How to Start a Medical Spa

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📅 November 23, 2024 ✍️ By Jordan Perry ⏱️ 12 Mins Read 🗂️ Blog 🕒 Last updated: November 23, 2024 📌 Tags:day spa

Starting a medical spa can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful medical spa.

Importantly, a critical step in starting a medical spa is to complete your business plan. To help you out, you should download Growthink’s Medical Spa Business Plan Template here.

14 Steps To Start a Medical Spa:

Choose the Name for Your Medical Spa
Develop Your Medical Spa Business Plan
Choose the Legal Structure for Your Medical Spa
Secure Startup Funding for Your Medical Spa (If Needed)
Secure a Location for Your Business
Register Your Medical Spa with the IRS
Opening a Medical Spa Business Bank Account
Get a Business Credit Card
Get the Required Business Licenses and Permits
Get Business Insurance for Your Medical Spa
Buy or Lease the Right Medical Spa Equipment
Develop Your Medical Spa Marketing Materials
Purchase and Setup the Software Needed to Run Your Medical Spa
Open for Business

1. Choose the Name for Your Medical Spa

The first step to opening a medical spa is to choose your business’ name.

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own medical spa:

Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
Think about marketing. Come up with a name that reflects the desired brand and/or focus of your medical spa.

2. Develop Your Medical Spa Business Plan

One of the most important steps in starting a medical spa is to develop your medical spa business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a sample medical spa business plan can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your medical spa.
Company Overview – this section tells the reader about the history of your medical spa and what type of medical spa you operate. For example, are you a laser hair removal clinic, skin care clinic, weight loss clinic or cosmetic surgery center.
Industry Analysis – here you will document key information about the medical spa industry. Conduct market research and document how big the industry is and what trends are affecting it.
Customer Analysis – in this section, you will document who your ideal or target audience is and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.

Product: Determine and document what medical spa services you will offer
Prices: Document the prices of your products/services
Place: Where will your business be located and how will that location help you increase sales?
Promotions: What promotional methods will you use to attract customers to your medical spa? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.

Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
Management Team – this section details the background of your company’s management team.
Financial Plan – finally, the financial plan answers questions including the following:

What startup costs will you incur?
How will your medical spa make money?
What are your projected sales and expenses for the next five years?
Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your plan and financial model in hours.

3. Choose the Legal Structure for Your Medical Spa

Next you need to choose a legal structure for your medical spa and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorshipa sole proprietorship

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who are interested in opening a medical spa together. The partners share in the profits and losses of the business.

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a medical spa include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a medical spa is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your medical spa, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

4. Secure Startup Funding for Your Medical Spa (If Needed)

In developing your medical spa business plan, you might have determined that you need to raise funding to launch a profitable business.

If so, the main sources of funding for a medical spa to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a medical spa that they believe has high potential for growth.

5. Secure a Location for Your Business

There are a few things to take into consideration when looking for a location for your medical spa. You’ll want to find a space that is both affordable and accessible, and you’ll also want to make sure that the area is zoned for medical use. You may also want to consider areas with a high population density, as this can mean more potential customers for your business. Once you’ve narrowed down a few potential locations, it’s important to tour the spaces and speak with the landlords to get a better sense of what each space has to offer. With a little bit of research, you should be able to find the perfect location for your medical spa.

6. Register Your Medical Spa with the IRS

Next, you need to register your own med spa business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire medical professionals, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your medical spa’s name. This process is fairly simple and involves the following steps:

Identify and contact the bank you want to use
Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
Complete the bank’s application form and provide all relevant information
Meet with a banker to discuss your business needs and establish a relationship with them

If you’d like to quickly and easily complete your business plan, download Growthink’s Medical Spa Business Plan Template and complete your business plan and financial model in hours.

8. Get a Business Credit Card

You should get a business credit card for your medical spa to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

Depending on the services you offer, you will need to obtain various licenses in order to render services. Amongst these include: a business license, a medical license, and a cosmetology license in order to start a medical spa. You will also need to obtain a permit from the health department.

10. Get Business Insurance for Your Medical Spa

The type of insurance you need to operate a medical spa depends on the services you provide.

Some business insurance policies you should consider for your medical spa include:

General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
Professional liability insurance: This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

11. Buy or Lease the Right Medical Spa Equipment

Some medical spas may require specific medical equipment in order to provide services. This can include items such as a laser hair removal machine, massage tables, microdermabrasion equipment, wax warmer or a facial steamer.

12. Develop Your Medical Spa Marketing Materials

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The key marketing materials you will need are as follows:

Logo: Spend some time developing a good logo for your medical spa. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
Website: Likewise, a professional medical spa website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you..
Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your medical spa.

13. Purchase and Setup the Software Needed to Run Your Medical Spa

The software you need to run a medical spa is a point of sale system and a reservation system. You will also need software to manage your inventory and track your appointments. And lastly, you will need a marketing tool to help you reach out to potential customers and promote your services.

14. Open for Business

You are now ready to open a medical spa. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.