The Great Escape - Page 4 of 5

The Great Escape

spa menu with the right ambiance. Soft lighting, hardwood floors, and a cozy fireplace give the establishment a soothing sensation.

With so little seed capital, Boothe quickly ran into a cash flow crunch. “The biggest mistake that I made was not managing my cash flow correctly,” she recalls. Because of this, she was forced to defer the purchase of necessary equipment and supplies until her business was able to generate revenues. It was the only way to keep her doors open.

Now with 10 part-time employees and 2006 revenues of $90,000, Boothe has put together a business model that she hopes will eventually be franchised. “I have a training program in place and an accounting system that can run five different spas across the country. I’m really just waiting for the opportunity to come,” she says.

If this industry continues to grow at its current rate, there will be opportunities for entrepreneurs — provided they remember that the only people taking it easy will be the customers.

Opening A Spa In 10 Steps

  1. Do your homework. The first thing prospective spa owners should do is complete a basic feasibility study. This means taking a look at the space, the size, and the location, and calculating the cost of updating each room. The Day Spa Association (DSA), an industry trade group, publishes The Day Spa Business Bible, which contains information on layouts, business plans, budgeting, product and equipment selections, licenses, and more. The manual, which costs $299 for non members, is available to order from the Website (
  2. Develop a business plan. Be sure to include a three-year financial forecast, your vision for the next three to five years, and an exit strategy. “A lot of people come into it and they’re just kind of flying by the seat of their pants. Six months into it, they’ve spent so much money that they’re out of money and they don’t know how they’re going to make it through the next six months,” says Ufland.
  3. Join a trade organization. Other than the DSA, there’s the International Spa Association (, a community of spa professionals, product manufacturers, and service providers. The International Esthetics, Cosmetics & Spa Conference ( is held several times a year in Las Vegas; Orlando; Florida; and New York, and brings spa owners together with suppliers.
  4. Get your paperwork in order. Since most spas also sell cosmetics, a retail business license from the city, county, or state is required. Certain states also require that the business be registered with the Board of Cosmetology. For a list of state boards of cosmetology, visit the ISA Website.
  5. Have adequate capital. Starting any business is a huge financial endeavor and you should make sure you are financially prepared. Allocate funds for construction, décor, furniture, and equipment. Have emergency funds prepared as well.
  6. Think carefully about the location. Ideally, you do want a degree of foot traffic, but more important is having a location where residents have disposable incomes. “Spas generally want to attract higher income clientele, so you want to look at areas