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1.0 Executive Summary
The purpose of this business plan is to raise $150,000 for the development of a medical aesthetics spa that offers certain medical cosmetic treatments while showcasing the expected financials and operations over the next three years. Medical Spa, Inc. (“the Company”) is a New York based corporation that will provide medical spa services with a focus on improving personal appearance. The business was founded by Jane Doe.
1.1 The Services
Primarily, the business will generate revenues from the ongoing injections of Botox to its patient base. The business will receive direct fees of $250 to $750 for ongoing Botox treatments. The business will also offer treatments such as laser hair removal, dermabrasion, and other cosmetic medical services. These services will be rendered by staff nurses and nurse practitioners that have been specifically trained to render medical spa services.
The Company will provide a number of traditional spa services such as aromatherapy, manicures, pedicures, and other esthetician services that will provide the business with high margin revenues on a day-to-day basis.
The Medical Spa may also provide onsite massage therapy to compliment the manicures, pedicures, and facials offered by the business.
The third section of the business plan will further describe the services offered by the Medical Spa.
1.2 Financing
Management is seeking to raise $150,000 via a loan. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following:
- Development of the Company’s Medical Spa location.
- Financing for the first six months of operation.
- Capital to purchase a company vehicle.
The Founder will contribute $25,000 towards the development of the business. Given the economic stability of medical spas, the business could easily acquire a working capital line of credit or business expansion loan if necessary. However, this business plan assumes that the Company will finance its growth with the retained after-tax profits.
Medical Spa’s mission is to become the recognized leader in its targeted market for medically focused spa services that provides its service at a reasonable rate.
1.4 Management Team
Jane Doe is a highly experienced medical aesthetics expert and registered nurse. She will be able to bring the operations of Medical Spa Inc. to profitability while expanding yearly revenues.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the first three years, the Company will hire numerous registered nurses that will be able to provide a greater degree of service at the Medical Spa location. The Company will also continually expand the scope of services that can be provided onsite. After Year 3, Management may develop additional locations.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Medical Spa, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Medical Spa requires $150,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
The Founder is not seeking an outside equity investment at this time.
2.4 Management Equity
Jane Doe will retain a 100% ownership interest in the business.
2.5 Exit Strategy
In the event of a business sale, Management will contract a business broker to manage the sale of Medical Spa to a third party. The Owner may also work with a staff nurse that would ultimately become the owner of the business over a specific period of time. However, there are no plans to sell the Company to a third party within the first five years of operation.
3.0 Operations
As stated earlier, Medical Spa will be primarily engaged in providing in-office injections of the commonly used skin tightening drug known as Botox. The business will receive direct fees from its patients in regards to this treatment. The business will also provide dermabrasion, laser hair removal, acne treatment, and other cosmetic medical services (excluding surgery). The Company will retain a number of registered nurses and nurse practitioners that will render services. The Medical Spa will also retain a medical director that will ensure that the Company remains within the letter of the law.
Moving forward, the Medical Spa may integrate additional amenities such as floatation tanks, cryotherapy, infrared saunas, and other installations. These services could be offered on a membership basis, which would provide highly recurring streams of revenue. This would also substantially boost the valuation of the business.
The Company will also offer nail services, massage therapy, and related services as a value-added amenity and an additional revenue center for Medical Spa Inc.
Each of these services will render a significant amount of revenue for the business. The prices of these items will be discussed further in the fifth section of the business plan.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the medical spa industry, the customer profile, and the competition that the business will face as it progresses through its business operations.
Currently, the economic climate in the United States is strong. Although interest rates have remained somewhat high, measures taken by the US Federal Reserve have lowered inflation. It is expected that interest rates will begin to decline in the near future.
However, any issues with the economy will only have a minimal impact on the Medical Spa’s ability to generate revenue. The demand to look youthful and have a healthy appearance remains strong in any economic climate. The business is targeted wealthier people that are less swayed by negative changes in the economy. This, coupled with the controllable operating costs of the business, will ensure that the Company is able to remain profitable at all times.
4.2 Industry Analysis
Within the United States, over $20 billion is spent each year on medical spa services and related services that contribute to wellness. There are currently 25,000 companies that render these services to the general public.
As the country has become wealthier over the past ten years, the demand for medical spa services has increased. Additionally, as more people from Generation X enter their middle-aged years – the demand for anti-aging treatments is expected to grow.
4.3 Customer Profile
The following demographic profile will be used during the course of marketing operations:
- Annual household income exceeding $75,000
- Lives or works no more than 15 miles from the Company’s location.
- Will spend $500 per visit to the Medical Spa
Here, you will need to indicate the size of the city/town that you operate within, the effective target market radius of your medical spa, and the expected expenditures that each client will have at your location. You can also discuss the needs and wants among people that have already expressed an interest in using your medical spa for their aesthetics needs.
4.4 Competition
Given the continued popularity of using medical spas, there are always competitors that render a similar if not identical scope of services to the general public. In this section, you can focus on the nearby competition and how you will effectively differentiate your medical spa from similar businesses in the market. As discussed earlier, one of the things that can create a major difference is by installing infrared saunas and related equipment.
5.0 Marketing Plan
The Medical Spa will use a number of marketing strategies that will effectively brand the location as a luxury destination for medical aesthetics services.
5.1 Marketing Objectives
- Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
- Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth.
- Establish relationships with referring partners within the targeted market.
5.2 Marketing Strategies
As discussed earlier, competition in the medical spa industry is significant. The owners of these facilities must continually find ways to maintain a strong differentiating factor. The Company will maintain a luxurious and state of the art facility that will find an immense audience in the target market. Management is currently in the process of working with a commercial real estate brokerage that will find a suitable location for the business.
The Company will maintain an expansive online presence that will include a content-rich website as well as a presence among all major social media platforms. In regards to the website, there will be a number of videos and images of the interior of the Medical Spa facilities. The website will also feature booking/reservation technology so that clients can make arrangements for the specific types of medical spa services they want completed. The website will be mobile device friendly so that it can be found quickly when searches for medical spas in the target market are completed.
In regards to social media, the Company will upload before and after images of completed procedures (with client permission). On social media platforms, the Company will frequently offer discounts and promotions regarding the scope of medical aesthetic services rendered.
Finally, the Company will develop referral relationships with physicians and allied health practitioners. Over time, these referral relationships will be an invaluable source of business.
5.3 Pricing
In this section of the business plan, you should document the anticipated pricing of the medical spa services that your business will render. This includes fees for fillers, dermabrasion, laser therapies, and other services that will be provided onsite.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
- The Medical Spa will have an annual revenue growth rate of 16% per year.
- The business will acquire $150,000 to launch operations.
- The loan will have a 10-year term with a 9% interest rate.
7.2 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in the economy. The Medical Spa is targeting upper middle to upper income people as its primary customer base. These individuals are less swayed by negative changes in the economy. This, along with the controllable operating and overhead costs, will ensure that the Medical Spa is able to remain profitable while servicing all underlying financial obligations.
7.3 Source of Funds
7.4 Tax Assumptions
7.5 Profit and Loss Statement
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 Breakeven Analysis
7.9 Business Ratios
