Med Spa Industry Trends and Predictions for 2023

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Med Spa Industry Trends and Predictions for 2023
Med spa owners, weve got good news for
youyoure in the right place at the right time.
The aesthetics industry is thriving. And
investors are primed for med spa MA. Were
sharing Skytales top trends and predictions for
2023 below, and you can check out our latest
podcast on the med spa industry to learn even
more!
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Whats Happening in the Med Spa Market in
2023? When asked about the state of the aesthetic
industry, Skytales Tedd Van Gorden mentioned a
frothy market and high investor demand. Both of
these variables are conducive for med spa
MA. For one, the industry is expanding while
other healthcare industries flatline or decline.
Thanks to consumer demand, the med spa space is
expected to grow by 10 billion by 2027, with an
average of 11 growth per year. And injections,
which are just one facet of the med spa service
mix, are expected to grow even more12 over the
next 5 years. Thats an incredible amount of
growth, especially in comparison to some of these
more established healthcare industries that a
lot of investors are already saturated with,
says Tedd.
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Why Are Medical Aesthetics Practices So
Attractive to Investors? With such impressive
top line growth, it might seem obvious why
investors are hungry for med spa MA. But there
are several other underlying positive factors of
the med spa space

• Private pay. Med spas generally dont take
  insurance, so customers pay with cash or credit
• card. This is very rare in healthcare and saves
  med spas the hassle of dealing with insurance
  companies. Plus, it makes for ample cash flow.
• Recurring services. Once a customer receives a
  service, they usually return. A positive
• customer experience with injections, facials, and
  the like can make a loyal customer for years to
  come.
• Highly fractured and unconsolidated industry.
  Because many med spas operate independently,
  theres a big opportunity for investors to
  partner with existing owners and build a
  platform.
• Increasing cultural acceptance. The popularity of
  wellness, healthy aging, and mens participation
  in aesthetics has made that regular visit to the
  local med spa much more commonplace.
• Aesthetics are exciting! Unlike visiting a normal
  healthcare practice, patients often look forward
  to their visit to a med spa. And providers are
  excited to work there, too. This energy makes
  the industry feel more positive to invest in.

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What Are Buyers Looking for in a Medical
Aesthetics Practice? At Skytale, we meet many
investors who inquire about med spas available
for MA. And while every investor has their own
idea of due diligence, here are some common
themes among what investors are looking for

• Cash flow. Its a binary test for a company. As
  Ben Hernandez shared about the DNA of a
• beautiful business, A simple but trustworthy
  evaluation of a med spas value comes from
• calculating its EBITDA the businesss free cash
  flow. This figure is all about what the
  business is producing and makes you more
  competitive.
• Service mix. Each service has a different
  profitability. It helps indicate what customer
  types and seasonality the business faces. Are
  the services priced at a premium, affordable, or
  membership level? Heres a hint If you can
  attract customers with premium pricing, thats
  gold.
• Number of locations. While not a necessity for
  MA, having more locations does indicate more
  opportunity for an investor to scale. It also
  shows that you have a secret sauce.
• Investors may feel that buying up multiple
  locations is lower risk with higher return.
• Utilization. This means that your business is
  getting the most out of the resources you
  havelike employee efficiency, client bookings,
  and use of existing retail footprint.
• Owner story. Investors want to know about you as
  the owner, Tedd says. Why did you start this
  business? What do you think about your business?
  What is your day-to-day impact on the business?
  What are your roles and responsibilities? Buyers
  want to see if their

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• interests align with yours. Theyre also gauging
  if youre going to stick around for another
• decade or transition off after a few years or
  months.
• How Do I Prepare to Sell My Med Spa in 2023?
• If youre worried that preparing to sell your med
  spa will require a long to-do list, hang onmost
  great med spas are actually already doing the
  right things. The following suggestions are
  smart moves for running a great business,
  regardless of whether you want to sell now, in
  10 years, or never. Here are a few steps to
  consider taking to get the most value for your
  med spa.
• Have a clean balance sheet. Show cash flow and be
  smart with how you finance growth and approach
  debt. Most buyers will want you to be debt free
  at closing.
• Invest in data and good processes around data.
  Marketing data (page
• views, clicks), financial data (accounting), and
  operational data (number of clients per day and
  per provider) is key. By having the right
  systems and processes in place to accurately
  capture this data, business owners will be able
  to sift through the noise and analyze and display
  it in an understandable format to see the
  complete picture of their business, Ted
  explains.
• Surround yourself with a well-functioning team.
  From newbie hires to seasoned veterans, all team
  members should be growing in the same direction.
  It also helps the investor not be solely
  dependent on you, the owner.
• Find trusted advisors. Trusted advisors could
  include a good lawyer, CPA,
• consultant, and MA advisor like Skytale. Theyre
  outside people that you have faith in to give
  good advice and perspectives.
• Finally, know who you are and what makes your
  business
• special. Bring this vision to life and
  communicate it to staff and buyers. Investors
  look at hundreds of deals per year, but you only
  sell your business once. So help your business
  stand out.
• Keep in mind that these arent things to only do
  right before you go to market. These strategies
  will help you run your business for the next 40
  years if you start now.

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Join Skytale at the Medical Spa Mergers and
Acquisitions Summit Are you ready to take your
learning to the next level? Whether youre a
practice owner planning to scale or exit, or a
potential investor looking to engage in one of
the fastest growing industries in the U.S, the
Medical Spa Mergers and Acquisitions Summit will
help you take the next step on your med spa
journey. On February 2, 2023, Skytale team
members and other panel guests will discuss
topics like the state of the industry, seller
and buyer viewpoints, five phases of a deal,
wealth management, maximizing the value of your
practice, and life cycle of a med spa. You wont
want to miss it! Grab your spot today at
medicalspashow.com/skytale.