Have you assessed your business lately? If not, now is the time to do so! I am Dori Soukup, and in this Dori Talks, I will share with you 8 steps to simplify your business assessment process and gain clarity on how to fill the gaps and make necessary improvement to promote business growth for your medical spas.
Let’s start with why you must assess and analyze your medical spa business and its performance. A business assessment is essential for improvements and growth. Conducting a business assessment for your medical spa will provide you clarity on your business status. The assessment’s purpose is designed to indicate the as-is status and the improvements that are needed to elevate your success. If you don’t know where you stand now, you won’t be able to see where want to go.
Here are 8 Key Medspa business factors to assess.
1. Financial Health
Having a financially healthy medical spa has its rewards, but how do you know how healthy your business is? You’ll know by measuring your financial ratios.
Take your year-end Profit and Loss statement (P&L) and calculate the following Financial Ratios for each category:
- Compensation Rate
- Product Cost Rate
- Operating Expenses
- Profit Margin
To calculate each ratio, simply take the total of each category and divide it by the overall revenue. The percentage that you see will inform you of the ratio for that category. These ratios can vary from business to business, but you definitely want double digit profit margins. This will indicate that you have a healthy business.
- Another important financial number to measure is your Volume Per Guest – we call it VPG.
To calculate your VPG, take your overall service revenue and divide it by the number of clients you saw during the same period. Use the same formula to calculate your retail VPG.
- Look at how much you generated in a la carte sales versus recurring revenue from members.
- Lastly your growth rate – are you up, even, or down for the year over previous year? This is the very minimum but it a great start.
2. Your Positioning
Have you assessed your online and offline presence and positioning? Your online presence would be your website and social media platforms. What image does your facility portray? Are you positioned as the only choice for consumers? Try to give your positioning and image a facelift to attract the affluent consumers to your business.
See how you measure up against the competition by doing a competitive analysis.
3. Marketing Efforts
You may be spending thousands of dollars per month on marketing, but is it effective marketing?
It’s time to assess the following:
- Number of leads generated for the year
- Conversion rate from lead to client
- Cost per lead
- Number of new clients you gained
- Size of each transaction from new leads
- Client lifetime value and retention rate
-
Space Capacity Rate
(download the space capacity calculator
from InSPArationManagement.com)
Assess your marketing and make the necessary improvements to increase traffic and conversion rate.
4. Medical Aesthetics Sales Process
While speaking at the Global Aesthetics conference last month, I asked the attendees in my session, “Who feels they have a great sales process?” Out of 200 hundred attendees, maybe a handful raised their hands. So how do you generate revenue within your medical aesthetics business? We teach a sales process that helps medical spas generate multiple millions of dollars in sales each year. One of the biggest mistakes we see is the absence of a sales model.
Here are some medical spa sales process recommendations for revenue generating opportunities:
New clients sales process: Get to know your consultations – this process is lacking in most medical spas. Most do what I call an a la carte consultation instead of performing a full-blown consultation. You must provide a customized treatment program that leads to thousands of dollars instead of hundreds.
On average, how much are you currently generating from each consultation? Implement a great new client sales process and generate thousands from each consultation. Follow the S.A.C.R.E.D system, we teach on MedSpa Biz University, and you will reach a whole new level of success.
Sales process for enrolling members: some InSPAration Management members have 500 plus members generating six figures per month from a recurring revenue membership model. How many members do you have and how much do you generate per month from recurring revenue? Time to assess. Use the C.O.P.I.E. system, we teach to implement your member enrollment sales process and gain financial health and security.
Retail sales: Most don’t focus on retail sales. They may have a couple of shelves of products and that is it. Big missed opportunity. How much are you generating on average per client from retail sales? Does your team have targets they must reach? Teach them the P.R.I.D.E. system and watch your retail sales for your medical spa soar.
5. Operations Assessment for your MedSpa
To succeed, you must have clear, defined operational structure. Here are the important aspects to assess:
- Organizational structure: Position description and clarity on what each team member role is, their performance expectations, and measurements.
Operations consistency and protocols: Does the entire team know all their treatment protocols? Do you have medical spa training manuals to help them adhere to your standards and operating guidelines? This is a must. You can access medical spa manuals by department on Med Spa Biz University and set up your team for success!- Medical Spa Business Systems: Do you have business systems in place? Assess your current systems and check out all the systems we offer within the business model we teach. Systems provide consistency, accuracy, and growth. They are a must if your goal is to grow your medical spa business and scale.
6. Med Spa Leadership, Management and Team Training
When assessing your leadership, management style, and skills, it’s important to do a S.W.O.T. analysis on everyone.
In each team member, the S.W.O.T. analysis can help you discover the following:
- Strengths
- Weekness
- Opportunities
- Threats
Performing a S.W.O.T. analysis is a great process to identify strengths and discover what needs to improve and put those plans into action.
7. Business Training Programs for Medical Spa Leaders and Teams
Assess your training efforts. Do you have a training curriculum for clinical knowledge and business? Training is one of the most important business functions to ensure success. Your training efforts are a direct reflection on your retention rate and your success. Make training a habit within your MedSpa and you will see your performance soar.
8. The Medical Spa Guest Experience
Last, but not least, assess your guest experience. From the phone call, appointment confirmation, to the check-in, the refreshments, the touchpoints, the actual treatments, the results they achieve, the recommendations, and the check-out process, it must be all orchestrated with perfection and to exceed your clients’ expectations.
Host a team meeting and make enhancement to your guest experience and you will see major improvements and increased in positive reviews, which will lead to more clients.
Of course, there is always more to assess, but if you at least assess the following 8 business functions, you will be able to discover what is working and what is not working in your medical spa. Then you can make the necessary adjustments to have a super, successful 2023 and beyond!
Call us and discover MedSpa Biz University.
