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How to Start a Spa or Salon in OntarioLast Verified:
2006-04-10
The Canada-Ontario Business Service Centre (COBSC) in collaboration with the Ministry of Government Services (MGS) prepared this guide to provide information on license, permit or registration requirements when considering the establishment of a Spa or Salon Business in Ontario. Need more information? Click: Canada-Ontario Business Service Centre Some of the organizations listed below are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages. TABLE OF CONTENTS1. Basics To Getting StartedStarting a business can be a rewarding undertaking, but it comes with its challenges. Before starting a business in Ontario, it is wise to do your research. Ask yourself if you are truly suited for entrepreneurship and understand that significant effort may be required. You should thoroughly enjoy the field you are getting into and you must believe in your service; it may consume much of your time, especially in the start-up phase. There are several issues to consider such as regulations, financing, taxation, managing your business, advertising and much more. For further information: 2. Industry OverviewPersonal care providers, which include hair and esthetic salons, spas and the like, accounted for about 43% of the industry's total earnings. These establishments earned about $3.5 billion in 2003, up from $3.2 billion in 2002 and $2.9 billion in 2001. The Spa and Esthetics industry in Canada is experiencing tremendous growth. According to the ISPA 2004 Spa Industry Study it was estimated that there were approximately 2,100 individual spas in Canada. Over 40% of Canada 's spas are located in Ontario, followed by 19% of the spas located in British Columbia. For 2003 the average number of spa visits was 20.2 million. In 2003, the Canadian spa industry employed an estimated 33,200 people; 20,442 full time, 7,075 part-time and 5,673 contract staff. The driving force behind the tremendous growth is raising consumer demand. Primarily the aging "Baby Boomers", the largest single generation in the history of mankind is driving this growth. The Boomers are now entering there 40's and 50's and are willing to spend whatever it takes to preserve their youthful looks and to prevent premature aging. As a result Esthetics is a profession that is growing rapidly-not just in North America but also worldwide- and skilled, reliable, well-educated Professional Estheticians are in high demand. The importance of an attractive personal appearance is recognized more than ever in the world today. For further information: Types of OperationIn establishing a beauty salon, the range of services to offer may vary. You can choose to cut hair only, or may choose to include other services like nail care and skin care (facials and make-up, hair removal). Some even offer sun tanning, sell some products or have a spa in their beauty salon. The steps for opening a beauty salon are the same for one service as they are for many services. There are many different kinds of personal care service businesses. The following are examples of such services: Beauty Salons are establishments primarily engaged in providing hair care services to women, providing esthetic services such as manicures and pedicures, makeup applications, facials and skin treatments, hair removal or a combination of these services. Unisex Hair Salons are establishments primarily engaged in cutting and styling men’s or women’s hair. Establishments that combine hair care services for men or women and esthetic services. Other Personal Care Services include establishments primarily engaged in providing personal care services. Colour consultants, estheticians and tanning salons are considered part of this group. Massage or massotherapy is the manipulation of muscle and connective tissue to enhance function of those tissues and promote relaxation and well-being. Before opening your business, you will also have to decide which type of operation you would like. You may choose to operate your business under a franchise or as a non-franchise. If you choose a franchise, you have to follow directives from the parent company and go with the options they offer for types of services, products, etc. FranchiseAs a potential business owner, you may be considering buying an existing or opening a new franchised business. As a franchisee, you enjoy the benefits of "Goodwill" that the name and reputation of the franchise already possesses. You also have, in many cases, the support of the parent company in issues such as location selection, management training, free advertising and support during the start-up phase of your operation. Also you have the advantage of capitalizing on an already profitable concept. However, as a franchisee, you must pay the franchisor for the benefits provided, and these costs come off the top of your sales revenue and may add up to more than 10%. Also your freedom is somewhat restricted when you own a franchise. You must adhere to the standards set by the franchise. For further information: Planning Your BusinessWhat is a Business Plan?A business plan is a recognized management tool used by successful and/or prospective businesses of all sizes to document business objectives and to propose how these objectives will be attained within a specific period of time. It is a written document, which describes who you are, what you plan to achieve, where your business will