Discover the first of our three-part series that touches on the biggest steps and hurdles for opening your own medical aesthetics clinic or MediSpa.
Getting the capital to start the aesthetics clinic or MediSpa of your dreams is an incredibly intimidating first step every business owner must navigate. In fact, for some, securing financing is an ongoing task required to access the kind of capital needed to keep growing the business or perhaps open an additional location when the time is right. Luckily, if one avenue is unavailable to you, there are other routes to securing financing for your aesthetics clinic. Here, we cover some of the most common resources you might seek out. Note that these are more specific to Canada and the United States, so those located outside of North America may be able to seek out starting capital in other areas not covered here. As always, due diligence is of utmost importance here and in every business decision.
Before we launch into financing options for your new aesthetics clinic, we first need to cover the business plan.
Professional business plans can be intimidating. Not only do they require a decent amount of time to accurately and effectively complete them, but these plans also require a well-defined idea of how your business will function from year one to year five, including a lot of details you may not have even thought of yet. It can be rather overwhelming, particularly if you try to rush this process. Instead, take your time with it—this will be the foundation to your aesthetics clinic business after all.
Many free comprehensive business plan templates available online make this step entirely doable on your own, particularly if you seek out a business mentor who might be able to review your drafts and offer constructive criticism along the way to your final draft. For those with a little less time, it may be worth seeking out a company or freelancer available for hire with plenty more experience in this arena and who can fulfill this first step for you. This is also a smart option for those who may not have a mentor, as these companies and freelancers will know what questions to ask to help iron out the wrinkles and present a professional map of even those ideas that began as rather abstract.
Whichever option you choose, take the time needed to ensure details are accurate and every aspect of your business is covered as best as possible at this early stage. This is the information you’ll be providing to those who hold the power over whether or not you’ll receive the financing you’re seeking.
The business plan you’ve created will now serve as a reference tool while you work to secure financing. It might be useful to create a smaller version that offers highlights from your business plan to offer as a sort of brochure to investors as well. Note that while the following suggestions offer a significant sampling of where you might access starting and continuing capital for your new aesthetics clinic or MediSpa, there will be additional options that may be available to a specific type of business owner or within a particular region, neighborhood, or country. In all, use this list as a place to get started with brainstorming some of the options for you and get creative from there based on what makes sense for you or your unique business plan.
If you’re able to plan far enough in advance, save up a stash that can help you get started by setting aside a percentage of your paycheck or tapping into your current pool of savings to avoid applications and interest rates. If you do opt for this route, it might be a good idea to consider applying for a line of credit in case your store of cash runs dry and you need to support yourself in the interim. Self-funding your aesthetics clinic can put your savings at risk, but with a proper business plan, hard work, and smart investments along the way, this option can help you to avoid saddling yourself with immense debt while holding sole ownership over your aesthetics business.
Small business loans are available from many banks, but they will have some stringent criteria for determining qualifications. Before applying, ensure you have a comprehensive business plan ready and some sort of collateral to show that you can support yourself while your business is getting off the ground. Different banks may have different options in terms of what they can offer for loan maximums, periods, and interest rates, so it’s worth shopping around a bit before signing onto any one option.
For those rejected by the bank, you may be able to apply for a loan from the U.S. Small Business Association (SBA) or a similar association in your area. Note that you must still meet the necessary definitions and qualifications to apply. You can learn how to obtain a loan from the SBA here. Third-party financing loans are also an alternative to bank loans that may offer better terms that fit with your business plan. However, it’s important to note that interest rates are often higher and repayment terms shorter with these types of loan companies.
Stick away from interest rates and repayment terms with community and government grants. The amount of cash available via grants is often lesser than loans, but grants are a great potential option to substantially supplement your own investment savings to get started. Depending on the unique characteristics of your aesthetics clinic business plan, its location, or your own defining characteristics as a business owner, you may be able to apply for a variety of specific and general grants. For example, some business associations offer grants to women-run or minority-run businesses, while others offer grants to businesses moving into neighborhoods they’re hoping to further develop. Do some searches online or contact business organizations and associations directly to see what might be available to you and how to apply.
Angel investors are part- or full-time investors who make a living investing their capital in early-stage businesses, but they need to see an opportunity for significant growth. If your business fits the bill and you’re willing to offer up equity in exchange for start-up capital, this might be an option for you. Angel investors will still need to see some evidence that you are the right person to run this business and that you’re invested in its success. It’s best to enter these types of negotiations with a clear plan for business growth, a well-defined business mission that you’re passionate about, an idea of how much equity you’re willing to give away, a recommendation for how you’d like the investor to be involved in your business plan, and perhaps even an experienced business adviser by your side to show added experience and professionalism if necessary.
For those willing to give up equity but not a say in the company, asking family and friends if they might consider becoming investors may be an option for securing financing for your new aesthetics business. While this is a feasible option for many, it’s important not to let trust and personal relationships soften your view—this is still a business transaction that should be treated with professionalism. Ensure there are clear repayment terms in place and friends and family understand that there is the risk that they may not see their money again if the business fails. Be upfront about whether they will get any say in how the business is run, including larger investments, staff hires, or whether you take on a partner. Have all the details outlined in a formal agreement and have a lawyer involved to draw up the papers and oversee their signing to ensure everyone is on the same page. This way if the relationship goes sour, you’ll both still be protected.
While it may not be an option for all businesses, crowdfunding can be a creative way to raise a smaller, specified amount of funds. This option is best suited to those who can offer a reward in return for a consumer’s investment if your fundraising goal is reached by the specified date. Depending on your aesthetics clinic’s branding strategy and model, this reward may range from a promotional discount on a single treatment for smaller donations to larger discounted packages or a VIP event access that gives higher-level donators first access to your new aesthetics clinic on opening day. In this way, your crowdfunding campaign can offer prospective patients a better idea of what your aesthetics clinic will be about while helping to supplement loans and establish a loyal patient base before you even open your doors.
An easy way to make your loan dollars go further is to think about creative ways to lower some of your largest costs, such as equipment. Medical aesthetics devices are the cornerstone of your aesthetics business, so it’s recommended to take the time to research and find the right device for your business’ needs. But instead of paying a premium price upfront, consider a device company that offers more flexible payment options alongside cutting-edge devices, such as Venus Concept’s subscription-acquisition model.
Venus Concept offers the industry’s first and only true subscription-acquisition model, meaning predictable and steady payments each month, allowing you to start profiting from your investment as you pay for it. The Venus Concept business model also offers a comprehensive warranty, ongoing clinical education, and marketing support, among other benefits, to better help your aesthetics clinic increase its return on investment. With assistance in these areas included at no additional cost, you’re better able to spend your starting capital in other areas of your business, such as developing an area for quality before-and-after photos that can help with business growth or investing in highly qualified staff. Discover your device options with Venus Concept today by contacting an expert using the button below.