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3 Reasons Med Spa Industry Growth is Only Just Beginning

Posted By Administration, Friday, August 3, 2018

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

The med spa industry is booming, but is this growth a fad or does it represent a long-term business opportunity?

There are few industries with as much potential as the med spa industry. When you look at the age demographics in relation to the advancements in technology being used in the medical spa industry, it is easy to see why. AmSpa’s 2017 Medical Spa State of the Industry Report takes a deep dive into industry trends, but here we examine three factors behind the industry’s explosive growth: technology, social media, and population trends.

Technology

Technology is key to current med spa growth because in the past 15 years, advancements in non-surgical (i.e. non-invasive) treatments that make people look and feel better about themselves made these treatments widely available and affordable. Botox injections, laser resurfacing, and body contouring have allowed people to keep their youth without going to the gym or undergoing expensive surgery with substantial downtime. As long as technology allows people to turn back the hands of time in an easy and (relatively) pain free manner, there will be a market.

Social Media

Because social media has become so pervasive, many people are more comfortable with the idea of receiving a cosmetic treatment. Seeing videos of procedures, oftentimes live with their favorite social media personality, lessens the stigma and uneasiness associated with receiving a med spa treatment. People often show up for treatments without any questions or reservations because they’ve experienced the procedure already through social media.

AmSpa members should check their state’s medical aesthetic legal summary for more information on a med spa’s patient privacy responsibilities with regard to social media.

Millennials and Beyond

Finally, the rise of the millennial and post-millennial population, combined with aging Gen X’ers, has created a perfect storm for the med spa industry. While the majority of med spa clients are in their mid-thirties to forties, the millennial population has shown a willingness to spend money on themselves, their appearance, and experiences. Med spas are creating a perfect environment for this population by making their environments an exclusive “experience” that makes clients feel special. And given that Millennials are only just starting to purchase med spa treatments and are poised to take over as the largest percentage of the U.S. population, imagine what the med spa market will look like in, say, 10 years when Millennials are actually showing signs of aging? Right now, Millennials go to med spas for ‘preventative’ treatments, i.e. to stop the wrinkles from ever forming.

Moreover, the generation behind the Millennials (called “post-millennials” or “Gen Z”) is even bigger than the Millennial population. Accordingly, there is serious potential for the medical spa market to continue to grow for years to come.

Attend an AmSpa Medical Spa & Aesthetic Boot Camp to find out how to build your practice legally and set your business up for long term, sustainable success.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Med Spa Trends 

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Three Ways Med Spa Retail Sales Can Transform Your Practice

Posted By Administration, Thursday, August 2, 2018

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

Selling retail products like skin care or other items is often an afterthought in medical spa practices. While treatments and procedures will always be the bread and butter of your practice, retail product sales have a vital place in the overall success of your business.

Treatment Results

Stellar treatment results also increase the rates of customer retention, and offering skin care products that pair with your treatment menu can improve your patients’ procedure outcomes.

“Healthier skin responds better to treatment,” says Nealy Skeldon of Environ Skin Care. “The healthier the skin the better the result.”

Skeldon advises creating packages on your menu of treatments with skin care products bundled in to give your patients the best treatment results, and to increase their likelihood of returning.

Retention Rates

Client retention is hugely important for many reasons. For instance, it’s both easier and less costly to retain current customers than attract new ones. Additionally, repeat customers will spend from 20% to 60% more than new customers, and their spend per visit will increase the more they return as you continue to build trust.

There are many ways to increase retention in your medical spa but, according to Terri Wojak of True U, one of the easiest is through retail skin care sales. She noted that, on average, a client who does not purchase a product with their service returns only 10% of the time. Those who purchase one product return 30% of the time and the retention rate for clients who purchase two products can be as high as 60%.

Properly integrating a home-care plan with your patients can pay huge dividends as they continue to return to you.

Profit Margins

 As industry expert Bryan Durocher of Durocher Enterprises states, “So many people are in touch with top-line revenue and not their bottom-line profitability.”

After factoring in the cost of consumables, labor, electricity, and other details, the profit margin on many medical spa treatments can typically hover around 10%. Retail products, however, can yield a margin of up to 40%, according to Wojack.

