software licenses for various purposes, such as appointment scheduling, inventory management, and accounting.
- Banking fees: There will be fees associated with maintaining a business bank account, including transaction fees, monthly account fees, and wire transfer fees.
- Marketing and advertising: You will need to allocate a budget for marketing and advertising to promote your spa and wellness centre and attract new customers.
- Rent or mortgage: If you do not own the property where your spa and wellness centre is located, you will need to pay rent or a mortgage for the space.
- Utilities: This includes electricity, water, and gas expenses for your spa and wellness centre.
- Supplies and consumables: You will need to purchase supplies and consumables regularly, such as massage oils, skincare products, and cleaning supplies.
- Maintenance and repairs: You may encounter unexpected repair and maintenance costs for your spa and wellness centre, such as fixing broken equipment or plumbing issues.
- Professional fees: You may need to hire outside consultants or professionals, such as legal advisors or marketing experts, for specific projects or advice.
- Professional development: It is essential to invest in the ongoing training and development of your staff to maintain high-quality services and keep up with industry trends.
- Taxes: You will need to pay various taxes, such as income tax, sales tax, and payroll taxes, depending on your location and business structure.
- Cleaning and laundry: You will need to budget for cleaning and laundry services for linens, towels, and other materials used in your spa and wellness centre.
- Office supplies: Miscellaneous office supplies, such as stationery, printer ink, and postage, should also be included in your operating expenses forecast.
Here also, this list will need to be tailored to the specifics of your spa and wellness centre but should be a good starting point for your budget.
Create a sales & marketing plan for your spa and wellness centre
The next step to launching your spa and wellness centre is to think about the actions you need to take to promote your products and services and build customer loyalty.
Here, you'll be looking at the following issues:
- What is the best method to attract as many new customers as possible?
- How to build customer loyalty and spread word of mouth?
- What human and financial resources will be required to implement the planned actions?
- What level of sales can I expect to generate in return?
The precise sales and marketing levers to activate will depend on the size of your spa and wellness centre. But you could potentially leverage some of the initiatives below.
Besides your sales and marketing plan, your sales forecast will be affected by seasonal patterns related to the nature of your business, such as fluctuations during the holiday season, and your competitive landscape.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
How do I build my spa and wellness centre financial forecast?
Let's now look at the financial projections you will need to prepare in order to open a spa and wellness centre.
What is a spa and wellness centre's financial projection?
Your financial forecast will help you budget your project so that you can evaluate:
- Its expected sales and growth potential
- Its expected profitability, to ensure that the business will be viable
- Its cash generation and financing requirements
Making your financial forecast is the only way to determine the amount of initial financing required to create your spa and wellness centre.
There are lots of business ideas out there, but very few of them are viable, and making a financial forecast is the only way to ensure that your project makes economic and financial sense.
Creating a spa and wellness centre financial projection is an iterative process, as you'll need to refine your figures as your business idea matures.
You'll start with a first high-level version to decide whether or not to continue working on the project.
Then, as your project takes shape, your forecasts will become increasingly accurate. You'll also need to test different assumptions to ensure that your idea of starting a spa and wellness centre holds up even if your trading environment deteriorates (lower sales than expected, difficulties in recruiting, sudden cost increases or equipment failure problems, for example).
Your financial forecast will be part of your overall business plan, which we'll look at in more detail later. Your financial partners will use your business plan to decide if they want to finance you.
Once you've launched your business, you can compare your actual accounting figures with your forecasts, to analyze where the discrepancies come from, and then update your forecasts to maintain visibility over your future cash flows.
Financial forecasts are, therefore, a financial management tool that will be with you throughout the life of your company.
What does a financial forecast look like?
Once ready, your spa and wellness centre forecast will be presented using the financial tables below.
The forecasted profit & loss statement
The profit & loss forecast gives you a clear picture of your business’ expected growth over the first three to five years, and whether it’s likely to be profitable or not.
The projected balance sheet
Your spa and wellness centre's forecasted balance sheet enables you to assess your financial structure and working capital requirements.
The projected cash flow statement
A projected cash flow statement to start a spa and wellness centre is used to show how much cash the business is expected to generate or consume over the first three years.
What is the best financial forecasting tool for starting your spa and wellness centre?
The simplest and easiest way to create your spa and wellness centre's projections is to use professional online financial forecasting software such as the one we offer at The Business Plan Shop.
