Medical Spa Key No. 7: Create the Optimal Menu of Services

In many ways, aesthetic practices and med spas are like restaurants. The core of the business is customer service, and oftentimes offering the right menu can make the difference between the success or failure of the enterprise.

Just as a first class restaurant strives to create a unique menu that will distinguish it from all its competitors, you should make it your mission to offer a service menu that offers not only all the most popular med spa treatments but also the most cutting edge, innovative procedures available.  Many of the prospects you will encounter are surprisingly well informed and will be looking for a med spa that can exceed their expectations. Some of these prospects already know the results they are looking for. They will look to you and your staff to guide them to the optimal combination of services, procedures and products to help them achieve their goals. On the other hand, many of your prospects will not have a clue about the specific technologies or procedures involved -- they will simply want to know they are in good hands and will look to you to recommend the best treatments and products for them.  

You will need to decide how broad a range of services you will offer. You may decide to offer all the popular services so your med spa will appeal to a diverse, market-driven client base. Or you may decide to carve out a more specialized niche. You will need to decide your basic positioning before you formalize your menu. One of the key factors will be to find the best service mix that matches your professional expertise. If you are a dermatologist, for example, you may wish to offer a range of specialized services for treating acne. If your background is OB/GYN, you may want to develop a specialty for the treatment of leg veins. Another key factor which you may determine from your research is your best estimate of the profitability of offering a wide variety of the most popular services compared with a more specialized approach. Heavy competition in some areas has driven fees for basic services such as laser hair removal to such low levels that such services must be evaluated merely as  "loss leaders" to help build traffic for your more profitable services.

In any event, you will need to keep current with rapidly growing technology and clinical applications by attending trade shows and workshops, subscribing to industry publications, joining various associations, and opening channels of communication between your medical and spa resources. Many practitioners pondering the question of what aesthetic services to offer have come to the realization that emphasizing treatments that require a high level of skill and/or experience is perhaps the best way to differentiate your clinic from the garden variety “medical spa” offering only “basic” treatments like laser hair removal that are available on every street corner. An excerpt from the 2007 national average fee schedule published by ASAPS clearly illustrates this point: 

Cosmetic Procedures        National Average Fee

 
Abdominoplasty     $ 5,350.00

Blepharoplasty                  2,840.00

Breast aug. (silicone)                 4,087.00

Breast aug. (saline)        3,690.00    

Facelift                   6,792.00

Hair transplantation                  5,874.00

Lipoplasty (suction)        2,920.00

Rhinoplasty                   4,357.00 

Non-Surgical Procedures      National Average Fee

Botox injection     $    380.00

Chemical peel           718.00

Fraxel          1,130.00

IPL Treatment           411.00

Noninvasive tightening       1,194.00

Injection lipolysis           905.00

Laser hair removal           387.00

Laser skin resurfacing- ablative      2,418.00

Laser skin resurfacing- non-ablative        580.00

Laser treatment leg veins          462.00

Microdermabrasion           130.00

Sclerotherapy           377.00

Collagen (Bovine)           397.00

Collagen (Human)           542.00

Hyaluronic acid (i.e., Restylane)         576.00

Sculptra         1,027.00

Srtecoll, Artefill        1,180.00 

Food for thought.

Key No. 5 to MedSpa Success: Know Thy Competition

Knowing your competition inside and out is one of the most important prerequisites to opening an esthetics practice or a med spa.

Ideally, you do not want to put yourself in the middle of a host of established competitors. If you do this, you will be forced to try to take business away from your competition in order to survive. This often results in cost cutting and promotions that have a detrimental result on your bottom line. Ideally, you will be able to secure a location which will enable you to reach a largely "untapped market" in your community. You can also establish a unique "value proposition" and carve out your own niche for your special blend of services and products.

Before you make your final decision on your location, make a detailed analysis of your competition. Clip and study their newspaper ads, visit their web sites, and call them for information. Have someone make numerous telephone calls to listen to sales consultations and gather treatment menus. Have friends and family members visit competitors and schedule consultations and treatments. Oftentimes you will be surprised how the picture painted by the advertisement or web site is a far cry from reality. Once you have thoroughly checked the local competition you will know precisely what services they offer and what you will need to offer to not only be competitive but to differentiate your business from everyone else. Pay careful attention to the services and products they offer as well as the number of employees they have and the credentials of their staff. Determine whether or not they are a true medical spa or not. If they have only a token "medical director" you will want to position your clinic as one in which the physician has active involvement in every step of the process. Enlist the aid of family and friends to make visits to med spas in the area, schedule consultations and treatments to enable you to truly evaluate the playing field. Your research will help you a great deal in designing your own unique service menu and setting prices at the highest levels the market will bear. It will also enable you to offer services and products that no one else in the area offers.