For information on how to integrate retail skin care into your business attend an AmSpa Medical Spa & Aesthetic Boot Camp and be the next med spa success story.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Ownership 

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The Dangers of Med Spas Purchasing Overseas Botox

Posted By Administration, Tuesday, July 31, 2018

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

Med spas purchasing Botox or other drugs from legitimate overseas sources in order to save money open themselves to significant legal risks. For instance, in June 2018, Oregon-based physician Brenda Roberts had her medical license revoked for obtaining and using prescription medication from foreign countries. Roberts was a family practice doctor who began administering Botox treatments at her home on the side. She wasn’t necessarily doing anything improper in terms of patient care, and she was keeping appropriately detailed records on her patients, but after Allergan noticed that she was having Botox sent to her home and cut off her account, she began buying Botox from United Pharmacies, a “rogue pharmacy” that operates outside of U.S. Food and Drug Administration (FDA) governance. FDA agents went through her trash and found that she had used Botox that was intended for sale in Europe.

Parallel Importation

Roberts was participating in a practice called parallel importation. In countries such as the United Kingdom, Germany, France, Sweden, and Canada, government regulates the cost of pharmaceuticals. Broadly, these measures are designed to prevent drug manufacturers from charging too much for what those governments consider essential medicine, but they also apply to pharmaceuticals used for elective procedures such as those offered by medical spas, including Botox.

In the U.S., however, drug manufacturers essentially can charge whatever they feel the market will bear for their products, and that price is invariably much higher than what is charged in other countries. In response, licensed dealers in countries where cost controls are enforced sell their products to customers in the U.S. at prices that are up to 50% less than what the buyers would have to pay if they were purchasing the drugs directly from the manufacturer.

This transaction benefits both parties. The buyers get legitimate pharmaceuticals for much less than they would have to pay if they were buying directly from the manufacturers, and the dealers can make a decent profit simply by marking the product up slightly. These are not cheap, counterfeit pharmaceuticals like the ones that are typically manufactured in China that have flooded the medical aesthetics market in recent years; these are the same drugs that are approved by the FDA and sold in the U.S.

Legal Concerns

However, while parallel importation is broadly legal in the U.S.—the Supreme Court ruled that to be the case in a 2013 case involving textbooks—this case demonstrates that the distribution of drugs that are not explicitly intended for use in the U.S. is still absolutely illegal, and that the FDA and the U.S. Drug Enforcement Agency (which also participated in the investigation) are taking cases such as this one extremely seriously. There hasn’t been a great deal of enforcement yet, but this case demonstrates that the issue is absolutely on the agencies’ radars.

Despite the relatively minor risk of being caught, ByrdAdatto and AmSpa steadfastly believe that medical aesthetics practices should not participate in parallel importation. The potential consequences clearly outweigh the cost savings. If a practice’s profitability depends on getting 30% off Botox, it needs to re-evaluate the way it does business. Practices should remain compliant with the FDA and other regulatory agencies, regardless of whether a drug is overpriced. It is absolutely possible to run a medical spa practice that is both financially sound and compliant with all laws and regulations. Learn the keys to running a medical spa practice profitably and legally at an AmSpa Medical Spa & Aesthetic Boot Camp. Consult with your healthcare attorney if you need more information. AmSpa members can take advantage of their annual compliance consultation with the business, healthcare, and aesthetic law firm of ByrdAdatto.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law 

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Wow New Patients and Have Better Patient Retention in Your Med Spa by Selling an Experience

Posted By Administration, Thursday, July 26, 2018

By: Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

A med spa is a medical facility, but by presenting your med spa as a luxe experience, you can gain new patients and gain better retention on your existing clientele.

The non-invasive medical aesthetic procedures that make up the menu of services often require licensed medical professionals to perform them, and these facilities always require a doctor to be involved with the business. Additionally, because medical professionals are involved, and these treatments are often classified as the medical procedures, medical spas are regulated like medical practices. (AmSpa members: see the laws governing aesthetics in your state in your medical aesthetic legal summary.)

These facilities, however, are a far cry from doctor offices. They often resemble retail storefronts or day spas, and are subject to business realities like marketing, product sales, and especially customer service. Everything in a medical spa—from retail sales, to reviews, to patient retention, to the ability to bring in new business—improves if the spa goes out of its way to create a stellar patient experience. This doesn’t just mean performing excellent treatments, although that is part of it. It means creating a singular, spectacular client experience from website, to phone call, to every interaction after they step through your doors.

