The health and wellness market is a $500 billion industry bolstered, in part, by a 500% increase in the number of aesthetic procedures performed in the last 5 years. Peak demand for medical spas, cosmetic medical centers, wellness centers, and age-management institutes is on the horizon.
Physicians who are prepared to answer this demand will have an opportunity to set the standard for excellence.
Though you need to pay full attention to your patients, there is still the matter of the business you are running. Not only is it important that you have a business plan and a marketing blueprint, among other business-related specifics, but also that you adhere to every board, ruling, regulation, registration, license, and recommendation in order to be compliant and protect your patients and your facility.
Over time, I have encountered a wide variety of myths and misapprehensions regarding the management of a successful medical spa. Let us dispel some of the most notorious myths and, in the process, correct some of those misapprehensions.
MYTH: “Medical spa” equates to instant revenue.
REALITY: A solid business plan can lead to a successful venture.
As with anyone who starts a business, you have, at best, a 50-50 chance of succeeding. The number one reason most businesses fail is because they don’t plan properly and undercapitalize their investments.
In addition to making a significant financial investment, it takes a lot of hard work for you to land on the positive side of that closing ratio. There is more to consider than just the highly sought-after services you will offer.
Building a successful medical spa practice, cosmetic medical center, wellness center, or age-management institute is a process that requires patience and serious planning. It takes time and attention to detail to build, maintain, and grow a successful practice.
Whether or not you seek start-up or expansion capital—or work to keep your investment strong—a business plan will help take your business and organization to the next level.
It is essential to the success of your medical spa or cosmetic medical practice, and it is the guide for your business—its structure, services, products, staffing, resources, budgeting, financial management, and implementation.
A solid plan helps you visualize your goals and keep you from floundering in a sea of competitors.
After your firm is up and running, you may want to expand your office or facility to accommodate new services. In that case, be sure to secure the necessary building permits and be aware of the actual time it can take to complete construction.
Develop a Web site—or, at very least, some kind of online presence. Make time to network in your area, as well as offer free lectures and seminars for the general public.
In addition, open your calendar to public relations opportunities and create a budget to cover essential marketing efforts. However, before you can implement any of these options, you will need to plan very carefully.
MYTH: If you build it—the spa—they will come.
REALITY: If you execute a solid marketing plan, then they might come.
Perhaps you are the expert in your field, have the latest equipment, and run the most beautiful office. But don’t expect clients to rush in just because you have hung your shingle.
You have to actively promote your business. You have to tell your clients and prospects that your medical spa is the only place where they can receive your signature services.
“One-hundred percent of your aesthetic business relies on your marketing plan,” says Anca Saladie, senior consultant at Beautiful Forever, a medical spa consultancy. “You must have a plan that focuses on your clients, products and services, promotion, and pricing. Marketing includes how you design and decorate the facility, the private-label and other retail products you provide for at-home use, and the collateral material available, such as brochures and direct mailers.”
Marketing consultant Robyn Albaum adds, “You need to attract your target market with a well-planned campaign that includes ads, newspaper and journal articles, radio spots, [a] Web site, blogs, and e-mails, depending on your demographics and budget. Think retail—your new business relies on a marketing blueprint as an important tool that can be implemented by you or your marketing agency to help ensure that your investment is wisely allocated.”
MYTH: Once a client, always a client.
REALITY: Clients rarely stop shopping for the best services—and deals—on the market.
Satisfied customers are key to your profitability, and it is vital that you measure their satisfaction level on a regular basis. Common measurements include surveys, retention rates, and customer service inquiries.
In-office consultation is an important avenue for increased success and should be a part of every client’s experience. Your staff should be trained to follow the same procedure for every consultation and to ensure that you are providing the highest level of satisfaction.
As your clients and prospects may find you by word of mouth, the Internet, or in the yellow pages, it is up to you to make the most of each client contact and track their experience. You can identify what is working within your practice and what needs to be revised.
MYTH: If the equipment is expensive, it must be good.
REALITY: Be picky. Cost is not the defining feature of a good piece of equipment.
At some point, you will need to add to your service line in order to keep up with current and burgeoning demand. A clear understanding of your target market’s demographics and a competitive analysis are important when making a purchase decision.
You want the best bang for your buck, so look for equipment that can serve many of your clients’ needs. Be sure to rate equipment choices based on proven results, “gold standard” status, broad appeal and/or application, combination therapy capability, and the ability to generate high revenue. Find out who is endorsing the equipment, including major associations.
Prior to purchasing new equipment, you also should examine the possible return on investment (ROI). Will the equipment need replacing within a few years, or will it be cost-effective for 4 to 7 years, thus providing a better ROI? In addition, learn your financing options and negotiate the best rates.
