1.0 Executive Summary
The purpose of this business plan is to secure $175,000 of capital for the development of a medical spa based in Tooele County, Utah. Medical Spa LLC (“the Company”) was developed with the intention of providing a wide range of medical aesthetic services from its luxurious location. Full scale revenue generating operations are expected to commence in the fourth quarter of this year once the build out of the medical spa is completed.
Operations
The primary revenue center for the Company will come from the ongoing medical aesthetics that will span a wide range of popular procedures including Botox injections, laser, therapies, microdermabrasion, as well as other non-medical modalities. The Company will generate substantial contribution margins from each procedure offered on site. Most procedures will have a pricing point of $200 to $1,500 depending on the complexity of the service.
Beyond the rendering of medical aesthetic services, the Company will also provide patrons with a wide range of products that they can use at home in order to improve their health and appearance. This will be more moderate aspect of the Company’s operations.
The third section of this medical spa business plan will discuss the operations of the business.
The Financing
As above, the Company is currently seeking $175,000 to launch operations. The terms of this financing are to be discussed during negotiation. However, this business plan assumes that the Company will receive a 10-year loan carrying an 8% interest rate.
As the Company expands its operations, the business would be a strong candidate for a working capital line of credit to finance its growth activities. This document assumes that the Company will use its retained earnings in order to further its growth objectives in the coming years.
The Future
The Company will make ongoing reinvestment into its marketing campaigns so that it becomes recognized as the preeminent medical spa within the target market area. The Company will continue onboard highly trained medical aesthetic specialists in order to render their services. After the fifth year of operation, Management may seek to develop additional locations within Utah.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funds will be allocated as follows:
2.2 Management and Investor Equity
The Founder owns a 100% interest in Medical Spa LLC.
2.3 Exit Strategies
In the event that it is financially prudent to do so, this medical spa could easily will be sold to a third-party for a significant premium. Given the substantial contribution margins as well as their significant degree of economic stability, medical spas typically have a sales premium of three times EBITDA.
3.0 Operations
As discussed in the executive summary, this medical spa will provide a wide range of elective procedures from its luxurious location in Utah. The primary focus of the Company’s operations will be to provide fillers and Botox injections in order to improve the appearance of clients. This will be complemented by a wide range of laser therapy, microdermabrasion, needling, and related services that are part and parcel of operating a medical spa.
The Company will offer wide range products that seek to improve the outer appearance of clients will also improving their general health. The Company will source these products among a wide range of manufacturers there are known for providing quality personal care products. On the segment of operations, the Company will generate contribution margins of 65%.
4.0 Overview of the Organization
4.1 Registered Name
Medical Spa LLC. The Company is registered as a limited liability company in the State of Utah.
4.2 Commencement of Operations
This medical spa launch operations in the fourth quarter of this year.
4.3 Mission Statement
To provide an outstanding range of medical aesthetic services at a cost-effective price.
4.4 Vision Statement
To operate as the preeminent medical spa within Tooele County.
4.5 Organizational Objectives
• Properly conduct the buildout of the medical spa once the capital has been secured.
• Onboard numerous medical aesthetic specialists that will render services on site.
• Adhere to all regulatory frameworks regarding the rendering of medical spa services.
• Conducting extensive direct outreach with realtors and referring healthcare professionals with the target market area.
• Maintain an expensive online presence that uses both social media as well as search engine optimization to drive traffic to the location.
• Provide a stable place of employment for the Company staff.
• Potentially develop additional locations after the fifth year of operation.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the medical spa business plan will focus on the industry, the client profile, the competition, and the current economic climate.
At this time, the economic climate in the United States is moderate. As a result of changing trade policies, there has been a significant degree of uncertainty as well as increased inflation. The Federal Reserve is taking appropriate measures in order to reduce the rate of inflation.
It should be noted that the residents of Tooele County or wealthy and will be able to afford the wide range of medical spa services offered by the business. The significant contribution margins generated will fully support the underlying operating cost in any economic climate.
5.2 Industry Analysis
As of this year, medical spas generate approximately $17 billion of revenue. This industry is poised for continued growth as a number of new procedures that improve an individual’s appearance have been developed in to be provided at a relatively low cost. The Company will be able to capitalize on this trend in the coming years.
5.3 Customer Profile
Any individual is seeking to improve their appearance through the use of medical aesthetics is a potential client for the business. Generally, these individuals will have a household income of no lower than $75,000 and will spend a median of $500 per procedure on site.
