By: Caroline Nance

Your medical spa is thriving, and now you’re considering selling your practice. Whether you’re planning to sell soon or in a few years, giving yourself ample time to prepare can give you a better chance of meeting your financial goals, including selling at your desired sales price. The medical spa industry has experienced rapid growth over the past several years and shows no signs of slowing down.The global medical spa market is expected to reach $64.69B by 2032 according to Polaris Market Research.

Along with this market expansion, I’m sure you’re noticing a rise in business acquisitions and increasing interest from private equity firms looking to invest in or purchase medical spas.

Evaluate Your Business Now

With selling on the horizon, first ensure your financials are accurate. If you don’t already have an accountant preparing your financials on a monthly basis, hire one today.  When you’ve reached the point where you’re assessing financials to determine the value, you’ll be relieved to have accurate financial statements. Early on in the sales process, you’ll work to evaluate your business based on financial metrics. Potential buyers will want to understand your profitability and will likely use an adjusted EBITDA to assess your company’s value.

When we work with our clients who will one day sell their practice,  we work to analyze opportunities to grow profit by assessing items like revenue, supply and payroll spend, and fixed costs like rent, utilities, and marketing. Oftentimes, we can identify areas of underperformance in revenue or overspend.  Analyzing early gives us time to course correct, improve, and generate more profit – which results in a higher sales price.

Consider Your Options

With increased private equity interest, more options exist than ever before for practice owners who have a desire to transition their business. Partnering with a larger medspa platform can allow you to retain some ownership while transferring management and operational responsibilities. This arrangement is ideal for owners who are more passionate about patient care than the entrepreneurial aspects of running a medspa.  Some owners may wish to partner with a key employee and sell part of the business.  This allows for retention, and shifts some of the responsibility of running the practice to your new partner.  It also allows you to remove some of your “chips off the table”.  Selling a portion of your equity allows you to divest from the practice.  And, finally, selling outright to a buyer is a third option.  This option is ideal if you don’t wish to continue working in the practice (or want a shorter time horizon to work in the practice).  

Partners You’ll Need

Before selling, you’ll want a couple key players on your team.  We already mentioned having a competent bookkeeper or accountant who works to keep your financials accurate and timely. It’s also a good idea to partner with a financial professional that can further assess your business and pinpoint opportunities to grow. When you’re ready to sell, you’ll need an M&A (mergers and acquisitions) investment banker or broker to help you take your business to market and negotiate a sale.Partnering with a credible M&A firm provides more options with potential buyers and helps you negotiate a price that you’ll be happy with.  As your sale progresses, you’ll need an attorney with health care M&A experience.  The attorney will help you review the deal documents, as well as walk you through the legal pitfalls along the way.  You’ll also want to work with your tax accountant to ensure you’ve got the deal structured in the most tax advantageous way.  Building a team of experts is critical to ensuring a smooth transaction.

Remember, you only get one shot to sell your business. Ensuring you’ve got accurate data and financials, that you understand the many options available to you, and you’ve got the right team of advisors will help you get it right and achieve your goals.  

If you’re considering selling, click here to receive a complimentary financial assessment.  We can help determine if you’re ready, and uncover any financial obstacles that might prevent you from maximizing your value.

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