Skin Care News

Spa Management in 2010

Posted on January 20, 2010 with 1 Comment

For many of us 2010 is and was a welcome challenge compared to 2010.  Many firms for which we consult or advise had a very difficult go in 2009 as they saw traffic, revenue and services contract.

While there have been many who have seen a rise in profits and volume, many have seen eroding sales, margin and flow since the end of 2007.  In business terms this is a long-time.

I won’t digress into my personal observations of recessions, the recession in 89-91 was for a short time equally severe as what we are experiencing today.  The big difference being how long the economy was contracted.

In the recession in 89-91 we were basically in bad sorts for about 18 months.  Even smaller, less capitalized firms were able to sustain themselves - especially with a quick and measurable recovery that was experienced in 92-93.

Many I have spoken to want to include the recession of 2000-2001.  Yes, our economy slowed substantially, that contraction was as much about technology and the infamous “internet bubble” as much as anything else.  This coupled with the tragedy of 9/11 put the brakes on the economy and slowed us measurably…but not like this.

Many economists - myself included - believe our “recession” began at the end of 2007.  I agree.  The holiday traffic, sales, and good mood of the nation just seemed a bit different…something was not quite right.  The same feeling I got at the end of 89.

With that said, where does that put us related to the spa industry? 

Well for one, sustainability seems to be a watch word for many.  If you have had the capital, resources and business model to get you this far, the focus should be maintaining for an extended period of time - probably up to a year or more.

There are plenty of excellent operators out there who also at the right place at the right time with the right staff; but on the whole many firms - firms that have been extremely successful in the past - are having a tough time.

Throughout this blog I have written about ideas you can or should consider to either increase revenue, increase margin, decrease expenses or help retain clients and staff.  Some ideas are as simple as effective follow-up following treatments and as complex as introducing medspa treatments requiring significant capital expenditures and hiring or training of certified staff.

All of these ideas can be helpful to almost any size firm…and many of these ideas are those that we hear about, either through communications or hands-on observation.

If you have ideas that you think will help others in the industry, please let us know and good luck in 2010!

Dubai Anti-Aging Conference - November 8-9, 2009

Posted on October 14, 2009 with No Comments

If you happen to be a company or practitioner in the world of Anti-Aging Medicine AND happen to be in Dubai in Novemebr, you need to get this conference on your calendar!

Major anti-aging manufacturers, educators, and industry leaders will be there and as you can imagine it plans to be one of the biggest events of the year. The major players will be there and is being hosted jointly by the World Academy of Anti-Aging Medicine (WAAM), American Academy of Anti-Aging Medicine (A4M), and the European Society of Preventive, Regenerative, and Anti-Aging Medicine.

With the economy tightening and consumer confidence and spending at historical lows, the obvious question might be why spend the money or the time?? Well, the industry is growing about 9% annually and is expected to top $72 billion in 2009, plus recent news reports have indicated that babies born “today” can be the first generation to expect to live into their 100’s. So, if you’re a long term thinker have have financial staying power to suffer from a poor economy, then this certtainly looks like a growth industry for the next century.

What can you expect?

Outside the normal networking, education, workshops, et al the proramm promises to offer…

Science based presentations and practical workshops will provide physicians with the necessary tools and knowledge to carry out aesthetic and cosmetic procedures, hormone replacement therapies, and genetic and diagnostic testing.

Aesthetic Medicine, Nutrition, Sports Medicine, Hormone Optimization and Genetics, which together comprise the five pillars of Anti-Aging medicine, are fully represented during the conference.

You can get more information by emailing info@anti-agingevents.com, or by visiting this link - Dubai Anti-Aging Conference.

Adding Services for Increased Spa Traffic

Posted on August 5, 2009 with No Comments

Increasing revenue and traffic for spas and MedSpas can be done several ways.  One, open new locations, increase marketing efforts, or adding new services or products.

For many spas, opening new stores or locations may be part of a long-range growth plan, yet may not be suitable while operating in a down economy when spa treatments are viewed as either a luxury or discretionary.

Marketing efforts can be categorized as advertising or direct sales.  Advertising can come in many forms.  Direct mail, email campaigns, joint marketin efforts with related products or services, TV or radio.  Many spas I have seen are flying banners outside their locations (local laws permitting), putting up billboards, and putting advertisements or discount inserts in papers, local news, press releases, or handing out discount or “specials” to customers and guests coming through the spa.

Increasing marketing efforts or expanding services is your best ROI when the economy has slowed.  Massage Therapy, Botox or anti-wrinkle procedures, facials, and vein therapy can be supplemented with several ideas.