“Our entire purpose working in this industry is to ‘wow’ our clients,” says Dori Soukup, founder of InSPAration Management. She continues, “We’re not just a medical spa—we deliver experiences.”

Once a patient steps into your facility, your aesthetician can be one of the most solid touch points in creating that consistent experience, along with your front desk staff. Terri Wojak of True U Education outlines ways that aestheticians can offer complete “concierge services” to customers in a medical spa. These services include:

  • Prepping the skin prior to treatments;
  • Assisting medical professionals during procedures;
  • Review post-treatment care with patients; and
  • Performing follow-up calls.

Your patients’ experience isn’t just about the treatment they’re coming in for, or the products that they buy. As Bryan Durocher of Durocher Enterprises says, “People buy solutions to problems, and they buy feelings.”

Matt Taranto, owner of AesthetiCare and Mint Aesthetics in Leawood, KS, says that he doesn’t just want to be the person his clients come to for Botox or fillers. “I want to be your lifetime anti-aging consultant.”

Investing in providing your patients with a world-class experience can be transformative for your business. Not only can it increase your current patients’ average spend per visit, and increase your retention rates, but it can build your reputation as the go-to medical spa in your area, which will increase your ability to attract new clients.

For more information on medical spa legal best-practices attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law 

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Med Spa Business Planning: A Step-by-Step Guide

Posted By Administration, Wednesday, July 25, 2018
Updated: Wednesday, July 25, 2018

By: Bryan Durocher, Founder and President of Durocher Enterprises 

A detailed business plan is a must-have for a successful, profitable, and sustainable medical spa practice. “Business is a numbers game”. We have all heard that saying before and it is very true. Having a positive bottom line in this industry means really keeping an eye on operating expenses and understanding what the numbers mean and what to do to keep them in proper alignment.

Having a handle on your numbers means understanding what the overall financial picture needs to look like and breaking it down into manageable bite size action steps that need to happen every day. It starts with you and your vision and then educating your team members as to their role in the financial process.

Many med spas or cosmetic practices are not profitable. This is mainly due to the lack of understanding and education on the part of the ownership. With most payroll expenses take a significant amount of the gross service sales revenues. Our profit margins in this industry are very tight and there is little room for error. Keeping an eye on your numbers allows you control over knowing where you are, and planning for where you want to go. An owner who knows their numbers is not waiting for the financial advisor to tell them if they are successful or not. Keeping your finger on your business’ financial pulse allows you to dance, shift and change with your business’ needs quickly and intelligently.

For additional help building your medical spa business plan, see the Business Plan Template in the AmSpa store.

Financial Projections

Every business plan must include pro forma financial statements. These are financial statements that are used for you to predict the future profitability of your business. Your projections will be based on realistic research and reasonable assumptions, trying not to overstate your revenues or understate your expenses. If you are going to seek a lender or investor, they will use these financial statements to highly scrutinize your med spa. The bottom line, the lender or investor wants to know when and if your spa will be profitable.

The pro forma statements that are required are listed as follows:

  • Pro Forma Income Statement
  • Pro Forma Cash Flow Statement
  • Pro Forma Balance Sheet
  • Yearly Projections (Income Statement, Cash Flow Statement, & Balance Sheet)
Income Statements

These are a tool to review your gross sales vs. the expenses you incur while operating your business. The model we will use allows for totaling gross service and retail sales, then deducting the costs of doing business and allotting them to the appropriate categories to show our net profit before taxes. These statements should be done at the end of each month to identify what is working and where our opportunities for improvement are. The most important result is the timely completion of the statement. You need to understand the process and do not physically have to do it. If you are not a “numbers” person, a bookkeeper, accountant, and tools such as med spa/spa software, Quick-books® or you may use a computer spreadsheet program such as Excel® can support you in getting the job done.

Format and Sources of Information

Information for a three-year projection can be developed from your pro forma cash flow statement and your business and marketing analysis. You can also pull together a first year forecast by combining information on sales from business owners and trade associations. The first year’s figures can be transferred from the totals of income and expense items. The second and third year figures are derived by combining these totals with projected trends in the industry.

