Yes, owning a medical spa is indeed a profitable business. The fact that the medical spa business provides relief for people who are suffering from severe pains, and insomnia means that it is a business that is considered essential and people who need their services would want to pay a premium to get the relief they desire.
But when it comes to how much a medical spa is expected to make yearly, you may have to consider some factors before arriving at an estimated figure. In this article, we will look at some of the key factors to consider before coming up with an estimate of what a medical spa business is expected to make.
5 Factors that Determine How Much a Medical Spa Can Make Yearly
The Location of the Medical Spa
One of the major factors that can determine the amount a medical spa is expected to make yearly is the location of the medical spa. Trust me, when it comes to business, location is key.
If you locate your medical spa business in an area where people don’t appreciate the services of a medical spa, a location where you have a larger concentration of people with low purchasing power, you will struggle to get people to patronize your business.
But if you have your medical spa located in a highbrow area, an area that has people with high purchasing power and people who appreciate the service offerings of medical spas, then you will definitely generate more money.
The Size and Capacity of the Medical Spa
Another factor that can influence the income a medical spa is expected to generate annually is the size of the medical spa. For example, a medical spa that operates from a large facility that is well-equipped and with adequate staffing will definitely make more money yearly when compared to a medical spa that is operating from a small spa facility.
The idea is that the higher the number of staff at a medical spa, the higher the capacity of the medical spa to attend to more customers.
The Marketing and Sales Strategy of the Medical Spa
Usually, a business is supposed to implement what is known as a marketing and sales strategy if they want to generate sales. Even though a business that is well located would naturally attract sales, but trust me, such a business may not be able to break even within its target time frame.
That is why most businesses craft a workable and result-oriented marketing and sales strategy that will help them attract sales.
In essence, a medical spa that implements a workable and result-oriented marketing and sales strategy will always make more money when compared to a medical spa business that only depends on customers who walk in on their own. The rule is that aggressive marketers will always attract and generate more sales than passive marketers.
Additional Service Offerings
As expected, the average medical spa business is supposed to offer a wide range of services that revolve around balneotherapy treatments like deeper chemical peels, injections (such as Botox), and laser treatments, providing massages, dermal fillers, laser hair removal, body contouring (body sculpting, dermabrasion facials, providing skincare treatments).
With that, they will be able to generate income, but a medical spa that upsells by retailing skincare cosmetics and also offering medical spa consulting services will always make extra income.
Your Billing Rate and Service Fee
Lastly, another factor that will determine the amount a medical spa is expected to make yearly is the billing rate and service fee of the medical spa. Even though there is always an average fee that medical spas are expected to charge within different locations, a medical spa that has successfully established a reputable brand can afford to charge above the industry’s average.
Interestingly, such medical spas usually attract high-paying clients such as public figures, celebrities et al. In essence, a medical spa that has successfully carved a niche for itself will always make more money yearly when compared to the average medical spa in the same city or state.
How Much Can You Make Yearly?
Based on the factors listed above, a medical spa can set a financial goal of what they want to make yearly and if they work hard, they are likely going to meet their financial target. But aside from that, and based on available data, the average medical spa in the United States rakes in about $1 million per year, according to the AmSpa.
As a matter of fact, a report released in 2019 by Medical Spa State of the Industry, shows that some leading medical spas made between $4 million to $5 million annually within the stated period.
The report further shows that the average revenue per medical spa location rose to $803,000 in 2017, an increase of 1.9 percent on the 2016 average of $788,000. With average revenues now passing the benchmark $800,000 level, the 2017 out-turn represents a further steady advance for the industry.
What is the Profit Margin of a Medical Spa?
The profit margin of a medical spa business varies based on some of the factors we have discussed earlier (the size of the medical spa, the location, and their additional service offerings), including the ongoing expenses of the medical spa and of course, how the medical spa is managed. But on average a medical spa is supposed to target a profit margin of 25 to 35 percent.
If you are thinking of starting a medical spa and you want to make it as high as what is quoted in this article, then you must be ready to put in the work.
This is so because medical spas that generate over a million dollars annually made sure that conducted their market research, and feasibility study and were able to come up with a workable and result-oriented business and marketing plan.