Last week’s blog talked about the five Cs of financing. This week we’re diving into phase one of the keys to launching a medspa, which can be broken up into two parts. Phase one, part one consists of concept development, market assessment, sales forecasting and the architectural program.
The concept development process consists of defining the vision and mission, the program components, company culture, unique selling points (USPs) and points of differentiation. When describing your vision, envision what your practice will look like. Ask yourself, what is your why? When defining the mission, ask and answer “Who?” “What?” “Where?” and “How?” Program components are the services and procedures that will be offered. The most common programs include injectables, skin rejuvenation, non-invasive body contouring and laser hair removal, just to name a few.
Next, you’ll have to decide what your company culture will be like. Different company cultures come across to the consumer in different ways. Unique selling points have to do with creating a competitive advantage that is hard for competitors to duplicate. They define what will set you apart in the market. Finally, points of differentiation are touch points such as fruited water upon entry, calming music in treatment rooms, a calming relaxation or waiting room. All of these seemingly small details can have a big impact on your medspa.
After concept development comes the market assessment. This includes a competitive analysis and testing that competitiveness against the concept document to make sure your unique selling position and points of differentiation are accurate for the marketplace. In conducting your competitive analysis, ask yourself the following questions: Who are your direct competitors within a 20-minute drive time from the desired location? How do they conduct business? What are their USPs? What are their points of differentiation? What is the layout of their medspa?
Once you complete the market analysis, test your concept against it. Make sure that your concept works for your market and if it doesn’t, modify accordingly.
The goal of the sales forecast is to predict how much you will do in sales for each service offering over the next five years. It can be done via a demand analysis, a comparable analysis with another practice or medspa, or a utilization analysis.
The demand analysis can be difficult when you don’t have data specific to your market. The comparable analysis requires talking to other practices in yours or similar markets. The goal is to learn how they conducted business in their first years of being open compared to how they operate now. Learn what worked and what didn’t. The utilization analysis is a DIY approach to sales forecasting. To do a utilization analysis, multiply the number of treatment rooms by the average per room by how many hours the spa is open by the utilization rate. The utilization rate is what you expect the utilization to be in the first, second, third, fourth and fifth year.
In order to maximize ROI, the architectural program should flow from the sales forecast. You must identify square feet by each program component — how many rooms and resources will be needed for each procedure? What size will each room be? What is the total square footage needed?