There's always a buzz about the med spa industry about the trend towards consolidation. Investors are calling doors in search of a new investment. Small-scale entrepreneurs are selling their practices at prices they've never imagined. In spite of the traditional worries--like employees having to polish their resumes after the practice has been sold, there's actually potential for advancement and expansion.
Skytale Partner, Ben Hernandez has spoken to Skytale Partner, Ben Hernandez Nicole Chiaramonte, CEO, and Drew Fine, CCO, of Advanced MedAesthetic Partners about consolidation in the medical spa sector. Check out their comments here or watch the complete conversation on Skytale Insights podcast.
Updates and Trends in the Med Spa Market
Here's a quick statistic Some industries could be combined around 50%, while a large portion practice are part of conglomerates. In the field of med spas there's only about 5% or 6% of the consolidated.
There are many independent medical spas which manage every aspect of their business under one umbrella. However, the trend is toward consolidation. This means more M&A as well as more investment talks and more opportunities for small-business owners.
The market for aesthetics is growing at a rate of 10 percent to 15% each annual basis, making it extremely competitive. Why is this so? In the fields of health and wellness it's more typical to see growth as opposed in cutting expenses (unlike airline companies). Med spas are cash-paying and customers are eager to be in the area (unlike dental clinics or auto repair stores). They want providers to be there as well, since they're frequently leaving workplaces such as those of the ICU, ER, or OR and seeking more relaxed lines of work. Learn for more information about what's going on in the medical spa industry by 2023, and even beyond.
Nicole and Drew have this easy recipe for growing as a medical spa:
- Find a market that is great.
- You can stand out in a market.
Should You Sell Your Med Spa Practice?
The quick answer to the above question is: it all depends. In light of the recent intense consolidation, this idea is new for a lot of prospective sellers. Nicole suggests first determining the things you'd like to get out of your business and the direction you'd like to take it.
What are your main issues? Are you bored of managing the business aspects, such as hiring training, marketing, and hiring? Do you want to have a better balance between work and life? Are you thinking of laying on the sandy beach after 10 years in your newly purchased second property?
The pain points are often the cause of consolidation. When investors are brought in to assist with the nitty-gritty aspects of business things, it may make more space for you to pursue the things you enjoy doing. Make clear your goals with your Financial advisor or consultant investor, consultant, and anyone who is that is part of the deal. Every transaction can be made so that it aligns with your professional and personal objectives.
Preparing to Sell Your Aesthetics Business
Drew predicts that within 15 years, a lot of medical spa practices will become part of larger companies. This could lead to 40%-80 percent consolidation. A few of these companies may have different goals, such as regional centers or franchises. From technology to data providers must be at the top of their game with professionalism. Find out for more information about what customers are seeking in a medical spa.
In the final analysis, the only way to be successful is developing a solid habit. The rest will be taken care of by itself.
"You should be running your business as if you're ready to go to market," Nicole says. Nicole. "It means that everything from accounting, to how you're running the business on a day-to-day basis, your policies, your SOPs, are all in order."
She also encourages sellers to make investments in accounting and legal services ahead of time. It's cost less to get it right first time around as it is to tidy it up.
Finding the Right Fit When Selling Your Business
There's a lot of anxiety when you integrate an additional organization into your practice, whether it's an new investor or an existing financial partner such as Skytale. When discussing the partnership with an investor, Nicole as well as Drew prefer using the term "partner" instead of buyer and seller. Investors work with a practice due to the fact that it's well-run and has high potential. Investors want the business to be successful. The owners of med spas can be confident in knowing the ways their profits and overall operations can increase.
Investors should aim to keep their existing staff at work and help them build their careers. Employees have the potential to rise to the position of a trainer or a regional manager. There's plenty of growth that can be derived through these partnership agreements.
However, at time's end, it's communication that is the most important thing. Selling your business can be an emotionally-charged process. In the 2 to 3 weeks prior to closing the deal you should begin to discuss the process of integration.
"Empathy, understanding, and appreciation for what people do seems to go quite a long way," Drew says. Drew. "It's something that we've been emphasizing over and over again."
Stay Relevant in the Med Spa Market By Running an Excellent Practice
While technology is changing quickly but the medical spa business remains incredibly personal. Customers arrive at the appointment and have a meeting with the person who is a few feet away from their face, and who is handling the delicate areas of their body. Patients need to feel confident in their medical spa. So long as the practice is safe and relaxing experience patients will be willing to pay for it.
Are you interested in learning more about selling your company? Take a look at this five stages of the selling procedure. Listen to the complete interview with the podcast on the following page!
