Industry • Best Practice
Apr.25,2022By Boulevard Staff
Planning is everything when it comes to opening any new business. For prospective medSpa owners, there are even more considerations.
From special licensing to HIPAA requirements, there are many things to think about. To help you focus this article provides a comprehensive medical spa business plan checklist.
Let’s get started.
The cornerstone of any medical spa business plan is a clear, data-based articulation of the commercial opportunity. To do this right, you need to have answers to the following fundamental questions:
What market problem is your spa going to solve?
How are you going to solve that problem?
Who is your target market?
Who is your competition?
What advantages do you have over your competition?
As you do the research, calculations, and soul-searching necessary to answer these questions, you must prioritize honesty. It’s easy to overestimate the market size, the effectiveness of your solution, or your superiority to your competitors, but fudging the numbers in your favor won’t get you anywhere. As good as it feels to feel good about your chances, it’s going to take a lot more than positive vibes for you to succeed in the wellness industry.
That doesn’t mean you should abandon optimism. It does mean that you need to make an effort to balance your natural enthusiasm with the strategic use of skepticism.
If that kind of thing is challenging for you, then enlist the help of a partner that has a more glass-half-empty disposition. You’ll probably fight with them now, but you’ll be thanking them later.
With the business opportunity out of the way, it’s time to flesh out your promotional and sales plan. While it’s not possible to know exactly what will work for your business at the outset — especially when it comes to marketing — don’t turn that uncertainty into an excuse for not doing your due diligence.
Your marketing plan should outline your overall strategy, messaging, channels, buyer’s journey, and more. Just writing “social media” or “digital marketing” won’t cut it here. It’s 2022: Everyone uses digital marketing and social media. Force yourself to be specific. It will significantly increase your chances of starting on a good foot. For some help, consider reading our article on developing a spa marketing plan.
Your sales plan needs to explain how you will transform the leads your marketing creates into loyal customers. What sales approach are you going to use? Are you going to leverage a CRM? How are you going to use email? To nail this part of your medical spa business plan, you have to think through how you will approach each step in the conversion process.
Now it’s time to detail the physical characteristics of your new business. The operations section of your medical spa business plan will describe your facilities, outline the complete tech requirements, and list every major piece of equipment you’ll need to keep the lights on and the customers happy.
Facilities: This includes the characteristic of a good location, the space range you’ll need to run your business, what kind of parking situation you want, and more. In general, the purpose of this part of the plan is to be a framework for evaluating potential locations, so you don’t need to be ultra-detailed. But you do need to identify the essentials of a good spot — and note any red flags.
Technology: This is an exhaustive description of your technology requirements, covering your overall IT infrastructure, entertainment systems, patent documentation platforms, spa management software, payment and POS systems, and treatment technology. That last category includes the devices needed for body contouring, laser hair removal, chemical peels, botox injections, dermal fillers, microdermabrasion treatment, etc.
Additional Equipment: Isn’t that everything? Not quite. You also need to create a list of all furniture you’ll need for your business, from lobby chairs to specialized spa beds.
Sure, your medical spa will be built on good client relationships. But business is also a numbers game, which means you will need to get your financials in line if you want to succeed.
Financial statements: You’ll need to create three critical financial documents: an income statement, a cash flow statement, and a balance sheet. The income statement allows you to understand your gross revenues versus expenses. Your cash flow statement breaks out your business’s financial needs across time. Your balance sheet gives you a clear picture of what you own — your assets — versus what you owe — your liabilities. To create these forward-looking documents, you’re going to need to have realistic estimates of the money you’re going to make versus the money you’re going to spend.
Revenue projections: To make this calculation, you need to multiply your expected average total service price times your projected capacity, something which you should assume to be quite low at first. To ground your earnings numbers in reality, it might also be helpful to look up the average medical spa revenue and profit margin. According to recent research, the average medical spa revenue is around $1.6M, and the average profit margin is 38%.
Expense projections: While estimating the revenues can be a somewhat enjoyable exercise, few people like to break out a calculator to add up all their expenses — but that’s just what you’ll have to do. This means tallying what it’s going to cost you to provide your services, advertise, pay your employees, take care of waste, manage inventory, handle insurance requirements, and more. You also want to break these expenses into fixed and variable categories — this will help you understand what line items to watch.
Although much of what we’ve covered above pertains to businesses in general, there are quite a few medspa-specific considerations that need to go into your business plan. Because you’re technically providing a medical service to your clients, your business will need to comply with a unique set of legal requirements. First and foremost, you must consult a lawyer. They’ll make sure you get this right — and you can’t afford to get it wrong.
That said, there are three areas you will need to keep in mind: licensing, HIPAA requirements, and payroll structuring.
Licencing: The specific licensing requirements vary according to the state you’re in and the treatments you offer, but some general boxes need ticking. To run a medical spa in the US, you need to be either a licensed physician or a physician-owned business.
HIPAA requirements: To ensure your medical spa protects the medical privacy of your clients, your entire staff needs to be regularly trained on HIPAA compliance. You should also schedule a thorough HIPAA Security Risk Assessment, something you can either run with your team or hire a consultant to perform.
Payroll structuring: Unlike standard spas, medical spas cannot pay their nurses and support staff the same way. Due to medical law, these businesses need to use multiple payroll structures to deliver employee salaries.
We know: It’s a huge list. But we also know that if you’re reading this post, you’re doing the work, and if you the kind of person who does the work, you’re also the kind of person who can run a successful medical spa.
Boulevard was built to help your business achieve profitability at scale without losing an inch of sanity. See for yourself! Get a free demo today.