Another opportunity is making available additional services or products inside the store. 

Selling in-expensive consumable products can help boost sales, improve traffic, and get consumers coming back.  Spider vein creams can be excellent ancillary products following sclerotherapy or laser therapy.  For pregnant women or those who have had children, a preventive or repairing stretch mark cream can help aid recovery and prevent scarring.  And while injections can help smooth wrinkles and puff lips, anti wrinkle creams and serums help neck wrinkles, crow’s feet, and puffiness or dark circles under the eyes.

These products are designed to supplement and enhance procedures and improve weekly or monthly revenue.  Choosing products that are expensive with luxurious packaging and “rock star” name brands may work against you.  While they may certainly enhance the image of your spa (and to many that is important), high-priced skin care products have been shown to be great initial purchases, but lack the consumable “punch” needed for return purchases.

Anti Aging Conference: 9-12 September 2009 - San Jose, CA

Posted on July 6, 2009 with 3 Comments

The American Academy of Anti-Aging Medicine has announced its fall Congress and Exposition in San Jose, CA on September 9-12, 2009. 

It is a 4 day event and they have over 75 speakers slated for presentations together with workshops on In-Office procedures.  Several focus areas include hormone replacement therapy, aesthetic venous treatments (spider vein treatments), detox and weight management, stem cell research updates, as well as fundamental and advanced topics on managing your “Anti-Aging” practice - medical, spa or medspa - a critical topic in today’s challenging economic environment.

They are currently accepting enrollment into the conference (http://www.worldhealth.net/) and it is not too late for reserving the best spots as exhibitors.  If you are a manufacturer of anti-aging skin care products, equipment, cosmetic or plastic surgery aids, advertising, or other anti-aging systems, you want to make sure you are in attendance.  Spa and  med spa owners and managers as well as  clinicians will be on-hand.

Here are some very interesting facts to know if you are in the industry or considering it:

Fast Facts on The Anti-Aging Marketplace

• The consumer public has voted with their wallets overwhelmingly in favor of the anti-aging healthcare model. The anti-aging marketplace is one that is demographics-driven: people around the world are getting older. As a result the anti-aging marketplace is projected to reach $41.94 billion by 2006, expanding at an average annual rate (AAGR) of 8% [Business Communications Company, 2002].

• The anti-aging market is expected to grow to $41.94 billion in 2006, reflecting an average annual rate (AAGR) of 9% [“Drugs and Cosmetics for Aging Boomers,” Business Communications Company, Inc., 2002]

• The market with the highest projected AAGR is hormone replacement therapy, at 16.5% [“Drugs and Cosmetics for Aging Boomers,” Business Communications Company, Inc., 2002]

• Global nutraceuticals market grew from $38.2 billion in 1999, to reach $46.7 billion in 2002; by 2007, global nutraceutical sales are projected to reach $74.7 billion [reported by NutraIngredients.com, “Nutraceuticals sales to hit $75 billion”] In he nutraceuticals market stands at $17.1 billion [“NBJ Releases New Report on Maturing US Supplement Industry,” Nutrition Business Journal, September 2002.]

• Sixty percent (60%) of Americans age 65+ are pursuing anti-aging interventions — including hormone replacement therapies and dietary supplementation [MSNBC Jan. 28, 2002.]

• Dietary supplement sales in 2000 were $17 billion. [Nutrition Business Journal, Nov. 2001.]

• Thirty-three percent (33%) of adults take supplements on the specific advice of their doctor. [Harris Interactive survey, 2001.]

Anti-Aging Conference

Improving Spa Profits - Part 2 - Managing Expenses

Posted on May 1, 2009 with No Comments

In the first part of this series on increasing spa profit, we talked about the three components of finance that are under our direct control - revenue, gross margin and expenses.

In the game of business, these are the three variables we can generally manipulate easily.  External factors, weather, competition, new product introductions and regulatory issues have to be dealt with as they come.  The big three (sales, costs, and profit margin) are generally under our control.  Making each move in the right direction is our goal.  Let’s take a look at expenses.

In 1991, my wife and I were 3 years into our first company.  We had 7 offices spread across the southeast.  The older offices were very profitable, the newer one, not so much.  But, we were payingthe bills and makingthe mortgage - ~$5 million of revenue and 32 employees.  While we weren’t getting rich, we were comfortable - until SadamHussein invaded Kuwait.  That sparked (or aggravated) an 18 month recession where we came close to losing the business.