Cash Flow Statement

Definition and Use

The cash flow statement (or budget) projects what your business needs in terms of dollars for a specific period of time. A cash flow projection tells (1) whether or not you can pay bills, and (2) when you’ll need cash infusions to keep going. This statement deals only with actual cash transactions and not with depreciation or other non-cash expense items.

For information on financing options for your medical spa practice, listen to the Medical Spa Insider Podcast Episode 10 with Wells Fargo’s healthcare specialists.

Balance Sheet

Definition and Use

A balance sheet shows what items of value are held by the company (Assets), and what its debts are (Liabilities). Professional lenders look at your balance sheet to analyze the state of your finances at a given point in time. They are looking at things like liquidity (how easily your assets can be converted into cash) and capital structure (what sources of financing have been used, how much was borrowed, and so on). Professional lenders use such factors to evaluate your ability to manage your business.

The following is explanation and instructions of how the ‘Strategic Assumptions’ data will apply to a business plan.

Revenue Assumptions

  • # of treatment rooms
  • How many hours a day and days per week the med/spa will be open
  • Estimate of the price points for services offered
  • How long each of the spa services will take

The above assumptions will then be used to answer the following questions

  • Hours open per day divided by length of treatment = # of treatments per day per room
  • # of treatments per day multiplied by price of service = Revenue per room per day
  • Revenue per room per day multiplied by # of treatment rooms = Total Service Revenue per day
  • Total Service Revenue per day multiplied by days per month = Total Service Revenue per month
  • Total Service Revenue multiplied by retail percentage% = Approximation of Retail Sales
  • Retail Sales plus Total Service Revenue = Total Spa Revenue operating at 100% capacity
  • Total Spa Revenue operating at 100% capacity multiplied by % selected by identifying which of the below works for your model = the Actual Capacity Assumption.

Actual Capacity of your spa when it first opens will depend on many factors. For example, if you are an existing practice expanding into an ancillary spa, your Actual Capacity ratio would be higher than that of a spa being built with no existing clientele.

  • If you are building a spa with no existing medical practice attached to it, begin with an Assumed Actual Capacity Rate of 10% in the first month.
  • If you are expanding your medical practice to include a spa and you have an existing clientele base that will support, begin with an Assumed Actual Capacity Rate of 20-35%.
  • An average you could calculate is 4% growth per month
  • Goal to be met by the end of year one is 45% capacity
  • Ultimate goal will be to operate at 75% capacity

Keep careful notes on your research and assumptions, so you can explain them later if necessary, and also so you can go back to your sources when it’s time to revise your plan at some later date.

Service Expense Analysis

When it comes to your expenses shopping around will do you well. Remember it is not what you “make” it is what you “keep”. I have highlighted the major expenses that are usually out of line and cause a lack of profit.

Fixed vs. Variable Expenses

Fixed expenses are those costs that remain the same month in and month out. It is easy to incorporate them into your budget as you know the number you are dealing with already. Items such as lease payments, loan payments, accounting fees when on retainer, insurances, cleaning services, and depreciation can all be examples of fixed expenses.

Variable expenses change with volume of business your company does. Meaning the “more” or “less” business you do, these numbers can rise and fall exponentially. Example variable expenses include credit card fees, education & travel, repairs & maintenance, salaries & commissions, telephone, and utilities.

Expenses and Professional Services Used to Run Your Business
  • Get at least three references for each individual or company you are going to use in helping you operate and grow your business.
  • Look at your natural skill sets – Do you love doing the task? Can you pay someone else to do the task and make more money doing what you do best? Could you have more quality time and a better life by delegating out the task?

“I’d rather have 1% of a 100 people’s efforts than use a 100% of my own”. –John Paul Getty

Advertising & Promotion

This category covers all of the tools you use in marketing and promoting your business. It is a category you have to pay particular attention to as advertising costs can add up very quickly. Items covered under this expense include; magazine, social media, television, and radio advertising, marketing materials such as business cards, menus, brochures, and referral cards, all direct mail pieces, and client entertainment.

With any investment into advertising/marketing/promotion, think about tangible return. Can you track the return on investment? For example, are you advertising with a display ad in the yellow pages? If you are investing heavily in any particular area you must have a tracking system put into place to monitor results. Otherwise, how do you know if it is a wise investment? The strongest form of marketing is “word of mouth” and it can be the least expensive. A referral card program is the best way for techs to build a clientele and it is traceable. Special events are another strong revenue tactic.

