By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)
There’s more to how to open a medical spa than just being an excellent medical aesthetic practitioner. Of course that is important, but there are basic business and legal compliance steps you also need to take to make sure you are successful in the long term. In 2017, we at the American Medical Spa Association (AmSpa) educated more than 300 medical aesthetic professionals on business and legal best-practices in the industry, approximately 70% of whom were just getting into non-invasive medical aesthetics.
When you’re starting out in the medical aesthetic business, it can seem like you need to learn about an overwhelming number of concepts, from effective retail strategy to regulatory compliance. Attending an AmSpa Medical Spa & Aesthetic Boot Camp can be extremely advantageous, because you can obtain a great deal of information in a short period of time. Here are previews of three very general things you need to do when you open a medical spa (you can learn more about each one at a Boot Camp near you.)
1. Draft a business plan
Business plans can be a real pain to create, but they are an important exercise. Creating a business plan requires you to think critically about details, such as:
• What your marketing strategy is going to be;
• What your market is going to be;
• Who your typical customers are going to be—how much do they make, are they male or female, how old are they, etc.;
• Where you’re going to be located;
• What your brand is going to look like;
• What the customer experience is going to be;
• How much money you have;
• How much money you’re going to spend;
• And so forth.
When you do this and then build it out for three to five years with a budget in a pro forma format, it gives you a good idea of how much money you’re going to need in order to actually operate your medical spa before you profit.
For guidance, see the comprehensive medical spa business plan template available in the AmSpa store.
2. Work with an accountant or financial planner
When people start businesses, they often don’t know how to read and understand financial reports. Even I came up short in this regard when I started my first business. However, it is crucial that you learn how to do this. You need to know what a profit-and-loss statement is (a P&L), what a balance sheet is and how to make a proper budget, as well as understand what different metrics mean so that you can track your progress, make informed decisions, and plan for the future.
I tend to think that most entrepreneurs are just winging it, and sometimes that’s okay, but often it ends up leading to real disaster. Therefore, it’s vital that you get a grip on this aspect of your practice, generally by consulting with someone who has specialized training in business finance. An accountant or financial planner certainly can help with that.
3. Consult with a local health care corporate attorney
A local health care attorney will help you understand the regulatory issues facing medical spas. I am a lawyer, so you might view this as somewhat self-serving, but the truth of the matter is that medical spas are running afoul of regulatory agencies more and more, as we’ve highlighted in this space in recent weeks, so it is a very real issue. You’ll end up spending far more money fixing problems that you create by doing things incorrectly than you will if you first engage a lawyer who knows what he or she is doing.
As a rule of thumb, you should expect to spend $15,000 to $20,000 in legal and accounting fees during your medical spa’s first year in existence. That will go toward creating the company, ensuring that you’re compliant, creating contracts, creating consent forms, establishing standard operating procedures, and so forth.
You can learn more about these and many other topics at AmSpa’s Medical Spa & Aesthetic Boot Camps. Click here to learn more about how you can join us at a Boot Camp this year.