Why Physicians Should Acquire Day Spas

By Wellness Capital Management

Most physicians I speak with who are seeking to enhance their practice are looking for opportunities for growth. Let’s face it, physicians know everything. They are exceptional marketers, great business people, and create a phenomenal culture within their practice. Just kidding. Usually, they are good at some of this and lacking in others. If a doctor is willing to be open and creative, an opportunity exists that will allow them to grow their practice, provide cash paid services, and reduce their business risk.

In the ongoing blending of Day Spa and Medical Spas, and Allopathic and Complementary Medical services, the rules are changing, Not only are they changing, they vary greatly from state to state. The ability for Day Spas to augment their service menus with lasers and injectables is desirous but not within their scope of practice.

Why does it make good business sense for physicians to acquire profitable Day Spas?

Many spas have temp-post-imageunderutilized treatment rooms that can easily be converted to medical use. The spa portion of the business is fully equipped and would need minimal renovation. Medical practices that provide evidenced-based services and marry them successfully with a business that is built on relaxation and skincare services have the best of both worlds.

A Day Spa has existing and verifiable customer traffic and profitability. They have an established and loyal clientele who visit the spa approximately every four to five weeks. Spas serve a guest with a demographic that is similar to that of the medical practice. This creates the ability to market to a built-in clientele. Complimentary skin health evaluations can be offered by the doctor to the existing clientele of the Day Spa. Non-medical esthetics create the opportunity to build trust in the medical services. They also allow an opportunity for medical guests to have an opportunity to get comfortable with the staff and quality of care for less expensive, non-invasive services.

Successful spas have a positive and supportive business culture. They train and develop their staff and provide a hospitable and healing environment for guests. Medical practices should aspire to provide a similar culture. If the hospitality is continued and the culture does not change, the business has a good chance for continued success

Profitable spas operate at a net income of 5-15%. Nationally, 60% of them do an annual sales volume (services and products) of $250,000 or less. Less than 10% have sales volume above two million dollars per year. $450,000 to $1 million is considered strong revenue. To generate comparable revenue and produce a profit would take a medical practice two to three years.

Service menus can be merged. Medical services can be presented in a welcoming and attractive manner. Providing medical services in a portion of the spa will increase the gross profit margin by adding services that net 35-50%.

The performance of a medical practice is contingent on the presence of the doctor and their skill when performing procedures. A successful Day Spa provides numerous avenues for revenue generation and is not dependent on any single practitioner to perform services.

Typically, Day Spas are located in retail malls or mixed-used office buildings. These locations are less intimidating, more visible and accessible than medical clinics that are located in medical office buildings or hospitals.


Cultures clash. There is a big difference between a spa and medical clinic. Physician owners of Day Spas will need to role model what they expect in terms of management, communication, teamwork, and hospitality. Can a doctor transform a spa without turning it into a clinic? I would guess not and have only seen it work successfully in limited instances. It is always a challenge to “leave your ego at the door” and foster a relationship of respect and trust with the owner, staff, and guests of a Day Spa. Respect what you are buying in terms of business success, services, and culture. Changing these because you feel you can do it better, will limit your chances for success.

Growing a practice or medical spa in today’s business environment is challenging and takes courage. It also requires a business plan. This business plan should combine the revenue projections, costs, profitability and debt of both businesses. With the melding of a profitable Day Spa, a medical practice can experience substantial growth in revenue and profitability in a relatively short period of time. It is my hope that the information presented here will clarify the benefit and open your eyes to the opportunity of acquiring a Day Spa.

If you are considering expanding your practice and/or acquiring a Day Spa, we have several opportunities available on our website. If you don't see something in your city that meets your criteria, contact us and we can help you find just the right opportunity.

For more information, please visit our website. We can be reached via e-mail (Monte@WellnessCapital.com) or telephone 888.727.5489. We look forward to hearing from you.

I hope to meet with you during my upcoming visit to IECSC Ft. Lauderdale. I'll be teaching two classes.

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