Paying attention to your cash flow, brand loyalty, and staff performance can tell you when it’s time to open a new location

Say your medspa is already successful. Your clients love what you do, your revenue has you fanning yourself with dollar bills, and you’re already dreaming about the extra juice a new location would bring. But expansion isn’t easy, and one wrong move could seriously set you back. How do you know your current success is a strong enough foundation to build on? What data do you need to make expansion a smart play?

Luckily, there are signposts everywhere for those who know where to look. Here are some of the most important indicators that your medspa is ready for expansion.

1. You’ve been in business for at least two years

Three core principles guide business expansion: stability, consistency, and growth potential. Your medspa needs to have the cash for a smooth transition period, deliver a sterling client experience every time, and know there’s demand that its current capacity can’t meet. Every indicator that’s about to follow on this list ties back to at least one of these ideas, and you’ll get a sense for all three by checking the first box on the list: operating your business for at least two years.

If you’ve collected data throughout those years, you can use it to take a bird’s-eye view of the business. Are revenue, bookings, and cash flow trending in the right direction? Have you buffed the inefficiencies out of your workflows and refined your menu to maximize client delight? You need a clear view of where your business stands before you can chart a course forward.

Plus, unless you’ve got the cash reserves to fund your expansion out of pocket, the two-year mark is critical for lenders. It shows them your medspa is no fly-by-night operation, and you have the experience to pilot a successful expansion

2. Your tech stack is rock solid

Medspas may be the most tech-forward branch of the medical aesthetics tree, and that extends far beyond treatment. Smart booking, AI help bots, integrated inventory tracking — great medspas use tech to elevate every aspect of the business. If you’re planning to expand, you and your team need a deep familiarity with all the tools you use to deliver exceptional client experiences. Knowing the tech inside and out can help you decide whether this suite of solutions is right for the long haul. If so, you can more safely rely on your original location to run smoothly while you lay the groundwork for the new spot.

Of course, software does more than keep the gears turning; It also shows you where they could use some grease. Opening a new location means having to parse a lot more data, whether that’s provider performance or average client spend (ACS). You need to know your tech will be able to generate actionable reports that include multiple locations and allow you to focus on each medspa in isolation. That ensures you can see the big picture, manage the minutia, and keep moving in the right direction.

3. Your cash flow stays healthy

Positive profit margins are never bad news, but they can be deceptive. If you’re writing off expenses and amortizing investments (and you should be), your business can have exciting profits on paper but still have no cash on hand. Credit can compound the issue, as credit card sales can take up to three months to hit your account. As a result, you can see amazing profits and still run into trouble paying employees or vendors.

Now consider cash flow. Positive cash flow means you’re not at risk of missing payments, even when you’re waiting for accounts receivable to come in. That’s valuable in day-to-day operations, but it’s even more important when you’re expanding. New locations are expensive, and they can take a long time to start generating returns. Your cash flow had better be hitting the gym if it’s going to carry you through that process, especially if you plan to finance the new location with a loan. The exact amount you need will vary, but you should project at least 13 weeks of cash flow to know what to expect.

4. Your clients love your brand

In the early days, your second location will rely on your existing reputation to help fill its books. The more sparkling that reputation, the stronger your takeoff jets will be on launch day. You’ll need to combine internal and external data to gauge that reputation. What is your average star rating? How many clients are referring their friends? How do people talk about your medspa on Yelp, Google Maps, and social media? Are you looking at a sea of five-star reviews and heart-eye emojis, or is there still room to improve? You’ll need good vibes only to get the go-ahead.

Your brand is how you communicate your reputation to your clients, so you’ll need a strong one to set the new spot up for success. The more identifiable and consistent your brand, the more easily clients will connect your new location to your excellent reputation and start booking in kind.

5. Your team is full of stars

Opening a new location is a team effort. Before you split your focus with an expansion, you need to know you can trust your existing staff to keep things humming along. That starts with performance. Providers should consistently wow clients; support staff should never miss deadlines or drop details. If any roles aren’t being filled to your high standards, find the staff to fill them. Remember that camaraderie is also key. A team full of communicative, committed coworkers can lift each other up, even if things get rocky.

Your new location will need staff, too, so you’ll want to have onboarding down to a science before you start bringing in new faces. New hires should get quick and effective training on all the products, treatments, tools, and procedures that power your medspa. Whether that means e-learning courses, webinars, hands-on instruction, or a mixture of the three, you need to know it works so you can give clients the care they’ve come to expect from your brand.

Opening a new location takes lots of careful planning, and it’s vital that you start out on the right foot. As long as you’ve covered these bases, you’re well on the way to building your medspa empire.