When creating your advertising plan, also keep in mind the specific legal requirements that apply to medical practices.

Payroll Expenses

Your costs for salaries, commissions on technician’s revenues, EDD, FICA, and workman’s comp insurance are totaled and listed here.

Hands down this is one of the most challenging areas with your business and has to be monitored closely. If this area is out of alignment refer to the commission structure in for a plan that allows for profitability.

Supplies – Back Bar

This would consist of anything used to perform a service. Professional supplies need to be separated from retail products that are purchased for resale. Request that your distributors or vendors itemize them separately for you if possible.

This is another challenging area. These expenses if not checked can mount up very quickly. The three main culprits are; the actual cost of the product to perform the service is too high, product waste and inventory control.

Product Cost

When choosing professional products to perform service you have to compare the cost of the products needed to perform the service and how much you are charging for the service and does the product cost amount to no more than an average of 18% of the service price charged in a med spa. You may find some services are slightly higher and other come under the seven percent and in the end balance out. A business that too focused on injectables or fillers will run into to challenges with cost of goods. You want a balance of service revenue from machines as well.

Example:

Inappropriate Cost – European Facial $100.00

Cleanser/Toner/Mask/Moisturizer/Eye Cream/Cotton Pads $20.00

Product Cost $20.00 divided by $100.00 Service Cost = 20%

Waste

The second culprit is technicians using or wasting too much product. When staff is not paying for the product sometimes there is little care in how much they use or how much is rinsed down the drain. Coach your team in the appropriate amounts of product needed for their particular services offerings. Another option is to use products that are formatted for individual services so there cannot be waste.

Inventory Control

Create a monitoring system for back bar products where technicians have to turn in completed packaging before they can get new supplies. Appoint an individual to be responsible for inventory control and ordering. This person would do a physical count of inventory each week, note shrinkage (missing product) and create a master order form to track purchases. By all means do not let your sales reps decide what to order for you.

Retail Expense Analysis
Product Cost

This category covers the expenses of buying the products you retail in the med spa or spa. You are looking for the highest profit margin possible. Typically a branded line’s cost will range between 48%-56% of the retail price. Private label or specialty items can have a much lower product cost and higher profit margins that you set based upon market acceptance.

An inventory system is essential for keeping track of ordering. Most software systems allow for inventory control and adjustments. Having a point person handling this is important to monitor cost, orders, and shrinkage. It is easy to overspend in this category especially when there are sales and promotions constantly offered from your vendors.

For more information on systems and best-practices to build your medical spa profitably and legally, attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Bryan Durocher is the author of Wakeup Live the Life You Love in Beauty, and is the founder of Essentials Spa Consulting and Durocher Enterprises. Durocher was named one of the “Top 20 People to Know in the Beauty Industry” by Global Cosmetic Industrymagazine, and provides coaching, consulting, global industry trends, and marketing solutions for medical spa, spa and industry professionals internationally. He has published many articles and has provided business education internationally at a variety of national and international industry events including AmSpa’s Medical Spa & Aesthetic Boot Camps and The Medical Spa Show.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law 

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Fee-Splitting: Pitfalls of Med Spa Compensation

Posted By Administration, Tuesday, July 24, 2018

By: Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

One of the most common legal issues in medical spa practices involves “fee-splitting” and how that relates to med spa ownership and employee compensation. Despite a medical spa’s superficial resemblance to more traditional retail outlets, it has to play by a different set of rules and answer to a different set of authorities because it administers medical treatments. In most states, if a medical spa owner is paying employees commission, he or she is engaging in a practice known as fee-splitting, which is illegal. Therefore, it is important for medical spa owners and operators to understand this issue and its consequences in order to avoid running afoul of regulatory agencies.

Commission: A Common Mistake

In most states, a patient who receives a medical treatment—such as many of the services provided at medical spas—is required to provide full payment directly to a physician or a physician-owned corporation; this is in accordance with a doctrine known as the corporate practice of medicine. If these physicians or corporations give a percentage of that payment to a non-physician who was responsible for securing the patient’s business, for example, they have engaged in fee-splitting.

This practice is not uncommon at medical spas, and it typically doesn’t represent any sort of shady attempt to practice unlicensed medicine—the doctors who operate these establishments simply wish to reward employees who attract business to the practice. Regardless, in many states it is illegal to engage in this practice, and doing so places both parties to the transaction at risk.

