A successful, single-location, standalone med spa is considering expansion within the same region and is seeking support to understand the viability of expanding without having any attrition to its current location. The current location has been open for three years.
Situation
The existing med spa operates out of a 2,500-square-foot, standalone retail location in a high-traffic retail center, which has played a crucial role in its visibility and accessibility. The practice offers services to patients from Monday through Saturday, staffed by a dedicated team that includes a medical director, mid-level providers, nurse injectors, and aestheticians. During its three years of operation, the med spa has firmly established itself within the community, leading to its impressive success. It has consistently surpassed projections and budget expectations while experiencing year-over-year growth in financial performance and client acquisition.
As the practice continues to flourish, the medical director/owner is contemplating opening a second location to capitalize on this momentum further. However, they are keen to make a well-informed decision regarding this potential expansion. They are seeking support and guidance in assessing whether their current business model is scalable and, if not, what adjustments are necessary to replicate their success at a new site.
Solution
The client engaged VMG Health’s medical aesthetics consultant team to evaluate the potential benefits and drawbacks of expanding their med spa. The initial phase of this process involved conducting a comprehensive market assessment of the region to examine local demographics and conduct a competitive analysis of direct competition in the target area. The consultant team then compared the existing location with the prospective new area of interest.
In conjunction with the market analysis, the consultant team collaborated with VMG Health’s financial analysts to conduct a thorough, three-year financial benchmark review and forecasting. This analysis aimed to develop a feasibility pro forma that encompassed vital components such as staffing, staff compensation, operating costs (including equipment, working capital, and operating expenses), revenue projections, and future forecasts for net income aligned with the practice’s growth objectives.
The consultants also performed an in-depth evaluation of the existing med spa’s operations, technology, policies, procedures, and service offerings. This assessment clarified which aspects of their operations were repeatable and which would need adjustments to ensure efficiency across multiple locations.
To further align expansion strategies, VMG Health’s medical aesthetics consulting team facilitated a strategic planning meeting with the med spa’s leadership and owner, where they reviewed their findings. VMG Health provided targeted strategic guidance and practical tools to assist in implementing a blueprint for the new location.
Success
The ownership and leadership team leveraged the insights from VMG Health’s findings to successfully launch a second med spa location 30 miles from the original site. Since opening over six months ago, this new location has been performing well, tracking closely with the pro forma projections established by the financial analysts. The med spa group is pleased to report sustained success at both locations, demonstrating the viability of their expansion strategy and the effectiveness of their scalable business model.
