Medical Spas are the oases of rest & relaxation. We go to spas to get pampered and to rejuvenate. Currently, the global wellness economy is forecasted to reach $7 trillion by 2025. Given the growth potential in this industry, it’s no wonder that many people are wondering how they, too, can break into the wellness world. Starting a medical spa is one way to do this. The medical spa market is a rapidly growing sector within the wellness market, offering a range of advanced aesthetic treatments and services.
However, med spas differ from traditional day spas in many regards. There are more requirements and legalities to consider when deciding whether or not to start a med spa. Before deciding whether you should invest in the proper equipment and tools, it’s vital to understand what a medical spa is and what steps are needed to get started.
What is a med spa?
A med spa combines a traditional day spa with a medical practice. So, while some services require a licensed physician or other medical professionals to perform the service, others are non-medical and can be performed by a licensed esthetician.
Medical services are non-surgical and primarily aesthetic treatments, such as Botox injections or laser hair removal.
How is a med spa different from other spas?
Although medical spas can offer similar services as day spas, their primary appeal is the medical services available. Requirements to open a med spa vary from state to state but are typically required to be physician-owned & operated. The medical spa may have a physician as the medical director, as long as the physician is the majority stakeholder of the business.
What services do med spas offer?
Many medical spa treatments at med spas focus on non-surgical, anti-aging medical procedures, such as derma filler injections. Other specialized services include but aren’t limited to: cryotherapy, vein treatments, scar revisions, liposuction, hair replacement, hair removal, Botox, microdermabrasion, detox & photorejuvenation.
How do I start a med spa?
Step 1: Choose your business name
Set yourself up for success before opening a medical spa. Select a name that will catch a potential client's attention while complying with applicable business entity naming standards. While deciding on a name, take the time to decide on your medical spa's branding. Consider what your logo will look like and choose brand colors for future marketing. Maintaining consistency in branding is essential to promoting your business once it is open.
Step 2: Create a business plan
A business plan outlines your objectives when opening a medical spa. It details what your med spa will do, how it will achieve set goals and what makes it different from competitors. A business plan is beneficial because it:
- Creates an effective growth strategy
- Can help with securing investor funding
- Helps you better understand your customers & competitors
- Analyzing the medical spa market is essential to identify growth opportunities and understand the competitive landscape.
- Determines financial goals & needs
- Attracts talent and new employees
Step 3: Apply for applicable permits to operate
Once you’ve completed the first two steps, you’ll need to register your medical spa business. In California, for example, a med spa must be registered as a Professional Corporation (PC). Rules vary by state. For non-physicians to work at your med spa, you’ll need to set up your business as a management services organization (MSO).
In short, a management services organization (MSO) allows a doctor to hire talent that may not otherwise be able to work at a medical spa (such as a licensed esthetician or a marketing professional) as these individuals can provide support so the doctor can perform their duties without limitation.
A management services organization also offers a more streamlined process to scale up if you decide to expand your business.
Step 4: Find a prime location
Your med spa will only be successful if you acquire clients. While booking apps and marketing definitely helps get your name out there, opening a medical spa in a great location is essential to attracting new business. If your med spa is near a relatively empty area, you will not have many people walking by. If you are on a corner downtown, you're more likely to attract curious customers who may walk in and inquire about your services. Or, at the very least, they'll see your business and look up your name when they have a chance.
While you want to be in a relatively well-populated area, you don't want too much noise or distraction inside the spa. Remember, you're performing a medical procedure and want clients to feel comfortable and at ease, not tense and nervous because of the city noise trickling into your venue.
Parking is also something to consider when choosing your business location. Your clients are coming to you for relaxation & rejuvenation, so the last thing they need is to get all wound up from the poor parking options at your place of business. Let's not give them a reason to go get these services elsewhere.