be located, when you expect to get under way, and how you will overcome the risks involved and provide the returns anticipated. Why Do I Need One?A business plan will provide information of your proposed venture to lenders, investors, and suppliers to demonstrate how you plan to use their money, and to establish a basis for credibility of your project. This plan will serve as a guide to the various areas that you as a manager will be concerned with. As you work through this plan, adapt it to your own particular needs. For further information: Interactive Business Planner (IBP)The IBP is a computer software program that uses the capabilities of the Internet to assist you in preparing a 3-year business plan for a new or existing business. The IBP will help you write your business plan, provide a format for writing your business plan, and take the information you enter and prepare financial projections for you. For further information: 3. RegulationsLicenses, Permits, and RegulationsOne area of rules and regulations that all new businesses must comply with is that of licenses, permits and regulations. When creating a business, the entrepreneur must contact the municipality involved, along with the provincial/territorial and federal governments. Each municipal government has the authority to issue its own business licenses within its jurisdiction. You should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses (including home-based businesses) must also meet the zoning by-laws that control property uses in their municipalities. Examples of licenses, permits and regulations that could apply to you when starting your beauty, aesthetics or tanning salon, or barber shop, may include, but are not limited to: Building permitsThe Building and Development Branch administers the Building Code Act (BCA) and the Ontario Building Code (OBC). These codes govern the construction of new buildings as well as the renovation and maintenance of existing buildings. For information on your organizations specific requirements please contact the Building and Development Branch of the Ministry of Municipal Affairs and Housing. For further information: Vendor PermitsIndividuals and companies who sell goods or services that are taxable under the Ontario retail sales tax require a vendor permit. Retail sales tax is also referred to as "provincial sales tax" or "PST") For further information: Municipal RegulationsEach municipal government has the authority to issue its own business licenses within its jurisdiction. Since there is no uniformity throughout Ontario regarding municipal licenses for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses must also meet the zoning by-laws that control property uses in their municipalities. For further information: Music licencePerformances of music in public, i.e. offices, stores, etc., require a licence. This licence is necessary whether the music is performed by live or recorded means. For further information: Personal Information Protection and Electronic Documents ActThe Personal Information Protection and Electronic Documents (PIPED) Act sets out ground rules for how private sector organizations may collect, use or disclose personal information in the course of commercial activities. Since January 1, 2002, the personal health information collected, used or disclosed by these organizations is also covered. For further information: Tanning SalonsHealth Canada regulations specify requirements for tanning equipment. A summary of the federal Radiation Emitting Devices Act and Radiation Emitting Devices Regulations for tanning equipment is available from the website. For further information: Massage TherapyThe Massage Therapy Act (1991) is enforced by the government of Ontario’s Ministry of Health and Long Term Care which regulates requirements for massage therapy. For further information: The Smoke-Free Ontario ActAs of May 31, 2006, the Ontario government is prohibiting smoking in all enclosed workplaces and enclosed public places. The legislation will also strengthen measures to ensure only those 19 years of age and older can buy cigarettes and will phase out the display of tobacco products, with a complete ban beginning May 31, 2008. For further information: Other Regulations and RequirementsHealth regulations and requirements Cosmetic Regulations Food and Drugs Act Cosmetic Program and Regulations Radiation Emitting Devices Act 4. FinancingThe Canada-Ontario Business Service Centre has created documents, which provide an overview of some of the main financing options for individuals starting and operating a business in Ontario, including programs offered or supported by the government For further information: Canada Small Business Financing ProgramBusiness Financing Program can assist new and existing small businesses with annual gross revenues not exceeding $5 million (excluding farming and charitable or religious enterprises) in obtaining term loans and capital leases of up to $250 000 to help finance fixed asset needs. For further information : Sources of FinancingSources of Financing is an Internet resource for locating traditional and alternative sources of small business financing. This site provides interactive access to objective information on appropriate forms of public and private sector sources of debt and equity financing: For further information: Sources of Micro-Credit Financing"Micro-credit" can be defined as small loans made to individuals to undertake