Owning a Health or Medical SPA business doesn’t have to be a fairly long and
time-consuming process of starting your own business from scratch. Purchasing an existing operating SPA is a tempting option, especially for new businessmen. What could be more beneficial in terms of saving money, nerves and time than buying a pre-made SPA enterprise with an established business process? No need to invent anything, make expensive reconstructions, analyze the advantages of different types of professional equipment, look for the ideal staff and think what a miraculous way to convince potential customers to come to you. An existing business – buy, conquer, and have a brilliant financial prospect!
However, everything is not as simple as it seems to people who have never before had experience in sales or purchasing an existing Health or Medical SPA business.
Let’s try to assess the risks of buying an existing SPA center, reviewing them with a critical eye and drawing conclusions on a clear mind .
Myth No. 1. Stable revenue, good profit
What interested sellers of an existing business would not say is not often found
a successful business that is being sold for reasons unrelated to its decline. Among
beauty salons for sale it’s a fetial situation, among Health, Medical SPA or Wellness
objects, the situation is slightly better. Initially, the approach to opening a spa location by the owners is more balanced and competent due to significant investment infusions. If the owner of the beauty salons sells their business, as a rule, at the “squeezed lemon exhaustion не имеет смысла прямой перевод” stage – when everyone has already skimmed off all the goodies and the project has become outdated, then it’s a totally different reason. In general, sale of SPA’s is a rarer occurrence. If circumstances force owners of prosperous SPA to leave the business, for example, in connection with emigration problems, they will prefer to either rent it out or put it into trustworthy hands. It can happen that a quite successful SPA appears on the market, which is being sold because of upcoming bankruptcy, that does not directly relate to the SPA works itself.
Being as it might be, before buying an existing business, you need to check:
• existence of account payables
• accounting and tax reporting’s
• assets: ownership or existence of a registered lease,
• debts on rent and utility bills
• management cash flow reports
At the same time, check the legal risks:
• the risk of a transaction being invalid
• the likelihood of administrative and criminal liability
• legal documentation that ensures the legality of the business
When checking income statements, analyze and compare various facts, and conduct
independent economic calculations to verify the reliability of the information provided.
And if it may seem to you that not the best business performance is associated only with personal reasons of the former owner, and you can do better, do not rush to such a conclusion. The revenue may also seem pretty good to you, but is there a profit? That is the question.
Myth #2. existing team of specialists
An organized team of well-trained, qualified professionals is really a huge advantage given the chronic lack of spa professionals in the industry, especially in small towns
But in practice, you run the risk of encountering many problems:
• some of the employees are not ready to work under new ownership for
subjective reasons or because of basic distrust of the new owner
• there are a lot of unresolved conflicts in the team and accumulated fatigue from
• loss of staff motivation in a stressful situation, if employees do not understand
what their new management will do, how wages may change, and fear of being fired
• the staff is not as well trained as it was assured at the time of purchasing of the Health, Medical SPA or Wellness business
• staff is not ready to adjust their habits to new requirements
• and a thousand and one more problems, big and small
As a result, there is a high probability of a mass reduction of employees already in the first weeks of work under new management. According to our observations, there are no SPA&Wellness centers or beauty salon, whose team would be preserved in full force after the purchase and sale of the business.
As a rule, you have to recruit a new team in full force.
Myth #3. Has everything you need to work
The financial and technical condition of the Health or Medical SPA is often assessed by superficial inspection, but in vain.
Cracks and scratches on the walls, a loose massage table, stains on cosmetic
armchairs – it is easy to notice, easy and inexpensive to repair.
But what will you do if, during the operation after the purchase, it suddenly goes out of
building expensive equipment that is in use for a long time or brought to life solely for sale?
What do you say when you are threatened with a fine for late maintenance of engineering systems or for the shortcomings of the fire safety system?
You will most likely have to deal with this right after the deal is done while preparing the documentation for obtaining permits and licenses, and lay out around sum of money to eliminate any shortcomings or consequences of excessive savings previous owner.
Before closing a deal, order an independent engineering and technical expertise all communications, so as not to suffer significant losses comparable to the opening
new SPA project.
When buying a business, you will also acquire the remains of cosmetics. Perhaps you
lucky, and it will be high-quality products with a normal shelf life. therefore
carefully examine for the validity of expiration dates and do not purchase questionable
In conclusion, I would like to emphasize once again – carefully study all aspects
activities of an existing- Health , Medical SPA or Wellness business planned for purchase.
Good luck with your investment!