Medspa Q&A: Planning ahead for your medical spa.

This post is part of Medspa Q&A, questions that I receive from physicians. If you have a question you'd like me to answer, you can email it to me here.

Q&A.jpg Hello Jeff,
Thank you for your reply.

I graduated medical school in the summer of 2003, in Denmark, Copenhagen, and have since completed my internship (11/2 years) and worked temporarily in a general practice in Norway. I am currently on maternity leave and will be starting a PhD program in the summer of 2007.

I’ve always wanted to be a plastic surgeon. Plastic surgery seemed like the natural choice for me as I’ve always been very creative and love the combination of aesthetics and surgery. I love the challenge of correcting disfigurements and doing cosmetic enhancements.

I’ve had several opportunities to shadow other plastic surgeons and found their work exciting, but also somewhat crude and that’s why I really like the idea of non-surgical cosmetic medicine.

I have had plans for a long time of running my own clinic someday. My sister is a cosmetologist/spa manager and she introduced me to your website. We have often talked about working together and incorporating our different, but very complementary skills into a health enhancing, cosmetic business.

Until I read your website, I had no idea that medical spas existed. It seems like the perfect model for us. We have already committed to opening a medical spa.

I was hoping that I could get some information from you on how to start up such a practice, what I’d need and where I could be taught how to use fillers (e.g. Restylane, Botox, Liposolve, laser, point lift and other anti-aging techniques. I plan to learn as many techniques as possible at the same time as I’m doing my PhD. A bit of a mouthful, I know. I hope to start up the medical spa shortly after the end of my PhD program, which is roughly going to last 3 years. It will probably take longer than I anticipate and I’m also ready for that.

I’d be happy for any advice or information you could provide.
Dr. E B...

Ask a question, get an answer. Here goes...

It’s certain that I know a lot about my own company Surface. I’ve opened a few clinics myself and consulted more than a few doctors opening medical spas. You’ll have to decide if what I’m about to write makes any sense for your situation.

Decide how much money you’ll need to make: Since you’re at the beginning of your career, you’re in a much different situation than the many physicians I deal with who are looking to change their practice or add to an existing clinic. One of the benefits is that your overhead is probably as low as it’s going to be for a while. (Existing practices offer different challenges.) So ask yourself; How much money do you need to make.

Many doctors make the mistake of opening a new medical spa and only after they’re in business do they figure out that they’re not able to make the money they need to take home and keep the business afloat. When you’re thinking about your startup and recurring costs, keep in mind that you’re going to have to eat. Can you live on the cheap for a while? There’s a distinct possibility with any business. Don’t think that you’re going to be taking home 20k the first month, or any month during the first year.

Decide what kind of medical spa you want to start: Perhaps the most common problem that doctors get into is the leaping before you look strategy of business. Here’s a tip: Day spas do not make any money. As a rule, the average margins for day spas in the US is 6%. Medical practices generally lie in the 50-60% margins. Physicians hear day spa and start thinking this is great. The day spa will bring in all these patients and my hard working staff will kick them upstairs for face lifts and boob jobs. Sorry. It doesn’t work that way.

So, decide very carefully about the medical spa you’re starting. The answer to this question will largely depend on what your own background is and where you have connections. What is your current situation? How is it structured? What’s the legal and liability issues? Who owns what? What’s the offering and pricing? Who’s responsible for the advertising? Who’s running the operations? Get the picture? Not easy to know in advance but there it is. This is Retail Medicine and it’s significantly different from the mainstream.

Find someone who knows more than you: This is not a recommendation buy a medspa franchise or hire a spa consultant. The truth is; The only people I recommend that you really talk to are already running successful medical spas of the type you’d like to emulate. Salesmen, professional trainers and spa consultants are in the business of retailing their services to you. (Read: Inside a Sona medspa franchise series.)

You’re probably going to research training, seminars, and conventions on the net. You’ll find lots of people telling you that they know the secret. I once actually sat in a training session at the NY Medspa Expo with the title: Make $200,000 per treatment room. Right Now! The expert advice to turn each room into a gold mine? Never let a patient leave without rescheduling a future appointment and buying at least $100 in retail. Utter tripe and a good way to kill your own reputation. I could go on ad nauseam but you get the idea. Find someone who’s in the business of running medical spas. Not a doctor who already does Botox, they can’t teach you what you need to know.

OK, so that said, what does it take to start a medical spa? Well, here are a few principal ways I’ve seen physicians start cosmetic practices.

Start with a lot of money: Get $500,000, hire the best people you can find, and then count on not making much money for the first 6-12 months until you’re able to build a client base and some sort of reputation. Of course you might make any number of mistakes in hiring, advertising, or choosing the wrong technology.

Medical Spa as a sideline: Build your aesthetic practice alongside your existing one. This is probably the most common route. It seems the easiest and probably has the least risk. But it still has challenges. When you hire full time employees your burn rate can skyrocket quickly.

(There’s often the esthetician who has ‘hundreds of clients’ that they’re willing to bring in exchange for a regular paycheck. Sorry. Any aesthetician who has hundreds of clients is not looking for a job. I can’t tell you the number of time I’ve heard variations on the ‘the aesthetician was supposed to bring the clients in’ theme.)

The advice here would be to start slowly and learn fast. If you’re going it alone, spend as little as possible until you have to. Never buy redundant technologies. Get professional help from a reputable advertising agency with medial spa experience.

Get lucky: I know a few good luck stories when it comes to starting a medical spa but not many and It’s not the kind of odds you’d like to bet on.

Hope this helps.