Our response was professional (at least it felt that way).  Having spent 5 years at IBM and coming out of b-school, we quickly put in place a “Cost Containment Plan”.  While the title was a bit grander than the size of the company, I believe we did do a very good job identifying how to save money, reduce unwanted expenses, and discontinue costs.  We employed ideas from staff, bankers, suppliers and the University of South Carolina’s Business School.  Here’s what we did - hopefully a few ideas you might find useful.

1. Have a meeting- As goofy as this may seem on the surface, getting everyone together to announce what the purpose is is critical.  I have found when everyone has a clear understanding of the landscape of where we want to go or what we want to do, you get much better input.  We had series of meetings.  The first was to get as many cost savings ideas on the board as we could.  I am a BIG fan of the giant-sized Post-It notes - you can write on them, them stick them on the wall - literally wallpaperingthe conference room.  These keep everyone focused and helps stay on task.  In any initial meeting my rules have always been to get ideas on the board - no need to prioritize or critique - just keep the ideas flowing.  It helps if you facilitate and “grease the tracks” to keep folks from snipe-ingeach others ideas.  Just keep it moving!
2. Lists, lists, lists - Again, a bit goofy, but taking all those ideas, prioritizing and categorizing allows you to now distribute, review and consider your options.  We would provide a meeting summary and ask everyone to review - while scheduling a follow-up meeting.  We would ask everyone to give careful thought to any and all ideas with the PRIORITY being “What Ideas Can We Put In Place NOW ” that will save us money.
3. Follow-up - Lists are good, but very similar to plans.  Without someone to guard against their demise, lists can often find themselves stuck in a drawer or in a folder on a computer.  I have felt someone needs to be the “list manager”…meaning they had responsibility to make sure everyone did what they were supposed to and followed-up with enough lead time to keep folks from coming to meetings empty-handed or headed!  The biggest component to Follow-Up is having the “After Party”, or the meeting after someone has consolidated the ideas.  Here’s where you can:
   1. Prioritize
   2. Assign responsibility
   3. Allocate resources
   4. Determine and notify of monitoring
   5. ID follow-up
4. Implemention - While all this sounds and looks good, without implementation you won’t get results.  Therein lies the benefit of the lists.  Lists should be posted and each individual should have their own.  Again, this all looks good and for those who don’t see the value, will think it’s “over-thinking” the issue.  Well, I can tell you after seeingnumerous companies - very small and very big - this works…may be a pain for those “shoot first” folks, but nevertheless, its the best process for getting the most done.

Alright, all this sounds good, but how do I cut costs and expenses??  I didn’t mean to ramble on about process, but the process will reveal ideas you would not have considered…therefore, it’s worth it.  But, ideas…that’s right, ideas.

Ideas for Cost Savings

There will be a sub-part to this post where I am listing all the ideas from some of our cost-savings plans, but here are a few to get you started.  Remember, expenses are just one of three things you should bee looking at.

1. Staff expenses - In the 91-92′ recession, my wife and I cut our salary 4 times, then discontinued bonuses for managers, then cut managers salaries 15%.  BTW - we asked the managers if they would rather take an across the board cut or lose a person on there staff…all voted for salary reduction.  We discontinued temporary workers (completely), implemented a hiring freeze (no duh?), and banned OT for anyone who was hourly.
2. Health - When our health program came up for renewal, we lowered the plan.  I had always believed n the “Platinum” plan with all the bells and whistles - no more.  Cut deductibles, copays, whatever you need.  We also went from 100% employer paid premium to 90%.
3. Telephone, office supplies, office cleaning, subscriptions, associations, et al. - anything and everything that showed-up on the income statement as an expense was exposed to scrutiny, change and evaluation.  We cut-out LOTs of small miscellaneous costs.  Again, making someone responsible for IDing these expenses, providing alternatives, and implementing change is critical.
4. Advertising- Most advertising does not work.  Yep, I’ll say it again….it doesn’t.  I want to flush out some ideas that do in a latter post, but youshould critically scrutinize ALL advertising.
5. Travel, conferences, etc - For us (at that time) we spent a fair amount for a company our size travelling and periodically were attending shows, conferences, etc.  We stopped all conferences and spent a lot of time driving rather than flying.  Being a pilot I know there is great rationale for flying, but we just decided to drive…spending a lot of time on the phone in between cities.

I’ll list a few more ideas next time, but I have found that companies - even small ones - benefit greatly by sitting down and having a “jam session” to come up with creative ideas to cut costs.  If you follow-up and make sure ideas are implemented, you can  move the cost-containment program off your plate pretty quick.  Though all of this sounds like a lot of work, 4-5 days of planning and discussing followed by a week of implementation will knock-ou 80% of the projects.  So, it’s worth a couple of weeks of time to decrease expenses by 15-30%?  Yep, I think so!