There are several advantages to using specialised software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- The software helps you identify and correct any inconsistencies in your figures
- You can create scenarios to stress-test your forecast's main assumptions to stress-test the robustness of your business model
- After you start trading, you can easily track your actual financial performance against your financial forecast, and recalibrate your forecast to maintain visibility on your future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
Choose a name and register your spa and wellness centre
The next phase in launching your spa and wellness centre involves selecting a name for your company.
This stage is trickier than it seems. Finding the name itself is quite fun; the difficulty lies in finding one that is available and being the first to reserve it.
You cannot take a name that is similar to a name already used by a competitor or protected by a registered trademark without inevitably risking legal action.
So you need to find a name that is available, and be able to register it before someone else can.
In addition, you will probably want to use the same name for:
- Your company’s legal name - Example LTD
- Your business trading name - Example
- The trademark - Example ®
- Your company’s domain name - Example.com
The problem is that the procedures for registering these different names are carried out in different places, each with their own deadlines:
- Registering a domain name takes only a few minutes
- Registering a new trademark takes at least 12 weeks (if your application is accepted)
- The time taken to register a new business depends on the country, but it's generally fast
You will therefore be faced with the choice of: either registering everything at once and hoping that your name will be accepted everywhere, or proceeding step by step in order to minimise costs, but taking the risk that someone else will register one of the names you wanted in the meantime.
Our advice is to discuss strategy with your legal counsel (see further down in this guide) and prioritise your domain names and registered trademarks. You'll always have the option of using a trade name that's different from your company's legal name, and that's not a big deal.
To check that the name you want is not already in use, you should consult:
- Your country's business register
- The relevant trademark registers depending on which countries you want to register your trade mark in
- A domain name reservation company such as GoDaddy
- An Internet search engine
In this area too, your legal counsel will be able to help with the research and formalities.
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Deciding upon the corporate identity of your spa and wellness centre
The next step in opening a spa and wellness centre is to look at your company's visual identity.
Your company's “visual identity” plays a crucial role in shaping your brand image. It helps you to be recognizable and to stand out from your competitors.
Although you can define your visual identity yourself, it is generally advisable to call on the services of a designer or marketing agency to achieve a professional result.
At a minimum, you will need to define the following elements:
- Logo
- Brand guidelines
- Business cards
- Website theme
Logo
Your spa and wellness centre's logo allows others to quickly identify your company. It will be used on all your communication media (website, social networks, business cards, etc.) and official documents (invoices, contracts, etc.).
In addition to its design, it's important that your logo is available in a variety of colors, so that it can be seen on all media (white, dark background, etc.).
Brand guidelines
Having brand guidelines enables you to maintain consistency in formatting across all your communications media and official documents.
Brand guidelines define the font (family and size), design and colours used by your brand.
In terms of fonts, for example, you may use Roboto in size 20 for your titles and Lato in size 14 for your texts.
The colours used to represent your brand should generally be limited to five:
- The main colour,
- A secondary colour (the accent),
- A dark background colour (blue or black),
- A grey background colour (to vary from white),
- Possibly another secondary colour.
Business cards
Designing business cards for your spa and wellness centre is a must, as they will allow you to communicate your contact details to your customers, suppliers, partners, potential recruits, etc.
In principle, they will include your logo and the brand guidelines that we mentioned above.
Website theme
In the same way, the theme of your spa and wellness centre website will be based on your logo and the brand guidelines we mentioned above.
This involves defining the look and feel of your site's main graphic elements:
- Buttons,
- Menus,
- Forms,
- Banners,
- Etc.
Navigate the legal and regulatory requirements for launching your spa and wellness centre
The next thing to do in getting a spa and wellness centre off the ground is to handle all the legal and regulatory requirements. We recommend that you be accompanied by a law firm for all of the steps outlined below.
Intellectual property
One of your priorities will be to ensure that your company's intellectual property is adequately protected.
As explained before, you can choose to register a trademark. Your lawyer can help you with a detailed search to make sure your chosen trademark is unique and doesn't clash with existing ones.
They'll assist in preparing the required documents and steer you in picking the right categories and locations for trademark registration.
Moreover, your lawyer can offer guidance on additional measures to protect other intellectual property assets your company may have.
Getting your spa and wellness centre paperwork in order
For day-to-day operations, your spa and wellness centre will need to rely on a set of contractual documents.
Your exact needs in this respect will depend on the country in which you are launching your spa and wellness centre, the number of partners and the envisaged size of the company.
However, you will probably need at least the following documents:
- Employment contracts
- General terms and conditions of sale
- General terms and conditions of use for your website
- Privacy Policy for your website
- Cookie Policy for your website
- Invoices
- Etc.
