How to Start a Sauna Installation Business

Start a sauna installation business by following these 10 steps:

1. Plan your Sauna Installation Business
2. Form your Sauna Installation Business into a Legal Entity
3. Register your Sauna Installation Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Sauna Installation Business
6. Get the Necessary Permits & Licenses for your Sauna Installation Business
7. Get Sauna Installation Business Insurance
8. Define your Sauna Installation Business Brand
9. Create your Sauna Installation Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your sauna installation business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Sauna Installation Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a sauna installation business?

Expect to invest up to $250,000 to get your company up and running. Initial franchise fees often run from about $25,000 up to $50,000 depending on the area. You will need about $200,000 to be able to order the sauna kits, lighting, and accessories. In addition, you will need to invest in marketing and transportation before your income starts to roll in. If you wish to operate a storefront or a display in a big-box store, you may need an additional $10,000 to $100,000.

What are the ongoing expenses for a sauna installation business?

Marketing and sales will always be a major cost for the business. However, you must have financing in place to be able to purchase the sauna kits for delivery on the client's schedule. Expect to carry $100,000 to $200,000 in inventory at any given time.

Who is the target market?

Your preferred clients will mostly consist of wealthy homeowners and corporations. These homeowners will generally live in wealthy suburbs or urban areas, and they will have extra money to invest on upgrades to their homes. Corporate clients that operate multiple spas or exercise gyms such as office towers, hotels, and resorts will also look for you to install saunas into their spa and pool areas. Corporate clients with multiple locations can provide a more constant stream of business for your company.

How does a sauna installation business make money?

Your business will make money by charging your clients for the sauna and for the installation service that your provide.  Profit is made on the hourly rate charged for labor for the installation job. Minimal income is generated on sale of the sauna unit and a variety of accessories. New installations or upgrading existing units are the major source of income, as minimal maintenance is required for a sauna.

How much can you charge customers?

A typical sauna can be installed for as little as $3,000 while costs for larger units will can approach $25,000, depending on plumbing and electrical requirements.

How much profit can a sauna installation business make?

You will typically see a 10% profit on the cost of the sauna unit. Your real profit comes from installation fees. Experienced crews will complete the jobs faster, leaving more profit for the business. A successful sauna company can see net profits of $100,000 to $200,000 per year.

How can you make your business more profitable?

Time and consistent success will build your reputation as a reliable sauna installer. When your crew is kept busy installing units, and your marketing department continually shares your success stories, more interested customers will arrive and buy the next sauna, generating more profits.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your sauna installation business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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 sauna installation company. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

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.

Service Agreement

Sauna installation businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.

Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your sauna installation business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.

Certificate of Occupancy

A sauna installation company can be run out of a storefront. 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 office space:
• 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 sauna installation company.
• 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 office space:
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for you business’ location to ensure your sauna installation company will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

If you are passionate about the health benefits found after using a sauna, are a natural salesman, manager, and have some background in the construction industry, you may enjoy running a sauna installation business.

What happens during a typical day at a sauna installation business?

Though your level of involvement will differ based on the size of your team, the duties of a typical sauna installation business owner generally include:

• Providing sales information, installation costs, and time estimates to customers interested in your product
• Scheduling installation jobs and coordinating delivery of units and crews
• Working on installations yourself using construction, electrical and plumbing knowledge
• Working with customers on their sauna design, location and required size
• Receiving payments from customers and issue checks to suppliers
• Handling payroll responsibilities
• Hiring and training additional installation technicians
• Running a vendor booth at a trade show answering questions and generating sales leads
• Creating sales opportunities through networking within your community
• Maintaining proper licensing and liability insurance for a business that works in private homes and commercial locations.

What are some skills and experiences that will help you build a successful sauna installation business?

You are primarily selling the sauna experience and the units. However, other useful skills to operate your company will include:

• Basic accounting and business knowledge
• Excellent marketing, networking, and people skills
• Knowledge of the hiring process and payroll regulations
• Understanding building codes
• Knowledge of electrical design and function
• Basic knowledge of plumbing
• Simple construction experience
• Time management skills

What is the growth potential for a sauna installation business?

Your location will dictate the number of saunas you are able to sell and install. If you are located near a resort area, like near Florida beaches or near tourist attractions in Nevada, you will be able to grow your business much faster than if you work in a rural area. Before starting your business, it is imperative that you make sure there is enough of a market in your business’ area for you to make a profit.