self-employment or to start small businesses. This type of financing may be provided through a number of different sources including independent non-profit organizations, community economic development programs, commercial financial institutions, etc. For further information: 5. Managing Your OperationTaxesDealing with Business TaxesAll businesses must be aware of the various taxes that may apply to their product or service. Depending on the type and location of products or services being offered, federal, provincial and/or municipal business taxes may apply. For further information: Income Tax InformationBusiness owners must be aware of the requirements of Income tax that may apply to their product or service. There are different tax implications for incorporated and non-incorporated businesses. For information specific to your organization you should consult an accountant or financial professional. For further information: Apprenticeship Training Tax Credit (ATTC)This refundable tax credit is available for employers operating unincorporated businesses which employ apprentices in certain skilled trades during the first 36 months of an apprenticeship program. For further information: Below are links to publications that cover some of the general tax requirements for business owners in Ontario. Ontario Small Business GuideThis booklet will guide you through various aspects of Retail Sales Tax, Corporations Tax and Employer Health Tax. This booklet also answers some of the frequently asked questions of small business owners regarding tax obligations. EHT Guide for EmployersDescribes the main features of the EHT, including taxpayer rights and responsibilities under the Employer Health Tax Act. For further information: Retention/Destruction of Books & RecordsExplains the retention period required for Ontario tax purposes, before books and records can be destroyed. Voluntary DisclosureExplains what voluntary compliance is and the basic principles under which Ontario's tax system operates. InsuranceInsurance needs for businesses vary greatly. It is best to choose an insurance agent or broker familiar with your size of business and, in particular, an agent familiar with your type of operation. If you don't have an insurance agent, consider asking other business owners in your area to recommend one. The following list is included to remind you not to overlook the complex areas of business insurance. It is best, however, to discuss your specific requirements with your insurance agent. Basic insurance:
Marketing/AdvertisingWord-of-mouth advertising and good public relations are often the best ways of promoting your business. Depending on your market and its size, also consider flyers, business cards, brochures, newspapers (especially for holiday promotions), radio, TV, the phone book and the Internet. Also bear in mind that a satisfied customer is good advertising. Referrals are also a valuable way of making customers aware of your products or services. A Web site is also a good marketing tool. It should have details to describe the location (your address, telephone and fax numbers, and directions on how to get to your establishment), hours of operation, services offered, credentials and anything else you think may be of interest to potential customers. However, once you launch a Web site, you should update it on a regular basis. Participating in community events is another way of advertising your business. You may also hold events that will promote your business. No matter how you choose to market your business, it is wise to track how your clients became aware of your establishment - this may help determine your future advertising strategies. For further information: The Online Small Business Workshop - The Marketing Basics section covers the basics from developing your customer profile to promoting your business. For further information: The federal Competition Act governs misleading advertising and deceptive marketing practices for most businesses in Canada. The Act defines which marketing practices are illegal and the process of complaint investigation. For further information: Market ResearchSuccessful businesses have extensive knowledge about their customers and their competitors. Acquiring accurate and specific information about your customers and competitors is a critical first step in market investigation and development of a marketing plan. In developing a marketing plan, your primary functions are to understand the needs and desires of your customer, select or develop a product or service that will meet customer needs, develop promotional material, and ensure that the product or service can be provided effectively at a profit. For further information: Selecting Professional ServicesThe use of professional services is essential to the success of a small business. Professionals can provide knowledge and expertise in the areas where you may have little. They can round out your management team to ensure your business is operating efficiently. Professional services often used by entrepreneurs may include:
