How Much Does It Cost to Open a Med Spa?
So, you want to take the leap and open a med spa. But there’s one big question weighing on your mind: How much will this new endeavor cost?
Before deciding to start your new venture, you'll want to review your expected costs: one-time purchases, tools and equipment, ongoing operation expenses, credit card processing fees, staffing, and maintenance costs.
Here are some things to keep in mind while planning for financial success.
The cost of starting out
To better understand the cost of opening a med spa, you'll need to first determine what your initial operating costs will be. In addition, you'll want to plan on having available funds to sustain you until you start making enough money to cover ongoing expenses.
The rent for your space will depend largely on the location and size of your spa. Rent for a location in the heart of Manhattan, for example, could be more than $50,000, while a storefront lease in Florida or Tennessee could cost less than $1,000. Along with the space rental, you’ll want to consider utilities, any remodeling you hope to complete before opening, and business licensing fees. Overall, the average startup cost for a medical spa is about $19,267—before leasing equipment.
Once you’ve secured a location, made some renovations, and furnished it, it’s time to look at equipment. You can either buy or lease your equipment based on your budget and your business needs. If you lease your equipment, expect to spend around $80,000—depending on which tools you opt to start out with.
You’ll also want to budget for legal and processing fees ($5,000), insurance ($12,000), and licensing and permits, which will vary depending on your med spa’s location. Your local chamber of commerce can help you figure out what’s required and how much it will cost.
Sometimes, a cash advance can make covering unexpected expenses easier on you and your wallet. Mindbody Capital can provide financial support with flexible payment plans, so you can focus on creating your dream med spa.
Recurring and ongoing expenses
Once you get the big initial expenses out of the way, you'll have ongoing costs such as mortgage or lease payments, insurance premiums, credit card processing fees, and equipment repairs and maintenance—which can cost as much as $25,000 annually. Even phone and internet services can add up to around $900 a year. And, of course, you'll have employee wages, benefits, and payroll taxes to consider—all of which vary depending on where you are.
Even if you plan for all your operational costs, surprise expenses have a way of popping up! Build in funds to cover unexpected events or emergencies, such as equipment replacement or staffing issues. Think about reserving a minimum of $1,000 in emergency savings, and then work toward saving enough to cover three to six months of expenses in case of any unforeseen financial scenarios.
Reducing costs and returning investments
Unless you have a very generous budget or access to a lot of small business financing, chances are you'll need to find a few ways to cut costs. At first, you can probably opt out of fancy décor but splurge on high-quality flooring that will last for years. Rather than buying used equipment at a discount—which means you'll lose access to the full manufacturer's warranty coverage—you might be better off leasing new equipment.
Focusing on injectables and facial services is a great way to keep costs down, as they don’t require expensive equipment, can attract a variety of clients, and typically lead to faster profits.
You can also reduce costs by outsourcing some of your staffing needs. Think critically about who you need in-house and where you can outsource roles. Messenger[ai] can help you save on labor costs by using an AI front desk assistant instead of paid personnel to book and manage appointments, answer customer questions, and complete transactions.
It can be advantageous to work with a financial consultant. Although this may cost anywhere from $150 to $400 per hour, avoiding costly mistakes now saves money later. An adviser can also help you set up a realistic financial plan and assist you in pricing out your staffing and payroll needs.
Although opening your new med spa can seem daunting, with the right information and a solid support network at the ready, you can take one big step toward realizing your dream and connecting your community to health and beauty.