The Consequences

If a physician is found to be engaging in fee-splitting in a state in which it is illegal, he or she could be subject to the suspension or revocation of his or her license, as well as a large fine. Additionally, the person or people who receive the commission payments also are subject to fines. Therefore, if you are an aesthetician, registered nurse, nurse practitioner, physician assistant, or laser technician who is being paid commission, mention it to your employer to make sure he or she knows about the problematic nature of this setup. If you are a physician who is giving commissions in a state in which fee-splitting is illegal, you should stop doing this immediately. Consult your local health care attorney or AmSpa to learn about the laws governing fee-splitting in the state where your practice is based.

This does not mean that medical spa employees cannot be awarded extra compensation, however—medical spa owners can establish bonus plans, pay-per-service systems, and perhaps even profit-sharing programs that are perfectly legal in the eyes of regulatory agencies. These types of programs – like the compensation plan available in the AmSpa Store – can be very lucrative for employees, and they will prevent all involved from incurring penalties that can alter lives and end careers.

AmSpa members can check their medical aesthetic legal summary, or utilize their annual complimentary compliance consultation with the business, healthcare, and aesthetic law firm of ByrdAdatto to ensure their compensation plan meets all regulatory requirements.

A (Possible) Exception

Viewed through an impartial lens, it would seem that using a deal site such as Groupon to drum up business would represent a form of fee-splitting, as medical spa vouchers sold through these services—from which the service receives a percentage of the sale—can be used by customers to purchase medical treatments. Check with your local healthcare attorney to learn about the specifics of the regulations regarding deal sites in your state, but for this reason and others outlined in our previous blog, we don’t recommend partnering with Groupon or a similar site.

For more information on how to run your medical spa practice legally and profitably, attend an AmSpa Medical Spa & Aesthetic Boot Camp, and be the next med spa success story.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law  Med Spa Ownership 

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How Aesthetician Services Can Benefit Your Medical Spa

Posted By Administration, Thursday, July 19, 2018

By: Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

While medical spa services command higher prices than traditional spa treatments, medical spa owners and operators shouldn’t overlook aesthetician services. These can be lucrative opportunities for added services for your patients, increasing both retention and profitability of your med spa practice.

What Can Aestheticians Do For You?

According to the American Med Spa Association’s 2017 Medical Spa State of the Industry Report, aesthetician services were one of the leading revenue-generators in medical spas. These treatments can include facials, aesthetician-grade chemical peels, and waxing, to name a few. This category also includes Hydrafacials, which is one of the fastest-growing treatments in medical spas regardless of practitioner type.

Some Caveats

In many states, treatments such as microneedling and dermaplaning are considered to be the practice of medicine. Because of this, they should only be done by a licensed medical professional. However, there are some situations in which a person holding an aesthetician license may perform these procedures.


Microblading is also a treatment that individuals holding aesthetician licenses perform in many states. State laws can vary regarding this procedure, but it is often categorized as permanent makeup and, with some additional training, these practitioners can often offer this service in medical spas.

Contact an attorney familiar with medical aesthetic laws in your state for more information on microneedling, dermaplaning, or microblading. (AmSpa members can take advantage of their annual complimentary compliance consult with the law firm of ByrdAdatto, or check their medical aesthetic state legal summary.)

Legal Requirements
To add these aesthetician services to your medical spa, first be sure that the practitioners you hire are properly licensed to perform these treatments. This should be of paramount importance for all of your service providers, whether offering beauty services or medical treatments. In-depth training and proper licensure ensures that your patients are getting the best possible services and results, and also protects your staff and business against fines and other punishments from regulatory agencies.Your business will also need to obtain an establishment license for these procedures, and that license must be displayed in your facility during business hours. Additionally, be sure to double check with your insurance-provider to make sure you are covered to offer these additional treatments. Assuming that your other business housekeeping is in order (LLC, tax ID, etc.), you should now be set to offer another tier of services to your clients.

For more information on medical spa legal best-practices attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Trends 

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The Top 5 Med Spa Law Tips to Know Before You Open

Posted By Administration, Tuesday, July 10, 2018
Updated: Monday, July 9, 2018

By: Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

Med spa law can often be a maze of state and federal regulations, crossed with a litany of regulatory board opinions and years of case law that can differ widely from state to state. However, although the business is complicated, understanding the following five pieces of advice can help you tremendously.

