Success Steps: Undertaking the Medical Spa Challenge

Owning your own business comes with many challenges and rewards, and opening a new medical aesthetics practice is no different. For most physicians, the allure of owning a medical spa is fueled by the following:

• The promise of fewer regulated services.
• A desire to better manage reimbursement or coverage issues.
• The ability to set their own work hours.
• The ability to provide patients with the latest cosmetic advancements.
• The possibility of generating additional income.

Unfortunately, few physicians who are attracted to the medical spa arena recognize the unique trials awaiting them. Built on understanding and serving a relatively perceptive, consumer-oriented patient base, the medical spa market is out of most physicians' traditional comfort zone. Many physicians struggle with “consumer” concepts and fail in attempts to transition from the day-to-day operations of a traditional medical practice to a business entity based on customer service, sales, and marketing. While the number of spas and medical spas opening up across the US continues to climb, many are closing due to lack of growth, poor management, and escalating competition.

Tips for Success

Physicians looking to develop a functional business plan to open and operate medical spas should find the following tips helpful:

Ask the tough questions. The startup cost for either using your existing office space or building a “stand-alone” medical spa can range from tens of thousands to more than a million dollars. It's important to recognize that the physician-owner has more control in this process than one might think. With that in mind, it is obvious that solid business planning is necessary.

The first step is designing a plan that includes welldefined goals and objectives and is based on financial realities. To begin, ask and answer (honestly) these types of questions: 1.) What is my goal behind opening my own medical spa? 2.) Are my goals and objectives realistic and achievable? 3.) Do I want to retain or increase conversion of patients to and from my medical practice to my medical spa? 4.) Do I want to create a separate brand outside my current practice or enhance the one I already have? 5.) Have I done the necessary research to determine if a medical spa is a viable option for my market? 6.) Am I financially able to fund this project? 7.) Will I be able to wait out a two-to-three-year (or more) timeframe for a return on my investment? The answers will determine whether your undertaking is feasible.

Find qualified professional advisors. There is no quick-and-easy way to start up a medical aesthetics practice, nor is there a shortage of companies offering consultants and resources. Engaging the services of a consultant, an attorney, and a certified public accountant (CPA) to assist from the start is highly recommended. This is not an undertaking to tackle alone. Finding a qualified, experienced consultant who specializes in medical spa startups and who can offer a detailed list of satisfied clients who have achieved project objectives similar to your own is the first step. Make sure you check all references thoroughly.

You also need a qualified attorney who has medical- related experience and is familiar with relevant national, state, and local laws, regulations, and guidelines. A qualified CPA will help you start (and, ideally, remain) on sound fiscal footing. While the Internet offers relative ease in locating experts, a trusted colleague who has opened a successful medical spa may refer you to professionals who can serve your needs.

Determine a location. Most physicians simply add on to an existing practice; for them, location is not a concern. For others, however, deciding on a location can be a major undertaking. On average, recent research shows that most medical spa clients live within 20 to 30 minutes of their facilities. If you must determine a location for your new practice, conduct as much local demographic-related research as possible. Many resources exist to help with these inquiries—some are free (e.g., your local Chamber of Commerce and commercial real estate experts).

Settle on your menu of services and offerings. Early in the process, select the services, procedures, retail products, etc., you want to feature at your medial spa. Conducting your own market research with a focus on key aesthetics offerings will save you time, money, and aggravation. Your market research results should reveal the local demand and disclose what the competition does and does not offer. Review your competition's websites, products, services, and procedures, along with their staff credentials, and determine your competitive edge based on these findings. Rather than investing in a wide array of products and services (trying to cover every conceivable patient request), identify the most popular procedures in your area. Then, simply do them better and surpass your competition with superior customer service.

Select the right equipment to support your offerings. It is usually better to lease a piece of equipment than to buy; leasing provides you with the ability to upgrade regularly to newer machine models offering the latest technological advances. Make sure any equipment company of your choosing will replace an item easily and quickly, if necessary, and will include support or training to guarantee your staff's proficiency in the operation and maintenance of the device.

Match your staff to your offerings. Base your staff selection process on the overall services you intend to offer, filling positions in accordance with operational need, i.e., office administrator/cosmetic coordinator, laser technician, aesthetician, and general staff. Develop specific job descriptions, indicating the skill sets required and the range of compensation prior to posting and interviewing for each position. Have a priority list of requirements for each position and “weight” each skill for a meaningful measure when evaluating credentials. Note that compensation for a medical spa staff is different than for traditional medical staff. Most spa employees receive incentives for product and service performance, as staff can generate 30 percent or more in product revenue. While some physician owners hire from their existing staff, most have more success recruiting staff with medical spa experience who do not need additional training to recruit, service, and manage a medical spa patient.

Train and develop your staff. Most medical spa owners place more emphasis on managing employees than they do on training and development. To guarantee a strong foundation for your practice, offer product, service, and cross-selling instruction early in the staff training process. Clearly communicate what you want done and how you want it done. To encourage good communication between staff members, schedule weekly staff meetings. Highlight and review certain services, products, etc., at every meeting, and quiz staff on the information you want to convey to clients. Proper telephone triage is important; Ensure prompt answering and handling of calls in the way you prefer. Consider conducting telephone mystery shopping surveys every few months to evaluate your strategy and determine a more effective one when necessary.

Focus on customer service. Customer service in a medical spa is not just one part of your business—it is everything. Because your customer service efforts will affect both short- and long-term growth, you want your staff to possess a high level of the interpersonal and sales skills necessary to market your brand, products, and services. Your “clients,” (not patients) will come for the results you offer… and will stay because of the customer service you provide. Since your staff will be your best marketing tool, skill sets, attitudes, and appearances should be in line with both the business model and the environment you want to create.

Make your website a priority. Many medical aesthetics practices devote a majority of their marketing and advertising budgets to the development or redesign of the practice website, as this dynamic resource captures most of their clients. Content and design are essential to success. Be sure your website vendor is experienced in the medical aesthetics field and has a long reference list of satisfied customers. Check reference sites carefully and contact several directly with questions about their vendor experience.

Embrace strategic planning and monitor progress. Strategic planning, both short- and longterm, is critical to sustainable success. Create a small group of trusted staff to help with the planning process. Understand that a strategic plan is dynamic and will need regular review and updating. Consistent monitoring of operational methods, revenue, and costs will help you make informed decisions. Successfully managing a new medical spa mandates employing proven quality-control tactics. The proper branding of your spa, inventory control, menu-ofservices management, staff management, etc., are all areas that need to be consistently evaluated so your practice stays current and maintains its competitive edge.

A Rewarding Endeavor

A venture into the medical spa market can be a rewarding and lucrative endeavor, but it also can be perilous—and even disastrous—without taking the proper steps and actions throughout the process. Everything about your practice should represent a soothing and pleasant non-medical environment centered on pampering the client. Whether adding to a current practice or starting anew, maximize every detail from check-in to checkout for efficiency and practice “flow.” In contrast to a medical practice, an aesthetics practice has to be focused on client interest, marketing promotion, and unparalleled customer service. Applying the appropriate time and resources to research the medical aesthetics market, identify expert help, and construct a meaningful strategic plan will help ensure personal and professional fulfillment.

Jay Schroeder is a management consultant with the Allergan Practice Consulting Group, of Allergan, Inc.