5.4 Competitive Analysis
The Company will face a moderate degree of competition as establishes its medical spa operations in Tooele County. The primary differentiating factor that the Company will have is that it offers a much broader range of services that are in demand among the general public.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Medical Spa will have sustainable operations as a result of the following:
• The Company’s significant contribution margins from medical aesthetic services will fully support operations.
• The founder has fifteen years of experience as a medical aesthetic specialist
• The Company can easily establish additional locations once the first location reaches full capacity.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued hiring of medical aesthetic specialists in order to expand revenues on a year-on-year basis.
• Integration of additional medical spa services.
• Development of additional locations.
7.0 Marketing Plan
7.1 Marketing Objectives
• Launch a significant marketing campaign prior to the grand opening.
• Establish ongoing referral relationships with medical professionals and realtors.
• Use search engine optimization and regional targeted social media marketing.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The medical spa will launch operations at the end of this year.
• Revenue will reach $836,000.
Year 2
• The Company will hire additional medical spa staff.
• Revenue will reach $912,000.
Years 3-5
• In Year 5, the medial spa will generate $1.2 million.
• Management may develop additional locations.
7.4 Marketing Strategies
The Company will use a number of marketing strategies in order to drive significant traffic to the medical spa. The Company has developed an extensive pre-launch marketing campaign in order to ensure that residents of Tooele County are fully aware of medical spa’s operations prior to the grand opening later this year. The Company will conduct extensive direct outreach with referring healthcare professionals as well as realtors in the market in order to establish a moderate brand presence prior to the grand opening phase.
In regards to the Company’s website, this platform will showcase every aspect of operation, the wide range of medical aesthetic service offered, pricing information, and contact information. This platform will undergo extensive search engine optimization through the continued development of content related to medical aesthetic services. This will allow the business to remain a significant standing among all major search engines.
The use of social media is also the significant importance to the medical spa. The business will maintain expansive pages that showcase before and after pictures of clients that give permission to showcase the efficacy of the Company’s, medical spa procedures. The Company will frequently post among all platforms as it will not only foster greater following but will also contribute to the effectiveness of the Company’s search engine organization campaigns.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The business will have a compounded annual growth rate of 10.4%.
• Management will invest $50,000 towards the medical spa’s development.
• The business will secure $175,000 business loan.
9.2 Financial Highlights
• Medical spa services will generate contribution margins of 95%.
• Sales or products will generate contribution margins of 65%.
9.3 Sensitivity Analysis
In the event of a severe economic recession, the demand for medical aesthetic services may decline slightly. However, the Company is operating in the population dense and wealthy market of Tooele County that will ensure that the Company has an ongoing client base. Moving forward, the Company may implement a membership base program to drive additional revenue on a recurring basis.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
E) Expanded Sensitivity Analysis
9.6 Breakeven Analysis
9.7 Business Ratios
9.8 DSCR Analysis
Appendix A – SWOT Analysis
Strengths
• Significant ongoing demand for a wide range of medical spa services in this market.
• The Company can scale it operations quite easily.
• Product sales will be substantial secondary revenue center for the Company.
Weaknesses
• General operational complexities given that this is an aesthetic service that renders its operations in a medical capacity.
• Ongoing competition for established competitors in the area.
Opportunities
• Hiring with medical aesthetic technicians with a wide range of expertise.
• Development of additional locations in Utah or neighboring states.
• Development of additional medical spa services that complement luxurious nature location.
Threats
• A very severe economic recession could impact revenues.
Appendix B – Risk Analysis
Development Risk – Low
Management has already sourced the location that will be used to house the medical spas operations. The primary matter that needs to be addressed to securing the funding sought this document.
Financing Risk – Low/Moderate
The $175,000 will be principally used for inventory and tangible equipment. The risk related financing or offset by the significant contribution margin generated from medical spa services.
Marketing Risk – Low
The Company will use and continued expand upon the broad range of marketing strategies discussed earlier. As noted, the medical spa engaged in a broad-based pre-launch marketing campaign to reduce these risks.
Management Risk – Low
The Founder is a highly experienced medical aesthetic specialist who will be able to properly bring the operation of this business to significant profitability.
Valuation Risk – Low
The valuation risk is offset by:
• The significant population density of the target market will ensure profitability.
• Significant contribution margin at all medical spa services.
Exit Risk – Low
In the event that it is financially prudent to do so, the Company will coordinate with an attorney, CPA, and business sales specialist to prepare the medical spa for sale to a third-party. This event is not expected to occur for at least seven to ten years.