Start a hot tub garden by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your hot tub garden. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a hot tub garden?
The startup expenses associated with opening a hot tub garden business are significant. They include:
First and last month’s rent for a commercial space
Build-out costs to make a space suitable for a hot tub garden
Hot tub installation costs
Hot tub chemical and equipment costs
High-end and luxury spas can cost between $9,000 and $18,000 each. When tallied with the other expenses, opening a hot tub garden can cost tens of thousands of dollars. It may even be a six-figure sum.
What are the ongoing expenses for a hot tub garden?
The ongoing expenses for a hot tub garden business are significant but manageable. The largest expenses are:
Rent for the business’ space
Energy costs for heating water
Chemical and other supply costs
Who is the target market?
A hot tub garden business’ ideal customers are people who want a private atmosphere, enjoy hot tubs, and have some discretionary income. Such people may be willing to pay a premium for access to a private hot tub, and they have the income needed to rent one. Most of your customers will be seeking a relaxing experience that they can share with close friends or family.
How does a hot tub garden make money?
A hot tub garden business makes money by renting its private hot tubs. Hot tubs are usually rented by the hour.
How much can you charge customers?
weekday afternoon rentals cost between $20 and $34 per hour
evening rentals Sunday through Thursday cost between $30 and $44 per hour
weekend rentals cost between $30 and $54 per hour
All of these rates are based on two people. Most businesses charge a small fee around $5.00 for each additional person.
How much profit can a hot tub garden make?
A hot tub garden business can bring in a significant revenue. For example, The Oasis’ location in Ann Arbor has 16 different private hot tubs. When all of them are rented on the weekend, the location can bring in $864 per hour.
It’s possible for a hot tub garden business to make thousands of dollars in one day. In a year, a successful business could have a high six-figure revenue.
How can you make your business more profitable?
A hot tub garden business can increase its profitability and attract more customers by adding additional services. A spa or tanning salon would be an appropriate addition.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your hot tub garden is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a hot tub garden business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A hot tub garden business is generally run out of a large space. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a hot tub garden business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your hot tub garden business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a hot tub garden
Hot tub garden business’ marketing efforts should focus on reaching people in the surrounding area who might want to rent a hot tub. Placing brochures in local businesses, running radio advertisements and creating social media ad campaigns may all be effective ways to market a hot tub garden.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Hot tub garden businesses can keep customer returning by enrolling them in a loyalty program that provides access to exclusive discounts. Customers who have come once will likely be interested in coming again, and a discount or special package can be the incentive they need to rent a hot tub again.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Hot Tub Garden In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
The ideal hot tub garden owner will be a believer in the relaxing, therapeutic potential of spending time in hot tubs. These people will be better able to promote the business, and they will be able to provide an even more satisfying experience to customers. Having basic mechanical skills will make troubleshooting any problems that arise with hot tubs easier. Being able to connect with people will help a business owner put customers at ease, so they can relax and enjoy their time in a hot tub.
What happens during a typical day at a hot tub garden?
Business owners’ time is largely divided between serving customers and cleaning hot tubs between customers. This involves welcoming customers, giving them towels, notifying customers their time has ended, cleaning towels, and sanitizing hot tubs. When not doing these things, business owners manage their employees, pay bills, and market their hot tub garden.
What are some skills and experiences that will help you build a successful hot tub garden?
A hot tub garden business owner must know how to clean, sanitize, and maintain hot tubs.
There are several organizations that offer training programs. The Association of Pool & Spa Professionals has online and regional training programs that cover hot tubs. The International Spa Association hosts several conferences each year, and there are several educational opportunities at these conferences. The National Swimming Pool Foundation’s Certified Pool/Spa Operator Program is a third option.
Whatever training businesses owners enroll in, they should make sure it specifically covers hot tubs. Working with hot tubs is different from maintaining pools.
In addition to taking a course on hot tubs, business owners may also want to buy a few books that cover hot tub cleaning, sanitization, and maintenance. Books serve as handy references when an issue arises. The Hot Tub Bible and The Ultimate Guide to Spas and Hot Tubs are two titles that cover these subjects.
What is the growth potential for a hot tub garden?
The hot tub garden business is a relatively new business model. For this reason, most businesses tend to be small. They have just one or no more than a few locations. For example, The Oasis Hot Tub Gardens has three locations in Michigan. Neptune’s Lagoons has one location in Anaheim, California.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a hot tub garden?
Many customers will be highly concerned with cleanliness. They’ll want to know that hot tubs are cleaned and sanitized in between each customer’s time in a tub.
Thus, hot tub garden businesses don’t just need to have a system in place for cleaning and sanitizing hot tubs between customers. They also need to communicate their system to customers so customers are confident in a business’ cleanliness standards.
The Oasis communicates this information well on their website. They explain how water is purified, what checks are in place and what inspections they go through. Business owners can follow a similar pattern by sharing this information on their business’ websites, over the phone with anyone who calls, and in person when guests ask.
How and when to build a team
Hot tub garden businesses need a team of employees from the outset. It’s not necessary to have lots of employees. At least a few employees should always be working, though. There are a few reasons to have several people available:
Hot tubs can be cleaned faster between customers
Employees are available to handle special requests from customers
An employee is able to address any problems that arise with hot tubs