A thorough analysis of the competition will help you make your med spa unique by creating a special niche that will help you stand out from everyone else. Find and fulfill a need that will make you stand out from the crowd, no matter how crowded the playing field is. You might decide to focus on a particular specialty—such as acne treatments, mesotherapy, or injectables such as Botox and Restylane. Other options are a focus on anti-aging treatments or a med spa for men. Many marketing consultants recommend developing a "signature service" which you can promote heavily and which can be your claim to local fame. No matter what services you decide to provide, let your uniqueness be your selling point.

Before you decide to transition to an aesthetic practice or open a medical spa, it is important to research the demographics and locations of competitors in the area you are considering for your location. It is critical that you find answers to each of the following questions before you take the plunge:

a. Do the demographics (i.e., per capita and family income, etc.) of your proposed location support the types of procedures you intend to offer?

b. Is there a need for a medical spa in the area?

c. Is your location too close to a competitor?

You can determine the socioeconomic makeup of your proposed location by gathering information from the U.S. Census Bureau (www.census.gov), the town clerk’s office, and local real estate agencies and business organizations in the area. Check out the foot traffic in and around your proposed site. Excellent foot traffic can provide a significant boost to a start up operation. High visibility, convenience and free parking are all extremely beneficial. Strip malls have turned out to be excellent locations for laser centers and medical spas because they offer both visibility and accessibility. If you have the luxury of negotiating a lease with an option to expand in the future you may want to consider starting small with the plan to enlarge your space and staff as your business grows. A shorter lease with options for renewal is a much safer and lower risk proposition than a long term lease.

Key Number 4 to med Spa Success: The Physical Embodiment

The "physical embodiment"  is one area where a number of med spa owners have gone overboard (in my opinion).

Building out a beautiful facility with eight treatment rooms and a waiting room the size of a ballroom is waste of money if your advertising and marketing programs are unable to "fill the seats". It is true, however, that creating the right ambience and environment for your med spa will be a key factor in your likelihood of success. Whether you are starting with just a single room or building a stand alone med spa from the ground up, it is important that you create a spa-like atmosphere for your clinic.

An aesthetically-pleasing, spa-like setting will make it clear to your patients that your med spa does not treat sick people. It will be crystal clear from your decor and appointments that your facility provides elective services to help your patients improve their appearance. Your goal is to create an environment that is soothing and relaxing. Be sure that your facility makes patient comfort and pampering a priority. Your treatment rooms should not look or "feel" like medical exam rooms, and you should sound-proof your rooms to the best of your ability. The ambience and decor selected for your waiting room, consultation offices and bathrooms should also make it clear that this is not a "medical" office. Your spa-like environment will also have a positive effect on your staff and help make them more productive and happy to work in such a pleasant environment.

When designing your space, it is also a good idea to make sure all your rooms are multi-purpose. This will allow you greater flexibility in the future as you make continual minor adjustments to your menu of services. Be sure that when a prospect walks through your door she is immediately impressed and delighted with your facility. Just as with real estate in general, curb appeal and first impressions are critically important.

Pay close attention to every detail in your waiting room and front desk as these are your patients' first points of contact with your med spa. The first impression of your prospects at this stage of the process sets the stage for all the following points along the way. Be sure that an adequate amount of comfortable seating is readily available and the decor is striking. In addition, make sure that all your up-to-date marketing materials are on display and well organized-- conveying a consistent brand image. Rather than having a waiting room cluttered wit h newspapers and magazines, recognize that everyone in your lobby is a "captive audience". Your waiting room is the perfect opportunity to professionally indoctrinate all of your customers with your educational and marketing materials including point of purchase patient brochures, before and after photographs and other educational materials. Be sure to have educational DVD loops running continuously throughout the day explaining the services and procedures that are available at your med spa. Many med spas are able to incorporate an intimate, smaller waiting room separate from the lobby which is ideal for fostering a soothing, relaxing and educational environment. If you offer a dual medical/med spa facility try to keep the waiting rooms for sick patients vs. esthetic patients separate.

Your facility should facilitate your mantra that "customer service" is king. The treatment rooms should also be clean, neat and beautiful. Tranquility, privacy and quiet should be emphasized (I recently saw a new med spa under construction in Manila with an "open ceiling" plan which makes privacy and quiet in the treatment rooms an impossibility). Strive to keep your waiting times to a bare minimum, and work on an action plan to deal with tardy customers without causing ill will. Water, healthy teas, etc. should be available at all times. Keeping an emphasis on aesthetics, privacy, comfort and tranquility will help you attract and maintain the desired patient base for success.