“The physicians we work with are trained to make proper medical decisions and perform successful surgeries,” Anca says. “However, they are not taught business in medical school and do not typically have the accounting skills and managerial experience to make decisions regarding business development, which will ultimately have a major effect on the financial viability of your practice. Having an expert assist with these areas, as well as with choosing equipment, can make a big difference in revenue.”
MYTH: We can tell we are doing well because our revenue is higher than last month/year.
REALITY: Maintain operational efficiencies, and review numbers and key metrics. Be vigilant.
Monitoring incoming dollars is always important, but don’t stop there. You must stay on top of all the factors that may be affecting your practice. Correct what isn’t working, and capitalize on what works best.
Operational efficiencies are critical in sustaining profitability and ensuring a stable and successful medical spa business. Metrics measurements can tell you where your business is headed.
Businesses in the cosmetic medical sector should use quantitative benchmarks and techniques to monitor the elements that impact profitability, efficiency, and overall effectiveness.
When you rely on solid numbers and key metrics—rather than subjective measures such as hearsay and intuition—you have an edge on success. You will need to regularly measure financial, client, consultation, demographic, and lead metrics in order to track your efforts on an ongoing and cumulative basis, as well as review the results on a monthly or quarterly basis.
Share your goals and findings with your staff so they can continue to build their skills.
MYTH: A medical spa is not much different from my successful practice. If I keep following the same model, I’ll do fine.
REALITY: You are moving into a very retail-driven market that may be completely new to you.
Market research shows the annual average revenue of a medical spa tops $1.5 million, up to 15% of which is collected via retail sales. Aesthetic surgery and related services are not covered by insurance, so patients will have to pay for services out of pocket—cash, credit, and any special financing programs you might offer.
You need to focus on the patient’s overall experience, your facility’s ambiance and atmosphere, and any retail products needed for the patient’s home-based maintenance. Most clients are happiest when purchasing skin care products at the same location where they receive aesthetic services.
In fact, your patients will greatly appreciate shopping for products that are designed for their needs in an environment in which they know they will receive your expert advice.
In addition, a well-trained, well-informed, professional staff proficient in selling can add 30% to 40% to your total revenues.
As well as offering aesthetic services and skin care products, you may decide to break the gender barrier and market your services to men. To accomplish this, you must step outside the standard office practices you may be used to following.
Practices may want to offer gender-specific services, such as designated office hours for male patients, brochures directed specifically at men, as well as before-and-after photography of male patients only. Keep the décor neutral, and work to ensure that you offer your male clients a sense of privacy and comfort.
MYTH: I can count on my staff to know what to do.
REALITY: Implement a training and education program to maintain a “cutting edge” staff.
Standard operating procedures are the backbone of every successful business and practice, so plan your strategies and train, train, train. After you have taken the time to hire the right people for your practice, keep them up to speed, or even ahead of the game, by providing ongoing education.
Don’t leave anything to chance, and don’t make your staff guess what you want. Put clear protocols in place for everything, including phone inquiries, consultations, and every treatment you offer.
Even though potential clients have already made the decision to “buy” treatment, they may still be shopping around for the best place to get it. Your goal is to show them why your practice is ideal for their needs.
Conduct spot checks to make sure consultations are done correctly, and follow up regularly with role-playing and training.
MYTH: Issues tend to work themselves out.
REALITY: Be proactive and correct any missteps as you go along.
Conducting a practice assessment can root out problems that affect your business. Ask a professional—such as an accountant, manager, or consultant—to evaluate your business.
Many practices face at least one issue that prevents them from reaching the level of success they seek. By doing some detective work, you can discover the root problems that may be holding you back. The key is to take action.
Such an assessment “can help determine your practice’s strengths and weaknesses,” explains marketing consultant Doug Sce.
|See also “A Work in Progress” by Cheryl Whitman in the February 2007 issue of PSP.|
“You need to establish if the timing is right to expand to a new location, which location is best for hitting your target market, if your staffing is complete or needs restructuring, as well as a wide range of other important factors,” he notes. “In many cases, an outside, unbiased party is your best choice. But don’t wait for problems to strike. Set appointments for regular assessments so you will always be on top of things.”
KNOWLEDGE IS POWER
As an aesthetic specialist, you know your craft and have the skills and sensibility to perform the procedures to help the young at heart look the part. Beyond that, you need to take the time to get the most up-to-date information to best serve your patients.
Cheryl Whitman is a published author and a popular speaker, and she has been a beauty-industry consultant for more than 20 years. As founder and CEO of Beautiful Forever, she now spearheads a successful team of medical-spa consultants and business professionals. For more information, call (877) SPA-MEDI or www.medicalspaconsultant.com.