Strengths
Medical spas have become extremely popular over the past 15 years given their ability to provide a wide range of medical aesthetic services in convent locations. These services are typically rendered by physicians, nurse practitioners, or registered nurses. One of the primary strengths of a medical spa business is that they are typically able to generate substantial revenues in any economic climate. This is especially true if the business is located in a wealthy and population dense area that is less swayed by challenging economic climates. Given that these businesses require a substantial amount of training, they also enjoy a number of high barriers to entry given the licensure that is involved with owning and operating this type of business.
As it relates to startup costs, most medical spas typically have a starting budget of $100,000 to $500,000 depending on the scope and scale of the business. For medical spas that are principally focused on Botox injections or collagen induction therapies, the startup costs can be on the relatively low end. For facilities that are going to feature the full scale of medical aesthetic services including laser hair removal, microdermabrasion, and other services that require specialized medical equipment, then the startup costs are typically higher. Given the substantial economic stability of these businesses, most financial institutions are happy to provide ongoing capital support given the significant contribution margins that are generated from services rendered.
The medical spa industry is poised for substantial growth over the next seven years. By 2031, industry revenues are expected to exceed $57 billion. This is principally due to the fact that a wide range of medical professionals are able to render these services.
Weaknesses
As it relates to weaknesses, medical spas typically do have high operating costs given that highly specialized personnel are required to render services. Additionally, most states mandate that a physician is affiliated with the medical spa working in the capacity as a medical director. As a result of the increased popularity and new techniques that are used to provide medical aesthetics, medical spas typically face a significant amount of competition, especially within wealthy areas.
Opportunities
Medical spas enjoy a wide range of business opportunities that allow them to expand their revenues on a year-on-year basis. Foremost, these businesses can seamlessly expand the number of services that they offer on site. For medical spa owners that are starting on a smaller scale, they are able to seamlessly integrate more comprehensive services as they accrue a greater degree of capital. Additionally, given the moderate startup costs associated with the medical spa – an entrepreneur within this field can easily establish additional locations leveraging the existing brand name that they have developed for their first facility.
If it is economically viable to do so, medical spas can also expand by acquiring the existing businesses that can be integrated into their respective ecosystems. Similar to receiving financial support from banks, entrepreneurs within the medical spa industry can easily secure capital in order to carry out an acquisition of a profitable business.
Threats
The primary threat that is faced by medical spa businesses is negative changes in the economy. Given that these procedures are paid for with discretionary income, severe economic recessions can impact top line income. However, this risk can be reduced by operating the business in a wealthy market. At this time there is no known legislation that would impact the way that these companies conduct business.