Medical spas are medical facilities.

You may be forgiven for thinking that medical aesthetic facilities operate under the same set of regulations that govern the non-medical facilities with which they are often associated like day spas and retail centers. However, medical spas are medical facilities and must be operated as such. This is the most important piece of advice a health care attorney can give medical spa professionals who are operating medical spas.

Understand your corporate structure.

Because medical spas are medical facilities, their corporate structures are more important than you might think. The regulations governing medical practices in most states recognize the “corporate practice of medicine,” which states that medical practices must be owned by physicians or physician-owned corporations. This can impact several aspects of medical spa ownership, including the next piece of advice.

See AmSpa’s webinar on the MSO structure for information on owning a med spa if you are not a doctor, and if you live in a state that recognizes the corporate practice of medicine.

Do not reward employees with commissions.

In states that observe the corporate practice of medicine, payment for medical services must be made in full to the owner of the practice—a physician or physician-owned corporation. If a practice rewards employees for bringing in clients with a percentage of their payments, it would constitute fee-splitting, which is often illegal in these states. You can, however, reward employees with a structured bonus system, such as the compensation plan available in the AmSpa store.

A medical professional should always be onsite.

It’s fairly uncommon that the physician who owns or operates a medical spa is actually in the building. However, proper delegation and supervision must be practiced at all times. A physician is typically allowed to delegate day-to-day activities to other medical professionals, and having a mid-level practitioner—a nurse practitioner or physician assistant—onsite to supervise the non-licensed employees who typically administer treatments helps to keep the practice safe from lawsuits that may arise from accusations of improper care.

For more information on medical malpractice lawsuits, listen to Medical Spa Insider Episode 3, in which AmSpa Founder/Director Alex Thiersch interviews patient advocate law firm Sukhman|Yagoda on tips to avoid being sued by patients.

Consult a health care attorney as soon as possible.

Even though it might seem cost-prohibitive when you’re opening a medical spa, it is in your best interest to engage a health care attorney as soon as possible. An experienced lawyer can advise you about the numerous issues that can hamstring an aesthetics practice, including helping you create contracts that conform to your state’s laws. For example, if you want to craft an enforceable non-solicitation clause for an employee contract, a health care lawyer can help you with that. An attorney can also help you understand how best to utilize marketing tools, such as social media and how to make sure that you respect patient privacy at all times. It’s often said that it costs twice as much for an attorney to fix a problem than it would to prevent that problem from occurring in the first place, so make sure to consult a health care lawyer as soon as you get a chance, if you haven’t already.

(AmSpa members: Be sure to take advantage of your complimentary annual compliance consultation with the business, aesthetic, and healthcare law firm of ByrdAdatto. Additionally, AmSpa members should be sure to access their medical aesthetic state legal summary to find answers to their med spa legal questions.)

If you run a medical spa practice, there’s a high probability that you’re going to get sued—there’s really no way around it. However, if you heed the advice presented here, you will help to protect yourself from potentially disastrous consequences.

For more information on medical spa legal necessities, and to gain the tools to run your practice efficiently and profitably, attend an AmSpa Medical Spa & Aesthetic Boot Camp, and be the next med spa success story.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law  Med Spa Ownership 

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Medical Spa Business Advice: Make Fair Deals

Posted By Administration, Thursday, June 21, 2018

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

In his 2013 letter to Berkshire Hathaway shareholders, company chairman and CEO, Warren Buffett, said, “More than 50 years ago, Charlie [Munger, Berkshire Hathaway vice chairman] told me that it was far better to buy a wonderful business at a fair price than to buy a fair business at a wonderful price.” This might seem counterintuitive to the shark-like practices that are celebrated in certain sectors of the modern business world today, but I believe that if you conduct all your dealings fairly and ethically, you will give yourself a good chance for success.

When you go into business and begin forming partnerships, agreeing to contracts, and making deals with others—whether they are employees or external businesses—you should always strive to make fair deals. In other words, don’t scramble after every last dollar and screw people over just so that you can feel like you’ve “won” something. Some businesspeople will do anything to achieve this feeling, but deals don’t have to have winners or losers—a fair deal allows everyone to get what they want.

