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Medical Spa Business Forum > Expanding Dermatology to Med-Spa/Day Spa-how profitable is it ?

Hi, I'm currently consulting for a dermatology practise in regards organizational management, and at the same time business management and marketing. The issue is that the physician is reluctant or better say unsure to expand his dermatology practise into a Med/Day Spa. Currently, he has already very good reputation and is offering cosmetic procedures, however his office has limited space to offer other treatments. The day spa combined would give him more capacity to offer medical facials and body treatments including massages. How many rooms would be sufficient or how big should do facility be? The concern is that he is afraid that he has to double the rent when moving to another location, and not sure if it would be profitable. Location would be in West. L.A. BeverlyHills. Has anyone expanded and any experience with this kind of venture? I believe it would be beneficial for him, also hiring good management with strong marketing skills, how can I convince him? I appreciate your feedback, Thank you,

07.8 | Unregistered Commenterrosi

I'm on the other coast, but it might be helpful to know that our med/spa does not include massages and body treatments. We only offer medical facials (1) room, and injections, and all the latest lasers (3) rooms, including the latest in fat reduction. It is a relatively small space,(no more than 800 sq feet) so this uses each room in a more profitable way then massages, etc., and, of course, having a few medical--or even private label--product lines. Also, having a great website and using social media is immeasurable in terms of success.

07.10 | Unregistered CommenterEllen T

I agree. Nix the massage and use the space to provide lights and lasers, dermal fillers, Botox, etc. Skin care using products that you cannot find OTC. Obagi, IS Clinical, etc. IPL, V beam, LHR, Skin tightening, tattoo removal are all great to offer. If you had the space you could add other services like massage, permanent make up, acupuncture, tea room... Ideas are limitless...

07.12 | Unregistered Commentervictoria e

I would hesitate to double your overhead until you have at least tried to maximize your utilization of the space you currently occupy. What are your hours of operation? You should be open at least one late night per week (until 9pm) as well as on Saturdays. Your physician can add staff to utilize the rooms when he is not there. Biggest rule of business - keep your overhead low!
Good luck!

07.17 | Unregistered Commenteralbright

I have the same interest, however I think MediSpas are "out" and minimally or non-invasive centers are "in". I think the most profitable venue is injectables (fillers/neurotoxins). With a great aesthetician or two you can offer skin care. I would like to know what devices people suggest to have at such a center--appreciate Lynn's comments about good procedures to offer. Anyone else have ideas about "must haves" for an aesthetic center?

07.22 | Unregistered Commenterkontis, md

We have an Age Management and Preventive Medicine Clinic with a Medical Spa. We started in November 2010 at our current location. We had a previous location for 2 1/2 years that was much smaller. We purchased an existing medical spa in July 2011, that was not doing well. We have 2200 square feet with 6 treatment rooms, laundry/kitchen, admin office, lab, and physician's office. This is how our square footage is maximized: 2 of our rooms are dedicated to our Weight Management Program, 1 room to our Permanent Cosmetics (and doubles for pre-numbing for procedures), 1 room is for physician procedures only (injectables, laser skin resurfacing, etc), 1 rooom skin care skin care and IPL style treatments, and 1 room that is a multi-use room (skin care, IPL Style Services and Massage). We do very little massage but we do offer it as a convenience to our loyal affluent customers whom are interested in high quality massage. Our massage therapist doubles as a medical assistant. Our Estheticians are Board Certified Electrologist, as well. They are able to perform Skin Care, Hair Removal Services and assist the physician as needed during procedures. Our Gross Revenue breakdown (roughly) is: Aesthetic Medicine & Spa Services (injectables, Skin Care, Massage, Chemical Peels,etc) 41.58%; Age Management 27.37%; Laser/IPL Serviceses 14.73%; Weight Loss 10.01%; and General Medicine 6.48%. We are currently Grossing about $700k a year. Our next step in our business plan is to increase by an additional $300k per year. We do not accept insurance but will provide a superbill if the client requests.

08.1 | Unregistered Commenterg. ariss

We are located in Florida. We have a private label skincare line and we offer Obagi. I think a key factor is high quality personnel that are rewarded for their production and offering services that are in demand in your market area. We upgraded our laser last August to expand our service list. We will see the Laser Gross Revenue certainly increase because of that change. We were very limited on the previous IPL machine we purchased during the acquisition of the other company. We purchased the Sciton Joule with the BBL, Erbium and Skin Tyte II attachments. Our physician has great outcomes with his treatments. Our number one source of customers comes from the internet and our 2nd is from existing customer referrals. This is important because our location lacks traffic.

08.1 | Unregistered Commenterg. ariss

Thank you, very interesting insights. Has anyone purchased the real estate where the Spa is located or is it rented? Is it worth it to purchase the real estate and spend millions (in Cali, the physician would spend around 8Mil to acquire commercial medi property, plus down payment, remodeling, or is it wiser to rent?

g. ariss, , you mentioned, that the majority of your clients come from the internet, do you actively market online?What kind of techniques does your company use-- SEO for your own website, or PPC, or more Groupon style advertising?

08.6 | Unregistered Commenterrosi

If it makes sense financially, I always recommend buying the real estate. Usually the dollars are about the same as rent, but it depends on equity and the buyer's ability to get financing. I guide my clients to set up two corporations; one for the business, one for the entity that owns the real estate. I've worked with several clients who are either purchasing their real estate or taking on a master lease for their facility and setting up medical, health or wellness villages with other practitioners sharing common care philosophies.

In our area, it is affordable to either rent or purchase. We do accept the Spafinder GIft Certificates, as well. There is a fee for the service but we have found that the ROI is there for us. We tried Groupon 2 times. We found issues with doing so and quickly stopped. We do a monthly mailer in a coupon book called Saver's Digest. It works pretty well in our area. It is our 3rd source of new clients. We offer our existing clients a referral credit for referring a client. Usually 6% of whatever their friend spends on services. They can use the 6% towards services at our clinic/spa. Keeps them coming to us. We have not tried the pay per click at this point. But certainly have not ruled it out.

08.9 | Unregistered Commenterg. ariss

Thank you for the informative inputs. I need to put together a "Projected" Profit & Loss Analysis for a med Spa, (six facial treatment rooms) and was wondering if anyone knows a good source which can help me as a benchmark. The main objective is to give an idea, how much the Spa can make, providing medical facials and body treatments, employee's cut, product cut, equipment cost to furnish rooms, profit and break even. I would appreciate your insights. It should be projected for one year to give an idea how profitable it can be.

08.14 | Unregistered Commenterrosi

I would be happy to speak with you about preparing cash flow budgets and pro-forna financial statements for medical spas, wellness centers and medical practices. Please feel free to contact me personally at

Keep your equipment cost down. Look for machines that offer multiple applications. No service contracts. No consumables. and lease instead of purchasing.

08.16 | Unregistered CommenterKim

Having been both an owner and a tenant I would advise that you think about where you capital is best invested and how much you have. There are some big negatives to owning. Servicing a big mortgage is one so is building maintenance and property taxes. Personally, I would rather have 3-5 rented "A" locations than to own one "B" or "C" property.

08.19 | Unregistered Commenterchris s.

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