How To Open A Medical Spa Business

The medical spa industry is a growing field in the personal care and medicine sector. According to the American Med Spa Association, a medspa is a hybrid between a medical center that offers aesthetic treatments and a day spa. Opening a medical spa means offering a unique selling proposition that falls between providing a relaxing day spa experience and adhering to the high ethical and legal standards of a medical practice.

It can take longer to learn how to open a medical spa than it would to open a day spa or medical clinic. Meeting the requirements of each side of the practice is essential. In this article, you’ll get an overview of the essential elements of opening a medspa and a step-by-step guide to getting started.

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Start with the business essentials

Before you take any major steps, sit down and lay out a sketch of everything you need to open a medical spa. If you have owned any kind of business in the past, this will be familiar territory. You can start by breaking down the necessities into key groups like:

Services: What services will you offer? What are the regulations around each of these treatments? What rates will you charge? Are any covered by medical insurance?
People: Who will perform treatments in your medspa? By definition, a medspa needs to be overseen by a physician, but a doctor won’t necessarily perform every treatment. Other licensed professionals, like nurses, may also provide direct patient care. If you plan to provide services yourself, identify what other personnel you need. Receptionists, office managers, and aestheticians are all possibilities.
Back office services: After you identify patient-focused services and personnel, think about who will manage your back office. You can have an in-clinic financial or HR manager and rely on staff to keep the clinic tidy. You may also want to outsource these tasks to external accounting, payroll, and cleaning services.
Business assets: Outline what assets the business holds. Include any items you own and will donate to the business, like medical and office equipment. Whenever you have to buy business equipment, be sure to record its cost.
Legal and insurance: Make a list of the business licenses you need to operate. You will most likely need a business license and additional certifications in order to run your business legally.
Location: If you do not own office space, estimate your lease costs for the area where you want to set up your practice.

Of course, this is just the beginning. Keep these factors in mind as you formulate strategies for how to open a medical spa, budgeting for startup costs, and achieving regulatory compliance.

Find the right location

People are often willing to travel significant distances to visit their preferred caregivers. The surrounding neighborhood is less of a concern than the quality of care and the professionals that practice inside the clinic. A day spa is more experiential. While what happens inside still outweighs the surrounding businesses, aesthetics matter. A high-quality spa might be more successful if it has a view of an oceanfront than a skyscraper.

Do your market research and assess your options thoroughly when deciding how to open a medspa and where to locate it. Consider these elements:

Client demographics: Can they drive to your location? If so, is there parking? Can they afford higher-priced treatments if you set up shop in a more expensive commercial location?
Legal regulations: Check your city by-laws about the types of businesses that can operate in your preferred location. You might be surprised to find that you’re excluded from a certain area because of zoning.
Space for equipment and professional consultation: Balance your clients’ ability to get to your clinic with your ability to practice. Carefully plan the activities that go on in the space before you sign a lease, so you know in advance whether you have enough room.

It’s fair to anticipate that you will start small and move to a new location when your medical spa expands, but changing location is a big hassle. It’s expensive, inconveniences clients, and can make it hard for people to find you in the interim. Better to get the right space from the beginning — as long as you can afford it.

Write a business plan

A business plan is an important — but flexible — document. A key benefit of writing a business plan is that it forces you to think through the financial aspects of your business, including your initial and ongoing operating budgets.

It requires that you look ahead to the next five years and envision how you see your medspa growing in terms of business model and scale. This is also a common prerequisite for obtaining business loans from banks or other lenders.

Some things you should include in your business plan:

Expenses: labor, equipment, operating, utilities, lease payments, taxes, and marketing
Revenue sources: medical treatments, spa treatments, aesthetic services, and product sales
Projected growth: revenue increases year-over-year and expense increases or decreases

If you need assistance, review online business plan templates. Try to look at spa business plans as well as health clinic plans so you can create a reasonable hybrid of both. As your business progresses, revisit your business plan. Update your projections as you need to so you can hone your strategy for how to open a medical spa and optimize it over time.

Important steps to follow

With your vision for opening a medspa in place, it’s time to get some tasks out of the way. One by one, they will bring you closer to operating a successful medical spa.

Step 1: Create a budget

Your business plan should contain a startup budget. This includes all the expenses you must cover to open your medspa. You should also create a second budget that projects a typical monthly operating expense and revenue breakdown. This will enable you to anticipate how much money you’ll make — or lose — in the first six to twelve months of operations.

Step 2: Obtain business banking

Set up bank accounts for your medspa at a financial institution. It is critical that all the financial records of the business flow through these — and not your personal — accounts. Your bank may also help you with startup funding. Make an appointment to speak with an advisor if you want to apply for a loan.

Step 3: Sign a lease

Secure your location as soon as possible so you can get to work creating the environment you want for your medspa. Seek legal advice if you don’t understand the terms of your lease agreement, especially if you plan to switch or add locations in the future.

Step 4: Finalize equipment purchases

Make sure you have access to the equipment you need to provide the services you advertise. If you’ve already started payment plan talks with an equipment supplier, ensure those negotiations are complete and that your equipment will be set up and ready for business by the time you open your doors.

Step 5: Get licensed

Get every license you need before you launch your medspa. Do this far enough in advance that license approvals come through in time for your opening.

Step 6: Get insured

You will need business insurance. The professionals on your staff will also need insurance, but most will already have that as a condition of being licensed to practice. Confirm that these policies exist and ensure there’s proper coverage for your kind of practice.

Step 7: Nail down personnel

Sign off on contracts with the doctors, nurses, and other professionals you need to competently run your business. Complete your hiring process ahead of time so you’re ready to launch with all essential team members.

Step 8: Renovate your space

When deciding how to open a medical spa, your physical location should be a priority. Be sure to allow time for this, as your new location may need a lot of work. Get in early to renovate the space so it functions as a spa. Depending on the size and extent of renovations, this may mean booking a contractor. Don’t leave this to the last minute, as you may find your preferred builders are booked or that your project experiences delays.

Step 9: Develop a marketing plan

Read up on how you can market your smaller business, speak with a marketing agency or stick with word of mouth to start. Doctors who work in your clinic part-time may drive business to your medspa through personal referrals.

Step 10: Hold a soft launch

At this point, you are not open to the public just yet, but you are ready to go. Consider holding a soft launch and use email marketing to invite a small group of people to preview the services and the overall medspa experience. Invitees might include professionals who can refer clients, beauty bloggers who can promote the medspa, and doctors who may want to partner with the practice in the future.

Step 11: Open your doors

The last step is to launch your business to the public. Start seeing clients and offering in-spa services. After your soft launch, you should have an idea of how your medspa will operate. That said, the first day always brings a few surprises. This is a crucial time to evaluate the customer experience and brainstorm ways to improve your medspa.