It’s All True: All market indicators
point to the markets preference for non-surgical
treatments. 2,000 Americans will turn 50 every day
(1 every 8 seconds) for the next 20 years. Studies
show the number of Americans over 55 will grow by
60% in the next 20 years and their buying power
will exceed $2 trillion by 2007. Wow.
In fact, the news gets even bigger.
Americans spent just under $9.4 billion on cosmetic
medical procedures in 2003. In 2004, American consumers
spent $44.6 billion on anti-aging products and services,
and the total anti-aging market is projected to
reach $72 billion by 2009 (Business Communications
Co., Inc., February 2005).
However, there are problems. Right
now, Medical Spas are like the Wild West. Physician
practices, Day Spas, cobbled together franchise
chains, add-on clinics, and even hair salons are
taking the title of Medical Spa or laser clinic.
So while the opportunity is there, it would be wise
to take note of the old cartographer’s adage when
marking unknown or dangerous territories on the
map, “Here be dragons”.
Here be Dragons:
The current system is outdated and inefficient,
relying on a fragmented delivery system of individual
physicians (often Plastic Surgeons and Dermatologists
but including a growing percentage of Obstetricians
and Gynecologists, Family Practitioners, and Internists).
Physicians are offering "add-ons" treatments
to their main scope of practice and competing against
their immediate neighbors without a specialty offering,
cohesion, or scale. The idea in most cases is to
snag patients with some sort of “soft” offering
and then kick them upstairs for more invasive procedures.
While these new technologies have lowered the barriers
to entry in some ways, (evidenced by the growing
number of physicians entering the marketplace) the
influx of these outside physicians is proof that
this is a new market that is not currently "owned"
by any existing specialty. This new paradigm of
cosmetic medical technologies means that cosmetic
medicine is becoming more and more “businesslike”.
Those physicians who understand and embrace this
new paradigm will survive. Those who do not will
watch as the market passes them by.
The increasing development of
effective non-surgical medical technologies has
made a scalable and replicable solution possible
for the first time. IPL (Intense Pulsed Light),
RF (Radio Frequency), IR (Infrared) devices, Clear²
PDT, Pointé Lift, and other developments
mean a steep new learning curve for doctors. What
equipment to choose, how to bring in new patients,
where to get training, how to compensate staff.
It pays to learn from the experience
(and mistakes) others have made. If you’re looking
to enter or expand as a medical spa, here are a
few tips to consider when planning a medical spa
start-up or expansion.
Charts and Smiles:
Open a medical spa and your office is a never ending
stream of sales reps and advertisers (Always smiling
and usually with charts.) who are only there to
“help you grow your business”. The charts and smiles
crowd will turn you green with envy as they describe
how successful all of your competitors are, show
you the before and after pictures, and present charts
with big red arrows that go up and to the right.
What should you do? Educate yourself. No one will
ever work harder on your business than you.
Never trust a skinny chef:
If it doesn’t make sense to you, it’s probably BS.
I’m commonly astounded by the day spa consultants
that have assumed the title of “medical spa guru”.
Keep your eyes open. Most of these new experts drop
lots of names but few phone numbers. Anyone offering
consulting services should be happy to give a list
of references and more importantly, a list of competitors.
The only real medical spa consultants worth hiring
are the ones already running successful operations
themselves. Call a few nationally know medical spas
and ask for recommendations. Successful business
owners are usually happy to share their know-how
and experience.
Medical means physician:
If you are not a physician, you can not “own” this
business. You may own the building, you may pay
the staff, you may have a franchise with a “medical
director”, and you may think you’re in charge. It
doesn’t matter. All medical law is designed, written
and interpreted to keep a physician independent
in medical decision making. That means that if you
are a non-physician in this field, the physician
providing medical oversight has the power to “pull
the plug” at any time. There’s also this to consider.
What constitutes adequate medical oversight is decided
by state medical boards. The board members making
the rules are physicians themselves, some of which
may be loosing money to “medical spas”. It’s never
a good idea to enter a business where the competition
can change the rules at any time, but that’s exactly
where the current crop of franchises are. If you
don’t have a physician on-site and seeing every
patient before their treated, you’re in danger of
having the rug pulled out from under you. Hard.
Big dogs eat little dogs:
This is not a level playing field. I often tell
physicians that this business is like opening a
women’s shoe store inside your practice. The market
is going to decide who wins and loses. If you don’t
have absolutely compelling answers to this question,
“Why would a patient choose to come to me over my
competition?”, wait until you do. (If your answer
is price, start over.) A copy-cat strategy is a
no-win business plan. The next five years will see
dramatic and disruptive changes in this marketplace.
Large, well financed medical businesses with smart
physicians and high quality care are going to open
up next door to you. If you’re not well established
with deep roots, you’ll be gone.
Financing is easy. Financing smart is hard: Speak
the words “Medical Spa” as a physician and you’re
everyone’s best friend. Banks, lenders, technology
companies will all have big smiles on their faces
and their hands out, ready to lend or finance anything
you need.
The $80,000 towel dryers:
Choosing the right technology is one of the things
that will let you move ahead a step, or put you
in cement boots where you stand. I always think
of the way one physician described the pair of IPL
that he’d bought; as $80,000 towel dryers. Before
you decide on which system to buy you’re going to
need to crunch the numbers. How many shots will
the IPL heads last for until they need to be rebuilt?
How much support is included? What kind of training
is provided? Does the device work better than its
competitors? Before you sign your next few house
payments away, make sure of your technology decisions.
• Leasing is the best way to
go if you want to pay for your equipment as you
use it while preserving your capital. Many of
the technology companies have delayed payment
plans as long as six months.
• Buying used equipment is often the best way
to save money if cash flow is not an issue. (We
purchase used medical lasers and IPLs online from
a broker we trust.)
Don’t guild the
lily: Cash flow is a problem many start-up
medical spas face. Revenues and growth projections
are commonly exaggerated in the excitement of a
new business. Before you invest in embroidered leather
treatment tables, make sure you can pay your bills.
One medical spa startup spent $350,000 on build
out and didn’t have any money left to attract patients.
They were out of business in four months.
More information is available at Medical
Spas Online.
More articles.
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