4 Things To Know When Selling a Med Spa
Selling your med spa is a scary and exciting time in anyone’s career. You’ve put a lot of time, sweat, and tears into your med spa, and the decision to separate likely isn’t easy.
However, you are also probably a little excited to sell your med spa. These feelings are completely normal and a part of the process of selling a med spa.
Still, there are a few basics of selling a med spa to be aware of as you begin fielding offers. Without the correct information at hand, you could end up selling your med spa for less than its worth or, even worse, sell to a buyer who doesn’t align with your strategic goals. The team here at Triumphant Transition Partners has a few tidbits of knowledge to be aware of as you consider selling your med spa. Read on to learn more!
You’ll Need an Accurate Assessment
Assessing your med spa is one of the most essential steps in the process. It’s challenging to sell your med spa without knowing what it’s worth! The assessment is thus the bedrock on which the rest of the process rests. Unfortunately, it can also be one of the more challenging parts of the process.
Part of this is just due to the intricacies of evaluating a business. No two businesses are the same, but assessing a med spa attempts to compare it to other comparable companies and determine its value relative to those businesses. That can be a daunting task. We recommend focusing on your EBITDA or Earnings Before Interest Taxes, Depreciation, and Amortization. This view focuses on the core profitability of a business after debt and other obligations are met. This financial assessment is excellent for those looking to sell their businesses.
EBITDA is a financial paradigm that cuts all variables out, whether size, employee number, industry, or geolocation, and focuses on profitability. EBITDA isn’t an exhaustive financial analysis but offers unique benefits.
Let’s say you’re comparing two med spas head-to-head and see that one is well-established and has a much larger client base. This spa looks to be a better investment at face value, right? However, let’s say you learn after further financial analysis that the smaller spa is actually more profitable due to a larger debt burden at the first spa. This is why an accurate financial assessment is so important. Only by understanding the EBITDA of your business can you determine a fair asking price.
What Type of Med Spa Are You Marketing?
While you likely already know what type of med spa you are operating, it’s still important to take a deep dive into the services you offer to properly market your med spa to sell and attract the best potential buyers.
For example, are you an RN or a Plastic Surgeon? How does this impact your bottom line? What services do you offer, and what are your primary sources of revenue? Injectables like lip fillers, Botox, cool sculpting, lasers, chemical peeling, and micro-needling are great examples of services that clients return to the med spa for regularly, generating solid repeat revenue. Over-the-counter products can also be a great way to boost sales and something to take into account when looking to sell your med spa. Additionally, if you want to increase revenue before the sale, consider implementing a membership program. This can provide a consistent and recurring revenue stream, enhancing your value and piquing buyers’ interest.
Buyer’s Network
You have a baseline understanding of your practice’s value and are now taking your med spa onto the market. Now, putting your med spa on the market is a significant step, but it can come with challenges. There are only so many interested buyers on the market. Posting your med spa out as a listing might end up with you receiving a lot of traffic and attention but not many genuine buyers.
A qualified private buyer’s network, curated and maintained by a trusted partner, is a great way to ensure you’re putting your med spa in front of potential buyers. Your transition partner, if worth their salt, has a list of trusted and interested buyers on hand and might provide you access to this list of private buyers. This “pre-screened list” of buyers is a win-win for all involved. The buyer gets early access to tantalizing med spas like yours for potential early offers, the transition partner has a list of pre-vetted buyers to expedite the sale, and you have access to a list of interested clients. It’s a great deal for all involved!
Qualify Offers
You’re at the stage of the sale process where you’re receiving offers. Congratulations! This might be a heady experience, but it’s important to take a step back and begin to assess those offers. See, not every offer you receive for your med spa will be a keeper.
Some may be low-balls. Some might not align with your strategic goals for your life after the sale of your med spa. Some buyers might have opinions about the direction of your med spa that you are opposed to. That’s why you must establish a system for qualifying each offer to ensure that you’re only putting time and energy into the most profitable and compelling offers. A clear-cut vision of your goal for sale and an idea of what your med spa is worth will help you discern which offers are worth pursuing and which are not worth investing more time into.
You’ll Need Support
Selling a business as a small business owner is tough. You’re busy as is, and now you’re trying to sell your business successfully. You’ll need support to sell your med spa for the best price on your terms. The right partner can help you equip your attorneys with the proper paperwork to successfully negotiate your deal on your terms. Without that support, you risk leaving money on the table when selling your med spa.
That’s why you need to contact Triumphant Transition Partners!
We’ve been facilitating significant business transitions for years and are here to help you sell your spa on your terms and at your price. We are here to help you understand what your business is worth and then work to arm your attorneys with relevant information to drive a successful negotiation! A successful practice or spa transition begins with a helpful courtesy consultation from your Triumphant advisor; reach out for your free consultation today!
What Type of Med Spa Are You Marketing?
While you likely already know what type of med spa you are operating, it’s still important to take a deep dive into the services you offer to properly market your med spa to sell and attract the best potential buyers.
For example, are you an RN or a Plastic Surgeon? How does this impact your bottom line? What services do you offer, and what are your primary sources of revenue? Injectables like lip fillers, Botox, cool sculpting, lasers, chemical peeling, and micro-needling are great examples of services that clients return to the med spa for regularly, generating solid repeat revenue. Over-the-counter products can also be a great way to boost sales and something to take into account when looking to sell your med spa. Additionally, if you want to increase revenue before the sale, consider implementing a membership program. This can provide a consistent and recurring revenue stream, enhancing your value and piquing buyers’ interest.