Is Your Medspa Saleable? 10 Factors to Determine Your Business’s Value

Let’s real talk it out.

IF… and I am assuming this is more of a WHEN than and if…

you are ever, ever, ever planning on selling your medspa

(and you should be because that is shit is a grind and life is calling)

-then you need to take a good look at how you are running it NOW because all the millions you are currently pulling in doesn’t mean there is any person/company/investor that will be willing to hand over a fat check when you are ready to dig your toes in the sand and leave it all behind.

But don’t stress too much my smooth faced friend, because whatever you are doing (or aren’t doing) now can be adjusted; so when the waves start calling, those fat check writing strangers will be banging your doors down. 

10 factors to set up your medspa for future sale

Revenue and Profitability

Look at your medspa's historical revenue numbers.

Are sales growing or declining over the past few years?

Also calculate your net profit margin - the percentage of revenue that becomes profit after expenses. A higher profit margin indicates an efficient business.

*All of these numbers, and any financials should be organized and easily accessible - use an accountant or a program like Quickbooks. No one is going to weed through your handwritten ledgers or notebooks.

EBITDA

EBITDA stands for "Earnings Before Interest, Taxes, Depreciation, and Amortization."

This figure gives a sense of your medspa's true operating cash flow, which is important for potential buyers.

    Market Comparables

    Before you determine how much "you wan" for your medspa, research recent sale prices of similar medspas in your area. Adjust these values based on how closely the other businesses match yours in size, location, and services offered.

      Asset Valuation

      Determine the current market value of all your medspa's physical assets like equipment and property. You can get professional appraisals or research current selling prices.

          Client Base and Market Position

          Analyze your customer retention rates, average customer spending, and overall market share.

          Do you have a large database of clients. What does your lead gen funnel look like?

          Businesses with loyal, high-spending clients in growing markets are more valuable.

              Growth Potential

              Estimate your medspa's future revenue growth based on industry trends and your expansion plans. Projected future earnings can be discounted to determine present-day value.

                  Regulatory and Legal

                  Assess any potential legal liabilities or compliance issues. This may require setting aside a contingency fund that reduces your overall valuation.

                      Staff and Management:

                      Evaluate the cost of replacing key employees and the impact that your management team has on operations. Losing critical personnel can hurt a business's value.

                      It is important to make sure your business isn't solely reliant on you (as the owner) for a large portion of revenue. Make sure if you are leaving that you have high revenue generating providers employed to make it more attractive to potential buyers.

                          Customer Satisfaction

                          High customer satisfaction, reflected in online reviews, can indicate a business with strong repeat traffic and additional revenue potential.

                              Digital Presence

                              This is a big one that most medspas ignore.

                              Your digital presence is what drives bookings and 80% come from Google.

                              How active is your website? How many monthly visitors does it get? Is it capturing emails, is there content creation happening monthly - and on and on.

                              Even you are a little weak in some areas mentioned above, a strong digital presence and lead generation funnel will be very attractive to potential buyers.

                                  By considering these 10 factors, you can get a better sense of your medspa’s fair market value. This information is crucial if you’re considering selling your business. Consulting a financial advisor can also provide valuable insights during the valuation process.

                                  *information provided by Vitality Ventures Group, LLC

                                  author avatar
                                  Shannon Hayes CEO