The Third Key to Med Spa Success

As the medicalspamd.com blog continues to tell us the ongoing saga of med spa woes and the struggling and/or controversial med spa franchises and colossi (or colossuses) such as American Laser Clinics, DermaCare, et al, I would like to try to continue an examination of the various fundamentals necessary for establishing and maintaining a financially viable med spa business model. As I read about the various blogs detailing the colorful exploits of the enigmatic medical spa founders including Mr. Mudd, Mr. Jones, Mr. Engelmann, Mr. Buckingham, et al-- I also cannot help but wonder if it is not really the same person flying from city to city stirring up all this anger and frustration?

Key to Success No. 3: Location, Location, Location.

The three most famous words in real estate are also very important for the location of your med spa. Selecting a poor location can make everything else you do a chore. If your location is hard to find, or is in an area with unsuitable demographics, you will find it very hard to build the patient base you need for success. Some of us have turned down higher priced retail facilities with excellent walk-in or drive by traffic potential in favor of hard to find industrial or "medical" spaces for budgetary or other reasons. Don't forget that if you try to save money by setting up a "destination location" you will have to spend significantly more on marketing and advertising to generate adequate traffic. Choosing a highly visible and desirable location with convenient parking is one of the most efficient ways to insure an adequate flow of patients right from the day you open your doors. In most cases paying higher rent for good foot traffic and the right demographics saves money in the long run. Keep in mind the fact that many med spas spend between $10,000 and $20,000 per month on advertising-- even more in some cases-- when you are haggling over rent for various locations. Don’t be “penny wise and pound foolish”. The exorbitant rent necessary to secure a first class location may prove to be insignificant when compared with the cost of driving patients to a “destination location”.

Since medical spas offer purely discretionary services that are in most cases moderately expensive, in most cases you will want to establish your clinic in the most upscale neighborhood you can afford. As a general rule, most patients like to visit a clinic that is within five miles of their homes. Before you decide on a particular location, you need to evaluate the demographics. This is a make or break research project that many med spa owners have omitted and paid the price down the road with business failure. By conducting primary research such as focus groups and surveys you can learn a great deal about the community. You can identify the socio-economic make up of your proposed location by obtaining information from the U.S. Census Bureau (www.census.gov) as well as contacting city offices, local real estate firms and the local chamber of commerce for demographic information. You can also obtain this information from professional consultants as well as through Internet research.

It is also usually a good idea to try to find a location where you will not be right next door to a number of competitors. If you find an area where no other med spa is located within a five mile radius you have the opportunity to be the only game in town for your nearby residents.

Med Spa Success Key No. Two: It Takes Money!

In an attempt to perhaps encourage a shift of the current focus of this blog to helpful suggestions for business success (rather than focus entirely on problems with one particular franchise and equipment and clinical issues) I am continuing my post with a discussion of a number of the myriad factors that will make the difference between your success or failure in this enterprise....

Key No. Two: It Takes Money to Make Money.

 
Everyone knows that it takes a fairly substantial capital investment to start any business. We have all heard stories about businesses being started with an initial investment of only about $200.00 years ago (the Curt Carlson (Radisson Hotels, TGI Fridays, etc.) legend), but that doesn't happen very often in today's world. If you don't adequately capitalize your business from the outset, you will not be able to properly take care of any of the 15 keys to success and you will fail. Start up expenses are important, but equally important is your ability to provide an adequate cash flow for the business during the first several years to keep the boat afloat as you make the mistakes along the way that we all make-- no matter how well prepared or well funded we are.

Many of us think nothing of spending $500,000 or more on our education, but then try to start a business on a shoe string. For your med spa, even a single room with adequate equipment and supplies may set you back from $100,000 to $300.000 depending on whether you lease or buy your equipment and how many devices you decide to purchase. Oftentimes you will be able to negotiate a substantial portion of your build out expenses with your landlord, and even roll a certain percentage of these costs into your lease. For a larger med spa, many physicians have financed over a million dollars for the proper set up (my build out of 2800 sq. feet -- for example-- was $250,000 and my equipment retailed for over $500,000). Once you are established you will face difficult decisions each day about how many employees to hire, how much to spend for equipment and product, and how much to allocate to advertising and promotion. As a general rule, the more you spend on advertising and promotion the higher your gross revenues will be-- provided you have adequate staffing and your personnel are well trained, motivated and suited for the task. Since sales of aesthetic services and products are 100% discretionary-- as opposed to traditional medical services which are largely paid by insurance and are generally more of a necessity-- the difference in sales results with an excellent and properly trained staff as compared to a mediocre and poorly trained staff can be astonishing.

