November 2009

Lisa Kind - Editor

Esthetic Endeavors | by Judith Culp

 

Adding Technology to Your Clinic

For most of us adding technology to our facility relates directly to a class we have attended. For others, maybe it was from a colleague referral. The device offers fabulous results, the treatment is fun to do, and it’s exciting to see it done and feels good too. So we buy it.

Often we do no demographic study, analysis of cost to return on investment or desirability of the new service by clients. Unfortunately, this is not the best way to be successful at our businesses especially in economically depressed times.

Before we purchase it is important to match the technology to our client base, our clinic business philosophy and the demographics of our community.

Ask yourself, do we have enough clients whom we can sell this service to and who have the financial ability to purchase it, so that we can pay for the device and make a profit?

We need to evaluate what the local market would pay for this technology and then determine how many services it would take – including manpower costs and supplies – to break even or make a profit.

Let”s consider some examples.

It is not uncommon for a good quality microdermabrasion unit to run say $6000 for a crystal device. If you charge $90 per treatment, it will take 67 treatments to pay for the device. But crystal devices have replaceable components which include the crystals, filters, and tips. Cost per treatment varies from brand to brand so it would be important to find out for each unit considered what the replacement parts are going to cost per treatment.

The tips vary with device. They may be $6.00 for one that will last that client 5-6 treatments or they may be $15-$20 or even more depending on type, brand and the number of uses available from it. We don’t think about the filters, as those are an occasional thing. Many manufacturers recommend these and the tubes be replaced every 60 – 90 days. This would be before we could complete a series on any one client so we must factor these into the amount of money we are trying to recoup.

We would also need to factor in labor costs – are we working “free” while we repay this bill? Most estheticians do microdermabrasion as part of a facial treatment, so we would need to know the cost of the rest of the following products: cleanser, toner, mask, serums, SPF or anything else we might include. Realistically it may take us twice this many treatments before we have hit a solid break even point.

The more supplies and disposables involved with the item, the more expensive the service would have to be, or the more services would have to be done in order to break even.

The new Fraxel laser is a good example. To prevent client cross-contamination there are disposable heads available for the unit. They are about $500 each. This has to be built into the cost of the service or the business will have difficulty breaking even. This would equate to more expensive services than those with components that could be disinfected. We must ask ourselves – will our clients pay the price to have this increased safety?

We need to do equipment evaluation to determine the cost of the original equipment, cost of replacement components, cost of supplies per service and any other hidden cost like maintenance can be supported by our client base.

We also need to evaluate the company. How stable are they? I remember in the late 1980s purchasing computer video equipment to allow clients to try on different hair styles/colors etc. This was state-of-the-art high-tech stuff. The clients loved it and we increased the opportunity for technicians to better consult and care for their clients. However, the supplier quit updating the software and then went out of business. We were left with equipment on a lease and no support. It was nasty. These are the type of things we need to protect ourselves against regardless of the type of device.

The contract we are about to sign requires very careful analysis and evaluation. Always consider the “what if’s.” Whatever the company tells you or says they guarantee, get it in writing or it won’t stand up in a court of law. Purchase price, financed price, financing fees, support and update fees, update-ability, maintenance costs, all of these things must be considered. The ability to update or upgrade is important, as we don’t want to be left holding a very expensive dinosaur.

Sometimes when just getting started a technician can be better off going with a less expensive piece of equipment that they know will do the job, but may not last as long and more quickly be dated. But they can get themselves profitable more quickly. If doing this, avoid equipment that doesn’t perform the way it should. It won’t help a business grow if they purchase a microdermabrasion device that doesn’t meet client expectations for performance.

No matter how wonderful a technology or treatment may seem nationally, we need to make sure we have local support for it. I remember speaking to a dermatology office that was offering microdermabrasion…. For $45.00. They were trying to lead their local populous forward, but the locals had no clue as to the value of the treatment. There are many more stories like this out there. Fabulous businesses have closed because the local demographics were not closely evaluated. This can happen whether or not expensive technology was incorporated.

I’ve noticed recently many laser centers offering specials. They may be operating at a close to break-even margin just to keep the equipment busy and the payments made. Expensive equipment must be evaluated on a worst case scenario basis. When doing cost analysis be sure to evaluate at anticipated, better than anticipated and worst case scenario basis. Difficult economic conditions are generally not long term, but their effects may feel like it.

So if it has been determined that a new technology is important and viable for a business, then it must be evaluated as to what make, model and price-point of that specific equipment is suitable. Often there are several choices that any one clinic could employ.

LED lights are a good example of this. They come in both hand-held and panel varieties. The panel variety offers hands-free operation so the technician can actually be performing another service on the client while they are receiving their LED. The hand-held suppliers counter this with the ability of the hand held to be placed closer to the skin for better penetration.

The panels counter this with higher output. It’s a discussion that is ongoing. The biggest difference may be cost. One manufacturer who offers both has handheld units for $350.00 and panel units that are over $5000.00. To have all the different colors of course, the price will be more on both sides. If you don’t have the money to invest in a panel, you could opt to get started with the less powerful but still very useful hand held unit. To be time efficient and do both sides of the face at once it would be $700.00 but that will be much quicker to repay than the $5000.00. Once your clients value the treatment, then you could make the upgrade.

Equipment selection will depend on modalities included in that technology, support, upgradeability, training, etc. In order to do an effective equipment evaluation, consider using a form like the NCEA Equipment evaluation form. This can be found at www.ncea.tv/ns/standards.html. Use the Standards drop down tab and you can find the form that can be printed out. Items like company stability, compatibility with national electrical standards, cost, replacement components, training, etc. can be evaluated. It is a useful tool and free to use.

Judith Culp, a CIDESCO Diplomat has been in the esthetics industry since 1980. A CPCP permanent makeup technician for over 18 years she served a 4-year term as a Director for the Society of Permanent Cosmetic Professionals, two years as their president. She is president of Culp Enterprises Inc. and CEO of NW Institute of Esthetics. Judy Culp is available for consulting. For more information visit www.estheticsnw.com.