Is the Med Spa Market Consolidating

1. IstheMedSpaMarketConsolidating? There’s constant chatter in the med spa marketabout the trend toward consolidation. Investors are knocking down doors looking to buy. Small business owners are selling their practice for more than they ever dreamed of. And despite traditional fears—like employeeshavingtobrushuptheirresumesoncethepracticeis sold—there’s actually roomfor career opportunitiesand more growth. Skytale Partner, BenHernandez,spokewithNicoleChiaramonte,CEO,andDrewFine, CCO, of Advanced MedAesthetic Partnersabout consolidation in the med spa market. ReadtheirinsightsbeloworlistentothefullinterviewontheSkytaleInsightspodcast.

2. UpdatesandTrends intheMedSpaMarket Here’s a quick stat: Other industries might be consolidated around 50%, where many of thepracticesarepartoflargerconglomerates.Inthemedspaspace,it’sonly5%or6% consolidated. There are still many standalone med spa practices that manage all their operations underoneroof.Butthenaturaltrendistowardmoreconsolidation.Thatmeansmore M&A,moreinvestmenttalks,andmoreopportunitiesforsmallbusinessowners. The aesthetics market is growing by 10% to 15% a year, which is very aggressive. Why so much growth? In health and wellness industries, it’s more common to see expansion asopposedtocuttingcosts(unlikeairlines).Medspaservicesarecashpayand patients want to be there (unlike dental offices or car repair shops). And providers want tobethere,too—they’reoftenleavingenvironmentsliketheICU,ER,orORandlooking foralessdemandinglineofwork.Readmoreaboutwhat’s happeninginthemedspa industryin2023andbeyond. NicoleandDrewsharethissimpleformulaforhowtogrowasamedspa: Findagreatmarket. Differentiateyourselfinagreatmarket. ShouldYouSellYourMedSpaPractice? The short answer to the question above: it depends. Because of the recent heavy consolidation,theideaisnewformanypotentialsellers.Nicolesuggestsfirstidentifying whatyou wantout of yourpractice and whereyou wantto go.

3. What are your pain points? Are you tired of running the business side, like hiring, training,andmarketing?Wantbetterwork-lifebalance?Dreamingoflayingonabeach in10 years atyour newly-purchased secondhome? Pain points often lead to consolidation. When investors step in to help manage the nitty-gritty business side of things, it can create more room for you to do exactly what youlove.Explainyourgoalsclearlytoyourfinancialadvisor,consultant,investor,and everyone else involved in the process. Just about any deal can be structured to align withyour personal andprofessional goals. PreparingtoSellYourAestheticsBusiness Drew predicts that in 15 years, many med spa practices will be part of larger entities. It might lead to 40% to 60% consolidation. Some of these entities may have different focuses,likefranchisesorregionalcenters.Fromdatatotechnology, providerswillhave tobeontheirAgameinprofessionalism.Readmoreaboutwhatbuyersarelookingfor inamedspapractice. Attheendoftheday,thewaytosucceedisbybuildingagreatpractice.Therestwill takecare of itself. “Youshouldberunningyourbusinessasifyou’rereadytogotomarket,”saysNicole.“It meansthateverythingfromaccounting,to howyou’rerunningthebusiness ona day-to-daybasis,yourpolicies,yourSOPs,areallin order.” Shealsoremindssellerstoinvestinaccountingandlegalaheadoftime.It’slessmoney todo it rightthe first time thanit is to cleanit up. FindingtheRightFitWhenSellingYourBusiness

4. There’s a lot of fear that comes with integrating another organization into your practice—whether it’sanewinvestororafinancialpartnerlikeSkytale.Intalkingabout therelationshipwithan investor,NicoleandDrew prefertousethe word“partner” instead of buyer and seller. Investors partner with a practice because it’s well-run and has great potential. Investors actually want the practice to succeed. And med spa ownerscantakeheartinunderstandinghowtheirbenefitsandoveralloperationscould actuallyimprove. Aninvestorshouldwanttokeeptheexistingteamin office andbuildtheircareers. Employeeswillhavemorepotentialtomoveuptobeingatrainerorregionalmanager. There’s atremendous amountofgrowth availablefromthese partnerships. Butattheendoftheday,communicationiskey.Sellingyourbusinessisanemotional process. In the two to three weeks before the transaction closes, you can begin discussingthe integration process. “Empathy, understanding,andappreciationforwhatpeopledoseemstogoquitealong way,”saysDrew. “It’s somethingthatwe’vebeenemphasizingoverandoveragain.” StayRelevantintheMedSpaMarketByRunningan ExcellentPractice Even though technology is changing rapidly, the med spabusiness is still deeply personal. Clients come to the appointmentand meet with a provider who’s a foot away fromtheirface,handlingdelicatepartsoftheirbody.Patientshavetohavetrustintheir med spa. As long as your practice can offer a safe, enjoyable experience, people will paywell for it.

5. Readytolearnmoreaboutpotentiallysellingyourbusiness?Checkoutthesefivesteps ofthemed spasales process.Andlisten tothe fullpodcast interviewhere!