Step 5: Check legal requirements and consider consulting a lawyer
There's a lot of red tape when opening a med spa because it's a medical practice and must abide by medical regulations and restrictions. While applying for permits and hiring staff, ensure that you comply with any requirements and verify the legality of all licenses. If you're unsure whether you've met all criteria or are concerned about missing something in the process, consider consulting a lawyer who specializes in this area. If you're not a physician, it's wise to seek out legal counsel to create a managed services agreement (MSA) between you and the licensed doctor.
Step 6: Hire staff members with valid licenses
When starting a med spa business, all staff members should possess active licenses in their given field to perform medical spa treatments. For medical license verification, you can search for the individual’s credentials through your state’s medical board.
If you hire non-physicians to perform non-medical services, ensure their licenses are up to date in their given field. You can do this through a search on your state’s Board of Barbering and Cosmetology website.
Remember, a licensed esthetician’s scope of duties is limited. Even if a doctor supervises a medical procedure, if it is outside an esthetician’s training, it is a violation of state laws and therefore illegal. Generally, estheticians only work on the top layer of skin (the epidermis), so any intradermal injections are a no-go.
Step 7: Get proper business insurance
Having proper business insurance is important when opening a medical spa business. The medical spa industry has specific insurance needs to cover the range of advanced aesthetic treatments and potential legal issues. No one wants to think about the worst-case scenario, but it’s better to plan for something rather than not know how to deal with it, should it occur. Insurance is the best way to protect yourself from expensive legal issues or accidents.
There are different types of insurance, so it’s best to conduct research to determine which is best for your med spa. Four common types of insurance used by medical spa owners are:
- Professional liability insurance: Also known as medical malpractice insurance, this covers legal costs for cases that arise from issues related to an employee’s work, such as a laser hair removal-related burn.
- Workers’ compensation insurance: If an employee is injured on the job, this insurance will cover work-related injury care that isn’t covered by health insurance.
- General liability insurance: This covers basic risks, such as slip & fall incidents, that may arise. You can bundle this with commercial property insurance for a business owner’s policy, which may prove to be more cost-effective.
Step 8: Buy necessary equipment
Providing laser hair removal? Cryotherapy? Botox injections? You’ll need the proper tools to perform any services you want to offer. Investing in high-quality equipment is essential for running a successful medical spa and providing top-notch services to clients.
If you’re starting out, you may want to focus on facial services and injectables, as these do not require as high of a cost upfront when compared to machines or appliances that may cost several thousands of dollars to acquire and upkeep. Once your med spa is established and generating enough revenue, you can perform a cost-benefit analysis to see whether a large investment, such as a medical-grade laser lipo body sculpting machine, will be worthwhile.
Step 9: Ensure you’re HIPAA compliant
The Health Insurance Portability and Accountability Act, better known as HIPAA, protects patient information from being disclosed without the patient's knowledge or consent. Therefore, any software that stores sensitive health information, such as patient records, must be HIPAA compliant. As these requirements continuously change to keep up with the healthcare landscape, staying HIPAA compliant is essential. Not sure if you're HIPAA compliant? Take a look at the HHS Office of Civil Rights HIPAA Audit Protocol to determine where you can tidy up your compliance practices.
Step 10: Use scheduling software to manage client relationships
Keeping track of client records, scheduling appointments, configuring payroll and marketing your med spa can seem overwhelming. Vagaro is here to help! As a HIPAA-compliant med spa software, Vagaro is designed to make your job easier. It takes care of the small details so you can focus on growing your business and acquiring new clients. Vagaro even has a free marketplace to help clients find you! Running a successful medical spa starts with the right management software.
Start Your Med Spa with Confidence with Vagaro
As the med spa business continues to grow over the next few years, you need the right tools to help your own med spa grow. These ten steps will help you start building a strong foundation for your med spa. Once you’ve applied for permits and purchased the right equipment, you’ll need an effective marketing strategy to expand brand visibility.
The word “marketing” may invoke some anxiety. But with Vagaro’s guide to the best ways to market your med spa business, you’ll be a pro in no time. Download the comprehensive guide and start your 30-day FREE trial with Vagaro today!