For further information: Accounting/BookkeepingA good record keeping system should be simple to use, easy to understand, reliable, accurate, consistent and designed to provide information on a timely basis. Note: All staff working with cash should be trained to recognize counterfeit currency. Setting-Up a Pay SystemPay administration is a management tool that enables you to control personnel cost, increase employee morale, and reduce workforce turnover. For further information: Setting the Right PriceSetting the right price can influence what consumers will buy, which in turn affects total revenue and profit. In the end, the right price for the product/service is the price that the consumer is willing to pay for it. Hence, correct pricing decisions are a key to successful management. For further information: Profit WatchingMaking a profit is the most important -- some might say the only objective of a business. Profit measures success. It can be defined simply: revenues - expenses = profit. So, to increase profits, you must raise revenues, lower expenses, or both. To make improvements, you must know what's really going on financially at all times. For further information: Employing peopleWhat are the rules on working conditions in Ontario?The Employment Standards Branch of the Ontario Ministry of Labour is responsible for the administration and enforcement of the Employment Standards Act, which provides for minimum terms and conditions of employment in most industries. For further information: Certification and trainingStaff TrainingSome of your staff might need to register with a provincial and territorial Apprenticeship Program . This means, that after completion of specific training, the employee will need to acquire a number of hours of "on-the-job experience" before getting a certification. Apprenticeship programs are generally administered by provincial and territorial departments responsible for education, labour and training (under the direction of the provincial or territorial Director of Apprenticeship) with authority delegated from the legislation in each province and territory. Staff may need to acquire a "Red Seal". A "Red Seal" allows qualified tradespersons to practice the trade in any province or territory in Canada where the trade is designated without having to write further examinations. For further information: Besides attending schools and professional training courses, much can be learned through on-the-job training and by attending conferences. Staff training can be provided through seminars, styling contests or trade shows. It might also help to maintain a library of resource materials such as magazines on latest trends or products, and health research for tanning salons. Offer training for your staff in: first aid, injury prevention and sales techniques. College of Massage Therapists of OntarioThe College is dedicated to excellence in protecting the public, serving its members, and promoting the highest possible quality of the practice of massage therapy in a safe and ethical manner. For further information: Massage Therapy Program StandardThe Ministry of Training, Colleges and Universities (MTCU) should be contacted to determine any regulations presently governing this trade. For further information: Internationally Trained Massage TherapistsTo practice massage therapy in Ontario, you must obtain a Certificate of Registration from the College of Massage Therapists of Ontario (the College). The College under the Massage Therapy Act and the Regulated Health Professions Act sets all registration requirements. You cannot practice as a massage therapist unless you are registered with the College. Only the College of Massage Therapists, the provincial regulatory body, can register Massage Therapists. For further information: Elmcrest CollegeEstablished in 1976 this college provides training in courses such as Massage Therapy, Esthetics and Spa Management. For further information: Choosing Your LocationProviders of personal care services may be home-based, practice from an office or spa-like environment, or take their business directly to the client at their home or office (for example, chair massages in the workplace); or even a combination of these. Public Place (e.g., salon or spa)A commercial establishment offering a product or service. The benefits of owning such an establishment may include a wider scope of advertising, the possibility of offering numerous specialized services at one location, the sharing of overhead and advertising costs. Home-Based BusinessA business operated out of your home may be an approach to try out an idea at as minimal cost as possible to see how the idea develops. There are still steps to take and regulations to follow; a list of pros and cons should be written down and considered for each situation. On-site (or mobile)Some stylists, whether they work with make-up, hair, nails or other personal services, may enjoy the on-site environment of working at such places as photo studios, old-age homes/hospitals, theatres, TV or film sets, modeling runways or home parties. For further information: Furnishings and EquipmentBefore you open your business, you may need specialized equipment. The kind of service you are offering will determine the type of equipment you will require. For assistance in this area, you may get the advice of a sales representative or consult trade publications and manufacturers' Web sites. List that equipment and its cost to you. An important factor to consider when choosing equipment is the after-sales service and repair and their affordability. Used Equipment - Consider buying used equipment as a cost-saving measure. Sources of used equipment could be similar businesses that are closing or dealers in second-hand equipment. The drawback to this approach is that, often, there are no guarantees with the purchase. Leasing Equipment - Another alternative is to lease equipment to help keep start-up costs down. For further information: 6. AssociationsExamples of associations include, but are not limited to: Canadian Federation of AromatherapistsThe Canadian Federation of Aromatherapists (CFA) is a voluntary federally chartered, non-profit association) Canadian Network of Make-up ArtistsCNoMA focuses on advanced education, award recognition and networking opportunities for industry professionals. Canadian Society of Professional Skin Care Specialists - CIDESCOAllows estheticians the opportunity to exchange experiences with their colleagues in other countries http://www.cidesco.com/index.php?menu=1 IMA Group, Inc.IMA Group provides its members with access to various divisions according to modality(ies), a free referral service, business-building advice, same-day processing for all products and services and live, friendly customer support. http://www.imagroup.com/ Leading Spas Of CanadaA national organization working together through member services, professional development, education and marketing to The Leading Spas of Canada as an international Spa Destination. The Canadian Cosmetics Careers AssociationThe Canadian Cosmetics Careers Association is a non-profit, federally incorporated organization that was established for the purpose of furthering professional development through association, servicing the individual and the cosmetics industry. For further information: Allied Beauty AssociationIs a trade association of manufacturers and distributors of professional beauty products and equipment for the use of beauty salons and spas. Canadian Cosmetic, Toiletry and Fragrance AssociationThe Association is the leading Canadian trade association for the personal care products industry. One of the Association's primary goals is to establish and maintain an optimum business environment that promotes Canadian industry's global competitiveness through freedom from unnecessary regulation. http://www.cctfa.ca/en/cctfa/index.htm Esthétique SPA InternationalThe largest and most prominent esthetics and spa events organizer in Canada regarding the following specialties: aesthetics, electrolysis, body care, hydrotherapy, balneotherapy, thalassotherapy, pressotherapy, massage therapy, lymphatic drainage, phytotherapy, aromatherapy, make-up, pedicure, manicure, and nail technique. International Spa AssociationThe International SPA Association is a worldwide community of spa professionals, product manufacturers and service providers. Federation of Canadian Electrolysis AssociationsDedicated to promoting professionalism and education in permanent hair removal. 7. Resources and Web Sites of InterestCanadian Dermatology AssociationThis association has a Sun Awareness Program which provides information to the public about how to prevent sun damage and diseases. Work Destinations: A Guide to Work and Relocation in CanadaThe Work Destinations Website is a comprehensive source of information on regulated trades and professions in Canada. It contains information on entry requirements in both official languages and is the only site designed primarily for professional or trades people moving within Canada. For further information: Related PublicationsOntario public libraries provide a variety of business information and services. Reference materials, online information databases, CD-ROM and other format material as well as standard business information such as books, newspaper and journal articles and business directories are available to the general public, including small businesses, entrepreneurs, career-changers and job seekers. Workstations provide public Internet access to business information from Web sites and access to government electronic information and services of interest to business. Most information and services available at the public library are free of charge. You may find books, magazines and other relevant print material at any Canada Business service centre and/or business service organizations in your community that provide Canada Business information. Contact the Canada Business service centre in your region for the location nearest you. Guidelines for Tanning Salon Owners, Operators and UsersThis guide is designed to give tanning salon owners, operators and users of tanning equipment a fundamental understanding of ultraviolet radiation and its effects on people. For further information: Infection Prevention and Control Practices for Personal Services: Tattooing, Ear/Body Piercing, and ElectrolysisThe purpose of the guidelines is to describe infection prevention and control practices for personal services, including tattooing, ear/body piercing, and electrolysis. For further information: Spa Canada MagazineSpa Canada Magazine is a nationally distributed publication, which keeps trade professionals up to date on various aspects of the Aesthetic, Fitness, and Spa industries. Informative articles on Management, Wellness, Esthetics, Aromatherapy, Hydrotherapy, Massage therapy, Spa Environment, Nutrition, Cosmetics, Spa profiles, and others are highlighted. StatisticsLeading Spas of CanadaThe Leading Spas of Canada first ever Canadian Spa Industry and Consumer Research Survey. Conducted by Dr. Mary Tabacchi, Cornell University, this 2003 study profiles the Canadian spa consumer, the Canadian spa product and services of day spas and destination/resort spas. For further information:
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