Applying for licences and permits and registering for various taxes
Operating your business legally may require licences and business permits. The exact requirements applicable to your situation will depend on the country in which you set up your spa and wellness centre.
The lawyers who advise you will also be able to guide you with regard to all the rules applicable to your business.
Similarly, your accountant will be able to help you take the necessary steps to comply with the tax authorities.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
Create a business plan for your spa and wellness centre
The next step to open a spa and wellness centre: put together your business plan.
What is a business plan?
To keep it simple, a business plan comprises two crucial components:
- Firstly, a numerical part, the financial forecast (which we mentioned earlier), which highlights the initial financing requirements and profitability potential of the spa and wellness centre,
- And a written, well-argued section that presents your project in detail, aims to convince the reader of its chances of success, and provides the context needed to assess whether the forecast is realistic or not.
The business plan will enable you to verify the coherence of your project, and ensure that the company can be profitable before incurring further costs. It will also help you convince business and financial partners.
As you can see, your business plan must be convincing and error-free.
How to write a business plan for a spa and wellness centre?
Nowadays, the modern and most efficient way to write a spa and wellness centre business plan is to use startup business plan software like the one we offer at The Business Plan Shop.
Using The Business Plan Shop to create a business plan for aspa and wellness centre has several advantages :
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete startup business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can create scenarios to stress test your forecast's main assumptions
- You can easily track your actual financial performance against your financial forecast by importing accounting data
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast and write a business plan to help convince investors that your business idea can be profitable.
How to raise finance for my spa and wellness centre?
Once your business plan has been drafted, you’ll need to think about how you might secure the financing necessary to open your spa and wellness centre.
The amount of initial financing required will obviously depend on the size of your spa and wellness centre and the country in which you wish to set up.
Businesses have access to two main categories of financing: equity and debt. Let's take a closer look at how they work and what sources are available.
Equity funding
At a high level, the equity of your spa and wellness centre will consist of the money that founders and potential investors will invest to launch the company.
Equity is indispensable as it provides the company with a source of long-term (often permanent) financing and demonstrates the founders' conviction in the company's chances of success, since their investments would be lost in the event of bankruptcy.
Equity investors can generate a return on their investment through dividends (which can only be paid out if the company is profitable) or capital gains on the resale of their shares (if the company is attractive enough to attract a buyer).
As you can see, the equity investors' position is extremely risky, since their capital is at risk and can be lost in the event of bankruptcy, and the company must be profitable or resellable before they can hope to generate a return on their investment.
On the other hand, the return on investment that equity investors can expect to generate by investing in a spa and wellness centre can be very substantial if the company is successful.
This is why equity investors look for start-up ideas with very high growth or profitability potential, in order to offset their risk with a high potential return on investment.
In technical terms, equity includes:
- Share capital and premiums: which represent the amount invested by the shareholders. This capital is considered permanent as it is non-refundable. In return for their investment, shareholders receive shares that entitle them to information, decision-making power (voting in general assembly), and the potential to receive a portion of any dividends distributed by the company.
- Director loans: these are examples of non-permanent capital advanced to the company by the shareholders. This is a more flexible way of injecting some liquidity into your company than doing so as you can repay director loans at any time.
- Reserves: these represent the share of profits set aside to strengthen the company's equity. Allocating a percentage of your profits to the reserves can be mandatory in certain cases (legal or statutory requirement depending on the legal form of your company). Once allocated in reserves, these profits can no longer be distributed as dividends.
- Investment grants: these represent any non-refundable amounts received by the company to help it invest in long-term assets.
- Other equity: which includes the equity items which don't fit in the other categories. Mostly convertible or derivative instruments. For a small business, it is likely that you won't have any other equity items.
The main sources of equity are as follows:
- Money put into the business from the founders' personal savings.
- Money invested by private individuals, which can include business angels, friends, and family members.
- Funds raised through crowdfunding, which can take the form of either equity or donations (often in exchange for a reward).
- Government support to start-ups, for example, loans on favourable terms to help founders build up their start-up capital.
Debt funding
The other way to finance your spa and wellness centre is to borrow. From a financial point of view, the risk/return profile of debt is the opposite of that of equity: lenders' return on investment is guaranteed, but limited.
When it borrows, your company makes a contractual commitment to pay the lenders by interest, and to repay the capital borrowed according to a pre-agreed schedule.
