Is the Med Spa Market Consolidating?

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Is the Med Spa Market Consolidating?
Theres constant chatter in the med spa market
about 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 fearslike employees having to brush
up their resumes once the practice is
soldtheres actually room for career
opportunities and more growth. Skytale Partner,
Ben Hernandez, spoke with Nicole Chiaramonte,
CEO, and Drew Fine, CCO, of Advanced
MedAesthetic Partners about consolidation in the
med spa market. Read their insights below or
listen to the full interview on the Skytale
Insights podcast.
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Updates and Trends in the Med Spa Market

• Heres a quick stat Other industries might be
  consolidated around 50, where many of the
  practices are part of larger conglomerates. In
  the med spa space, its only 5 or 6
  consolidated.
• There are still many standalone med spa practices
  that manage all their operations under one roof.
  But the natural trend is toward more
  consolidation. That means more MA, more
  investment talks, and more opportunities for
  small business owners.
• The aesthetics market is growing by 10 to 15 a
  year, which is very aggressive. Why so much
  growth? In health and wellness industries, its
  more common to see expansion as opposed to
  cutting costs (unlike airlines). Med spa services
  are cash pay and patients want to be there
  (unlike dental offices or car repair shops). And
  providers want to be there, tootheyre often
  leaving environments like the ICU, ER, or OR and
  looking for a less demanding line of work. Read
  more about whats happening in the med spa
• industry in 2023 and beyond.
• Nicole and Drew share this simple formula for how
  to grow as a med spa
• Find a great market.
• Differentiate yourself in a great market.

Should You Sell Your Med Spa Practice?
The short answer to the question above it
depends. Because of the recent heavy
consolidation, the idea is new for many potential
sellers. Nicole suggests first identifying what
you want out of your practice and where you want
to go.
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What are your pain points? Are you tired of
running the business side, like hiring,
training, and marketing? Want better work-life
balance? Dreaming of laying on a beach in 10
years at your newly-purchased second home? 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 you
love. Explain your goals clearly to your
financial advisor, consultant, investor, and
everyone else involved in the process. Just about
any deal can be structured to align with your
personal and professional goals.
Preparing to Sell Your Aesthetics Business
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, like
franchises or regional centers. From data to
technology, providers will have to be on their A
game in professionalism. Read more about what
buyers are looking for in a med spa practice. At
the end of the day, the way to succeed is by
building a great practice. The rest will take
care of itself. You should be running your
business as if youre ready to go to market,
says Nicole. It means that everything from
accounting, to how youre running the business on
a day-to-day basis, your policies, your SOPs, are
all in order. She also reminds sellers to
invest in accounting and legal ahead of time.
Its less money to do it right the first time
than it is to clean it up.
Finding the Right Fit When Selling Your Business
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Theres a lot of fear that comes with integrating
another organization into your practicewhether
its a new investor or a financial partner like
Skytale. In talking about the relationship with
an investor, Nicole and Drew prefer to use the
word partner instead of buyer and seller.
Investors partner with a practice because its
well-run and has great potential. Investors
actually want the practice to succeed. And med
spa owners can take heart in understanding how
their benefits and overall operations could
actually improve. An investor should want to
keep the existing team in office and build their
careers. Employees will have more potential to
move up to being a trainer or regional manager.
Theres a tremendous amount of growth available
from these partnerships. But at the end of the
day, communication is key. Selling your business
is an emotional process. In the two to three
weeks before the transaction closes, you can
begin discussing the integration
process. Empathy, understanding, and
appreciation for what people do seems to go quite
a long way, says Drew. Its something that
weve been emphasizing over and over again.
Stay Relevant in the Med Spa Market By Running
an Excellent Practice
Even though technology is changing rapidly, the
med spa business is still deeply personal.
Clients come to the appointment and meet with a
provider whos a foot away from their face,
handling delicate parts of their body. Patients
have to have trust in their med spa. As long as
your practice can offer a safe, enjoyable
experience, people will pay well for it.
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Ready to learn more about potentially selling
your business? Check out these five steps of the
med spa sales process. And listen to the full
podcast interview here!