How Much Does Massage Business Make? A Profitability Breakdown

Curious about how much does massage business make? The massage spa industry in the United States is a significant sector, with considerable opportunities for profitability. In 2023, the U.S. massage spa market was valued at approximately $19 billion.

This figure reveals the immense potential within this industry, driven by a diverse range of services and a high demand for relaxation and therapeutic treatments.

Understanding the Massage Spa Market

Freepik | Relaxation and luxury massages (Swedish, aromatherapy) generated $8.2 billion revenue.

The massage spa market comprises various segments:

1. Therapeutic Massage Services – This sector dominates, generating $8.6 billion in revenue. It includes deep tissue massages, sports massages, and other specialized treatments aimed at relieving pain and improving physical health.

2. Non-Therapeutic Massage Services – With a revenue of $8.2 billion, this segment covers relaxation and luxury massages, including Swedish and aromatherapy massages.

3. Other Massage Services and Products – This category, worth $2.2 billion, includes massage-related products such as oils and creams, as well as ancillary services.

With over 241,000 massage spas operating across the country, competition is intense. Understanding how much a massage business makes requires a deep dive into revenue streams, startup costs, and operational expenses.

How Much Does Massage Business Make?

The average annual gross revenue for a franchise-owned massage spa stands at about $1,112,000. This figure is derived from over 2,070 spas operated by some of the largest massage franchise chains in the U.S. These spas tend to have larger customer bases compared to independent operations.

Average Revenue Breakdown

• Average Visit Cost: $75 to $100 per hour
• Estimated Annual Visits: 11,000 to 14,800
• Daily Customer Average: 45 to 60 (based on 250 working days)

The profitability of a massage spa can vary based on factors like location, type of service offered, and whether it is part of a franchise. Franchised spas typically benefit from established brand recognition and a steady influx of clients.

Initial Costs of Starting a Massage Spa

Opening a massage spa requires a significant investment, with costs ranging from $540,000 to $831,000. Here’s a breakdown of typical expenses:

• Rent and Utility Deposits (2% of revenue): Securing a location and essential services.
• Leasehold Improvements (51% of revenue): Enhancements to create an inviting and relaxing environment.
• Furniture, Fixtures, and Equipment (15% of revenue): Essential for comfort and functionality.
• Office Equipment and Software (6% of revenue): Technology for managing operations.
• Initial Inventory and Supplies (3% of revenue): Massage oils, lotions, and other necessary products.
• Signage (2% of revenue): To attract customers and establish a presence.
• Marketing (5% of revenue): Promoting the spa and building a client base.
• Training (1% of revenue): Ensuring staff are skilled and knowledgeable.
• Licenses, Permits, and Insurance (4% of revenue): Legal and operational requirements.
• Working Capital (11% of revenue): Funds for initial operational costs and emergencies.

Operating Costs and Profit Margins

Freepik | Running a massage spa means regular costs, including supplies like oils and lotions (5-10% of income).

Operating a massage spa involves several recurring expenses:

• Cost of Goods Sold (COGS): 5-10% of revenue, covering consumables like oils and lotions.
• Salaries: 25-50% of revenue, including wages and benefits for therapists and staff.
• Marketing: 1-5% of revenue, for client acquisition and retention.
• Facilities: 15-20% of revenue, covering rent, utilities, and maintenance.
• Other Operating Costs: 5-10% of revenue, for miscellaneous expenses.

Profitability Analysis

Here’s an overview of the financials for a typical massage spa:

• Gross Revenue: $1,112,000
• COGS: $100,080
• Gross Profit: $1,011,920
• Labor Expenses: $333,600
• Marketing: $55,600
• Facilities: $189,040
• Other Operating Costs: $88,960
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): $344,720

The EBITDA margin of around 31% indicates a healthy level of profitability, with significant margins after covering essential operating costs.

Understanding how much does massage business makes involves looking at various financial factors, from startup costs to ongoing operating expenses. With the right approach and careful management, a massage spa can be a highly profitable venture.

Whether considering a franchise or starting an independent spa, having a clear picture of potential earnings and expenses is crucial for success in the massage industry.