For example, if you’re negotiating with someone who you know is undervaluing his or her position, don’t try to take advantage of it just to save a few bucks. You should respect the other party, no matter what. You might even end up paying a bit more than you think you should be paying, but as long as you’re conducting business ethically, you’re likely to build a positive reputation among your peers, which should lead to future opportunities.

I believe in something I call “corporate karma,” which dictates that if you conduct your business fairly, you’ll end up attracting people—employees, business partners, etc.—who are good for your business. In regard to the previous example, if, instead of making a fair deal with the person who is undervaluing his or her asset, you decide to take advantage of his or her inexperience, that person will almost certainly find out what you’ve done and will likely be extremely hesitant to do business with you again. What’s more, he or she is likely to spread word of your shady practices, and you might find yourself frozen out of certain circles because you needed to feel like you “won” the original deal.

There are lots of things in the world of business and finance that you can’t control, but your conduct isn’t one of them. If you approach your dealings ethically and fairly, you’ll improve your chances of success. After all, the best kinds of deals are the ones in which both sides feel as though they’ve won.

For more medical spa business and legal best-practices, and to learn how to build and run your med spa right, attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps 

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Coming to Terms with Sales in Med Spas

Posted By Administration, Wednesday, May 2, 2018

If you were to create a Venn diagram displaying the relationship between retail sales and medicine, the overlap would represent the medical aesthetic industry. It’s a unique business model that requires the combined efforts of physicians who are experts at treating people and salespeople who excel at getting people in the door.

However, many physicians find the sales side of the equation difficult to engage with. Typically, doctors are taught that medical treatment is not a commodity to be sold—it’s something that is provided when needed. Therefore, when sales enters the equation, as it must in the medical aesthetic business, physicians tend to feel a bit skittish about it.

But sales, at its core, is about building trust and providing education, which in and of itself is not as pernicious as many medical professionals perceive. These people should not be afraid of selling, because all they’re really doing is providing information and building trust so that a patient can make his or her own decision regarding their care. They don’t have to engage in the sort of oily salesmanship they fear if they don’t want to.

For the purposes of medical aesthetic practices, sales are vital. Successful medical spas have established ways to attract and retain patients, and they involve everyone in the practice, from the physician to the receptionist. That requires sales, and it needs processes to work as efficiently as possible.

However, doctors and nurses may be hesitant to engage in sales, because they feel that by doing so, they are in essence forcing treatments upon patients. I’ve heard physicians say that they never sell to anybody, because they don’t believe selling medical treatments is appropriate and never want to feel as though they are using their expertise to profit from a patient who doesn’t know any better.

I can see why they would feel this way, but if properly practiced, selling is not exploitation. Effective sales and marketing is not about forcing anything on anybody. In fact, it’s the opposite—it’s building trust between the provider and the patient, and providing the patient with information so that the patient can make his or her own decision. When doctors are selling most effectively, they are giving their opinions and developing trusting relationships with their patients.

The most effective sales tool at medical spas is a very sincere belief in the services being provided, and that belief must also be shared by everyone working there. Everyone must provide all the information that patients need, so that the patients develop trust and feel comfortable. In time, they’ll make the decisions that are best for them. There’s nothing underhanded about this. Sales equals trust plus education.

Physicians who are skittish about sales should consider that if you’re doing it right, you’re not really “selling” anything—you’re simply giving the clients the tools to make their own choices. It’s absolutely vital that aesthetics practices have this in their toolbox and have a structure for it, because if they don’t, another medical spa absolutely will. Successful practices understand that sales in this space is about education, and they have ways to track what is resonating with clientele and what is not.

Doctors and nurses need to get over their fear of sales by recalibrating their perception of what it means to sell. Simply suggesting a course of treatment and providing supporting information is not nefarious if the doctor doing this genuinely believes in what he or she is saying. You don’t need to get down in the muck if you don’t want to. A physician who shoots straight and tells the truth is likely going to find more success than one who always says what the patient wants to hear in order to make a buck.

AmSpa’s Medical Spa & Aesthetic Boot Camps can teach you how you and your staff can look at your services differently, and can use sales techniques to ensure your patients achieve the best possible treatment results. AmSpa’s next Boot Camp is in Denver on May 19–20.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps 

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