A big mistake that many med spa owners have made is that as expenses rise and profits shrink they often panic, throttle way back on advertising, and try to "get by" with a smaller staff. The end result of this scenario is that the clinic gets into a "death spiral" which oftentimes leads to insolvency or bankruptcy.  Don't allow this to happen to you. Start with a sound business plan and adequate financing for at least twelve months. If you sell treatment "packages", don't succumb

Med Spa Guy

MED SPA WARS

A LONG TIME AGO... IN A GALAXY FAR, FAR AWAY...

 
It is a period of med spa wars throughout the nation. Rebel franchisees, striking from all corners of the United States and in particular from a weblog known as www.medicalspamd.com .... have caused the collapse--or near collapse -- of several of the leading med spa franchises. Many other med spa owners and physicians attempting to cash in on "med spa mania" are also struggling financially. How do you make a profit at this???

No doubt, as anyone who has been reading this weblog lately has discovered, the operation of a "medical spa" is by no means an easy proposition. Certainly-- as many of us have discovered-- it is not a get rich quick scheme. For some of us it has been a "go broke quick" reality. What can we do to increase our likelihood of succeeding in this challenging enterprise? I have come up with "15 keys to success" in an attempt to share some of the things I have learned getting arrows in my back over the past five years. This exercise will hopefully stimulate some dialogue from others who may be able to provide additional insights and suggestions. Rather than just "slinging mudd" at various nefarious individuals out there (who shall remain nameless) I hope we can move into some helpful debate about the most essential fundamentals of the business. I will start with the first  "key to success" and deliver several more a few days down the road.

Key No. One: Recognition that a Med Spa is a Business.

Even though there are a number of viable ways to add aesthetics to a "traditional" medical practice, many physicians who decide to expand to aesthetics seem to forget that med spas are similar to any other retail business. This means that all the basic principles applicable to other businesses-- from fast food to night clubs-- apply to medical spas as well. Let's start by mentioning a few things that medical spas are not:

1. "A Sure Thing": A successful med spa is certainly not a "sure thing". Just because you are doctor, or because you spend a great deal of money on equipment and/or a beautiful build out, does not mean that your venture will succeed. You will need to do all the "right things" that any business owner has to do to succeed with this venture. You will need a solid business model and business plan, and you will need to execute on this plan. You will need to hire the right people, train them properly, implement cost effective marketing programs, purchase the right equipment for your needs, and work hard. And you will find out quickly that-- without an emphasis on "sales"-- no business can thrive.

2. "A Profession": During the "golden age of medicine" it was possible to earn a decent income in medicine without the need for advertising, marketing and "selling". Advertising was traditionally frowned upon by the medical community. The golden age has been replaced by managed care.

3. "A Calling": Among the options that exist for doctors wishing to move in an aesthetics direction are the "100% med spa" option, the "50%/50%" option, and the "single room" option. Starting your med spa as a "sideline" -- whether it is a single room dedicated to aesthetics or a side-by-side med spa operated alongside your existing clinic-- can be the most conservative approach and is probably much less risky that a separate, stand alone facility. However, even the single room approach has its challenges. No matter what scale of operation you implement, it will still require compliance with every single one of these 15 keys to success.

Recognition that a med spa is a business requires you to embrace the fact that sales is the cornerstone of any successful business. Sales is a requirement-- not an option. The fact is that most people simply do not like sales. Many of us are afraid to sell because we think that a successful salesman has to be pushy nd obnoxious. Medical professionals have lived for decades in a world in which sales was considered either unethical or beneath their dignity. If you are not able to embrace the critical importance of sales to your business you will be doomed to fail. Marketing and advertising are also important factors, as these activities will cause your telephone to ring and prospects to walk through your doors. But the necessary "internal sales" activities that take place inside your facility are even more important. Salesmanship is a skill and an art that needs to be learned and fostered, and it is the lifeblood of any successful medical spa.

In addition to embracing and fostering sales and marketing, you will need to have a focused commitment to maintaining up to date profit/loss statements and striving for a satisfactory return on your investment. You will need to do your homework and make sure you understand the myths and realities of the economics or "metrics" of a successful med spa. You need to commit adequate financial resources to your venture so you do not set yourself up for failure. You will need to cover all of the bases discussed in these 15 keys to success, from your location to your hiring practices and your ongoing staff development. In the initial stages of your venture, you will want to enlist the help of legal and financial consultants to review your business plan with regard to local and state regulations, zoning issues and privacy laws. You will need to arrange for the necessary insurance policies to cover all of your operations and property. The issues you encounter in your preliminary investigation may have an impact on the location or set up of your medical spa and the services you decide to offer, as well as the staff you decide to hire and the procedures you establish for providing treatments, charting and storing records. You may also wish to enlist the assistance of marketing, public relations and web site experts to assist you in these areas as well. All of these programs should be in place before you open your doors.