As you can see, the lenders' return on investment is independent of whether or not the company is profitable. In fact, the only risk taken by lenders is the risk of the company going bankrupt.
To avoid this risk, lenders are very cautious, only agreeing to finance when they are convinced that the borrowing company will be able to repay them without problems.
From the point of view of the company and its stakeholders (workforce, customers, suppliers, etc.), debt increases the risk of the venture, since the company is committed to repaying the capital whether or not it is profitable. So there's a certain distrust towards heavily indebted companies.
Companies borrow in two ways:
- Against their assets: this is the most common way of borrowing. The bank finances a percentage of the price of an asset (a vehicle or a building, for example) and takes the asset as collateral. If the company cannot repay, the bank seizes the asset and sells it to limit its losses.
- Against their future cash flows: the bank reviews the company's financial forecast to estimate how much the company can comfortably borrow and repay, and what terms (amount, interest rate, term, etc.) the bank is prepared to offer given the credit risk posed by the company.
When creating a spa and wellness centre, the first option is often the only one available, as lenders are often reluctant to lend on the basis of future cash flows to a structure that has no track record.
The type of assets that can be financed using the first method is also limited. Lenders will want to be sure that they can dispose of foreclosed assets if needed, so they need to be assets that have an established second-hand market.
That being said, terms and conditions also depend on the lender: some banks are prepared to finance riskier projects, and not all have the same view of your company's credit risk. It also depends on the collateral you can offer to reduce risk, and on your relationship with the bank.
In terms of possible sources of borrowing, the main sources here are banks and credit institutions.
In some countries, it's also possible to borrow from private investors (directly or via crowdlending platforms) or other companies, but not everywhere.
Takeaways on how to finance a spa and wellness centre
Multiple options are available to help you raise the initial financing you need to launch your spa and wellness centre.
There are two types of financing available to companies. To open a spa and wellness centre, an equity investment will be required and may be supplemented by bank financing.
Launching your spa and wellness centre and monitoring progress against your forecast
Once you’ve secured financing, you will finally be ready to launch your spa and wellness centre. Congratulations!
Celebrate the launch of your business and acknowledge the hard work that brought you here, but remember, this is where the real work begins.
As you know, 50% of business start-ups do not pass the five-year mark. Your priority will be to do everything to secure your business's future.
To do this, it is key to keep an eye on your business plan to ensure that you are on track to achieve your goals.
No one can predict the future with certainty, so it’s likely that your spa and wellness centre's financial performance will differ from what you predicted in your forecast.
This is why it is recommended to make several forecasts:
- A base case (most likely)
- An optimistic scenario
- And a pessimistic scenario to test the robustness of your financial model
If you follow this approach, your numbers will hopefully be better than your optimistic case and you can consider accelerating your expansion plans. That’s what we wish you anyway!
If, unfortunately, your figures are below your base case (or worse than your pessimistic case), you will need to quickly put in place corrective actions, or consider stopping the activity.
The key, in terms of decision-making, is to regularly compare your real accounting data to your spa and wellness centre's forecast to:
- Measure the discrepancies and promptly identify where the variances with your base case come from
- Adjust your financial forecast as the year progresses to maintain visibility on future cash flow and cash position
There is nothing worse than waiting for your accountant to prepare your year-end accounts, which can take several months after the end of your financial year (up to nine months in the UK for example), to realise that the performance over the past year was well below the your base case and that your spa and wellness centre will not have enough cash to keep running over the next twelve months.
This is why using a financial forecasting solution that integrates with accounting software and offers actuals vs. forecast tracking out of the box, like the financial dashboards we offer at The Business Plan Shop, greatly facilitates the task and significantly reduces the risk associated with starting a business.
Need inspiration for your business plan?
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Key takeaways
- There are 15 key steps to opening a spa and wellness centre.
- Your financial forecast will enable you to accurately assess your initial financing requirements and the potential profitability of your project.
- Your business plan will give your financial partners the context they need to be able to judge the consistency and relevance of your forecast before deciding whether or not to finance the creation of your spa and wellness centre.
- Post-launch, it's essential to have an up-to-date forecast to maintain visibility of your business's future cash flows.
- Using a financial planning and analysis platform that integrates forecasts, business plans and actual performance monitoring, such as The Business Plan Shop, makes the process easier and reduces the risks involved in starting a business.
We hope this guide has helped you understand how to open a spa and wellness centre. Please don't hesitate to contact us if you have any questions or want to share your experience as an entrepreneur.
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Founder & CEO at The Business Plan Shop Ltd
