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How to Open a Successful Medical Spa

Medical Spas are a $15 billion dollar industry and are growing at an exponential rate. The industry is expected to reach $25.9 billion by 2026, with the average established medspa generating $2 million annually.   

So, it makes perfect sense why so many practitioners want to transition from the hospital setting or their current practice (dentists, family physicians, dermatologists, etc.) to launch a medspa or why the idea is appealing to entrepreneurs.  

There are several factors driving the consumer market:  

  • The demand for minimally invasive cosmetic procedures 
  • Advances in technology, make these procedures safer and more effective
  • A population increasingly focused on wellness
  • Our aging population is looking for anti-aging and rejuvenation treatments
  • The younger generation starting cosmetic procedures and treatments in their 20s or even earlier
  • Rapid growth of the male market
  • The increased acceptance of non-invasive treatments as part of regular beauty maintenance. 

Launching without a strategic plan in place is like building a house without a solid foundation.

It’s easy to get lured in and want to hop on the med spa bandwagon but launching without a strategic plan in place is like building a house without a solid foundation. Doing things correctly from the start and investing in experts to help with the practical and tactical aspects will save you time and money, as well as prevent you from making costly mistakes.

Are You Ready to Open a Medspa?

If you’re like most people considering starting a medspa, you have a vision in your mind of what your business will look like. Vision and passion are necessary, but strategically planning to make that vision a reality is another story.  Here are a few questions you should be asking yourself: 

  • Is my concept and vision feasible?  
  • Who's going to develop my Pro Forma?
  • What is the competitive landscape in my market?
  • How am I going to write a business plan?
  • How much capital am I going to need?
  • How am I going to get a bank loan? 
  • What are the startup costs required? 
  • Where do I want to locate my practice? 
  • How much space do I need?
  • How do I negotiate a lease?
  • How do I find the right architects/contractors/designers?
  • What services am I going to offer and what is the right mix? 
  • How am I going to price my services? 
  • Are they going to be profitable? 
  • How do I go about finding the right team?
  • How do I compensate my staff?
  • How will I train them? 

While this may seem completely overwhelming, don’t worry, our team at APX Platform is here to help walk you through the process. This is not an endeavor you should have to undertake on your own without expert advice and assistance.

The Three Key Phases 

As part of APX Platform’s Startup Medspa program, we have broken down the whole process into three phases with the exact blueprint and education you need so you can ditch the guesswork and get the framework to set yourself up for success.

Phase 1: Mission, Vision, and Competitive Analysis

The first phase of opening a medspa includes creating your practice’s mission and vision statements. Next comes conducting a feasibility study and competitive analysis to determine your target demographics, ideal client, and your unique value proposition.  

A feasibility study helps to define how many people in your target demographic (say women between 25 and 55 with household incomes of over $100K) exist in your market. Then you want to perform a competitive analysis to determine how many competitors are vying for that same market. So how many competitors are there, what is their target demographic, and what can you realistically expect your share of the “pie” to be?  

Next comes researching to determine your startup costs and how much capital you are going to need to open your doors. Most entrepreneurs grossly underestimate their startup costs if they try to do it themselves due to so many factors that are typically unaccounted for. 

Once you have calculated your startup costs, you must complete a Pro Forma. A Pro Forma is all the financial statements (assets and liabilities in the balance sheet, profit & loss statement, revenue cycles, expenditure cycles, and follows the money in and out for your cash flow. The Pro Forma also considers marketing costs, labor costs, and general and admin costs.  After creating the Pro Forma, you can determine your EBITDA (earnings before interest, taxes, depreciation, and amortization). This is important for securing a loan and this is what private equity looks for when considering a purchase.  

It is also vital in phase one to determine the right mix of services you plan to offer and build out your revenue per hour and profit per treatment based on assumptions in your Pro Forma. You want to ensure what you are offering yields the most profit.  This may not look like what you had in your initial vision.  

Then you must create a budget and forecast for the first year. A forecast is revenue minus expenses, but it does not take debt into account. For example, if you have a loan payment of $5,000 per month, that is not going to show up on your Profit and Loss statement.  

Finally, you need to develop a comprehensive business plan. This is very important if you are trying to secure a loan. We strongly encourage you not to buy a generic template online, but to work with experts in the aesthetic space to develop your business plan.  

The APX Platform features all the financial calculators, education, and training you need to help determine your startup costs. 

Phase 2: Loan, Site, and Design

Phase two involves procuring your loan, selecting your site, and designing/building out your space. You’ll need to hire a commercial broker and negotiate a lease or purchase. You’ll also need to hire architects, come up with a building timeline, and hire a general contractor for construction oversight as well as designers, decorators, etc.  

This phase may sound more simple than the rest, and perhaps more exciting as your vision really starts to take shape. But there are many decisions to be made during this phase that can drastically affect the future of your medspa. As part of the APX Platform’s Startup Medspa program, you'll have access to expert guidance with years of experience starting up hundreds of successful medical spas. But don't worry, we’ve got you covered and can help you save money from very costly mistakes.

Phase 3: Implementation

The third phase is all about implementation, which means everything you must do until you open your doors. The implementation phase starts about 90 days before you open, and there should be milestones starting at 90-, 60-, and 30 days pre-opening.  Here are just a few of the tasks that should be done in this phase:  

  • Securing legal, accounting, and insurance services 
  • Creating an SEO-optimized website for lead generation, social media channels, and a marketing plan
  • Pre-launch planning and execution
  • Select your software for accounting, patient communication, practice management, and EMR (electronic medical records). 
  • Purchasing or leasing equipment to support your treatments/procedures you plan to offer and supplies you need as well as determining any retail lines you plan to sell. 
  • Human resources tasks such as recruiting, hiring, onboarding, and training your new team.
  • Setting up operational and clinical systems. 
  • Inviting vendors to conduct training. 
  • Finally, you want to plan your launch event.   

This is just a broad overview, but as you can see, a profitable medspa is more than just a "build it and they will come" scenario. It requires careful planning and execution to reach success.

To help you on your journey, we have put together a guide for the "Top 7 Mistakes to Avoid When Launching a Medspa", based on our team at APX Platform powered by Engage Technologies Group’s combined 60+ years of knowledge and expertise. Download the free guide below.

 

Download This FREE E-Book Today

Top 15 Mistakes to Avoid When Starting a Medical Spa

As always, our team is here to help answer any questions you may have regarding starting a new medical spa. We have simplified the process and developed a comprehensive  “How to Start Your Own Multi-Million Dollar Aesthetic Practice: 6 Month Incubator Program” that provides you with the EXACT blueprint of everything you need to know to launch a successful aesthetic practice — without any “guesswork” involved and at the fraction of the cost of hiring an expert private consultant. To book a discovery call, learn more or to apply, simply click the button below.