De Novo Growth Strategy for Med Spas
For many healthcare organizations, the question is not “To grow or not to grow?”—it’s “How do I grow?” One avenue of growth is through a de novo strategy. There are several considerations for how you can launch a new med spa location from a “blank slate.” In this article, we discuss the key components of a de novo growth strategy and how it compares to other options.
What’s the Difference Between De Novo and Acquisition Strategy?
When comparing the two approaches to growth, it’s helpful to start with a few definitions.
A de novo growth strategy is when a med spa scales its business by opening a new location from the ground up. The med spa’s management will find a new space, hire a new team, and recruit new patients. The new location is typically under the same brand as the original location(s). To learn more, read these questions to ask before opening a new med spa location.
On the other hand, an acquisition strategy is when a med spa purchases another existing med spa that’s already in operation. Acquiring an existing med spa is an effective way to hit the ground running with a new location.
Skytale Group helps clients with both de novo growth and acquisitions. The chosen method will depend on the med spa’s vision for growth and priorities for their business.
3 Benefits of De Novo Growth Strategy for Med Spas
If you’re a med spa or MSO owner considering de novo growth, here are a few benefits to consider.
- Replicate your brand and culture across locations. De novo is a blank canvas. By opening a brand new venue and hiring new staff, you can instill the values, personalities, and culture that exist at your other locations. You’ve put in the work to create a brand. Now, you get to have the reigns in expanding and replicating your secret sauce in a new location. (Acquiring an existing location, on the other hand, requires integrating two different brands, cultures, and teams.)
- Keep your own systems and technology in place. You already know what works at your original location—so you can take that model and do it again. You have fine tuned your service offerings and know what technology to buy. And since you’re hiring, you don’t have to re-educate an existing team on new systems or services.
- Make your own hiring decisions. By the time you’re opening a second (or third, fourth, fifth, location), you know what you’re looking for from your staff and leadership. You can hire team members who are a good fit for your culture right off the bat and train them your way.
De Novo Growth Considerations
While de novo growth might sound like every entrepreneur’s dream (and it can be!), there are some factors to consider before you go down that road.
Have Cash Up Front
With de novo growth, you’ll need to be able to fund your new space, equipment purchases, and team. Purchasing or leasing a space, building it out, and stocking it with inventory requires an investment before you ever start earning revenue. But if you can avoid paying for bank lending, your start-up will be even more profitable
Location is Key
It starts with the location you choose. Does it fit your brand and demographics? How does it compare to what else is available in the area? Do your research on choosing the right location to expand your business. As you know, location affects profitability.
Establishing a strong brand is a must before launching new locations under the same name. For example, when customers are familiar with your business and services, it’s easier to get patients in the door at the new space. Think of the excitement when a popular new fitness, food, or coffee franchise announces it’s coming to your neighborhood. If you can build that brand recognition before you open your doors, you’ll have customers (and members) on day one.
Additionally, do you know your business’s “secret sauce”? The patient flow, recruitment strategy, and team operations are all elements that make a med spa run smoothly. If you can identify your secret sauce, you can replicate it in de novo growth.
Slower Ramp-Up Period
The start-up phase of a new location is usually slower with de novo. If you acquire an existing practice, you already have a financial foundation, cash flow, a strong location, and a team in place. For de novo growth, marketing the business before opening day can help you get off the ground more quickly.
There are ways to speed it up, though. Membership plans, early discounts, and founder pricing are all ways to get customers in the door.
Skytale Group Can Help Your Practice Grow
When med spas hire Skytale, they’re hiring a team of experts in aesthetics. Our aesthetics consultants have helped med spas across the country expand through de novo strategy. We use financial analysis to guide a strategy focused on expansion.
Our consulting services provide clients the roadmap they need to grow existing practices, centralize services, expand their footprint through acquisitions or start ups, and position themselves for exit. Contact us today to start your partnership with Skytale.