The Med Spa and Skin Therapy Money Trap

Today’s topic? The med spa and skin therapy money trap you’re probably falling into… and how A) efficiently dig yourself out, or B) swerve it in the first place!

This conversation is geared towards med spas and skin therapy businesses that are already experiencing success but want to earn more without adding more time, energy, or money to their already stacked plates. After all, what I frequently see during my coaching sessions is entrepreneurial med spa owners and skin therapy leaders jumping headfirst into what they assume is the plan that is going to overhaul their biz for the better (not knowing that it’s actually the money trap they’ve been warned about all along!)

As such, this blog is for you if:

• Your books are full
• Your team is at its limits
• Your waitlist is brimming with eager clients
• Your retail items, during the busy seasons, are flying off the shelves

Does this sound like your spa business? If so, let’s jump in:

Why Are Med Spas And Skin Therapy Businesses More Prone to Money Traps?

Out of all the niches in the spa industry, skin therapy is by far one of the most lucrative due to the higher price points of advanced skin treatments and the niche’s ability to vastly leverage sales via retailing skin care at home.

The COVID-19 pandemic also saw a spike of interest in, on the client side, at-home skin care, and, on the spa business side, estheticians and skin care professionals wanting to dig even deeper into science-backed key ingredients & the formulation aspects of personalized treatments that clients can enjoy either in-spa or at home. While these interests have been steadily growing over the past five years, 2020 had triggered pivots such as:

• Spas, by and by large, positioning services like waxing and massage as “support” services rather than their main draws
• Solo spa owners investing in science-backed training & tech
• Spas turning to medical director-led treatments and skin care services

Meaning? That, with all this innovation, med spa owners and skin therapy leaders suddenly found their hands more full than ever before in 2021.

With this newfound busyness came with it an incredible increase in earning potential. With my own skin therapy and med spa coaching clients, their retail sales are often at least 50% of their service sales.

(To put this into perspective, the average spa is at 15%... with their goal being 30%!)

So What’s the Money Trap?

“Kirsten,” you may be thinking, “all that sounds amazing! What’s the catch?”

Well, when med spas and skin therapy businesses have plenty of bookings, are selling what they perceive to be lots of retail, and are booked for weeks (or even months) in advance, this can make spa owners and leaders feel that the money flowing in is consistent. 

While it may be true that the bills are covered during this time, having this loosey-goosey approach means that you don’t know where the money magic is happening: and by the time you realize there’s a proverbial leak, it’s slowed you down too much to effectively scale your sales!

Med spas and skin therapy businesses are prone to money traps because they:

• Have high overhead costs
• Have high labour costs
• Have spa owners, on average, that are not completely confident in dealing with the numbers side of the business, which makes it all too easy for them to miss opportunities that build sales momentum

That’s why, although skin therapy businesses and med spas are some of the most lucrative in the spa industry, owners of these businesses need to stay eagle-eyed in order to keep scaling exponentially, and keep themselves protected from potential weaknesses.

The med spa and skin therapy businesses' money trap is when your business appears to be doing well, but you don’t know your exact numbers or monthly sales patterns it experiences throughout the year. This common money trap is all about how your cash flow assumptions that aren’t backed up with data are leaving money on the table.

Fixing the Med Spa and Skin Therapy Money Trap

There are two data trackers I would recommend implementing before the end of the year so that you can both set and meet your 2022 goals:

• #1: The Spa Scorecard: A favourite of mine to track monthly metrics, a Spa Scorecard is an spreadsheet that tracks the following metrics month after month and year after year in order to accurately measure which are going up, which are going down, and which are staying the same:
• Service sales
• Retail sales
• Staff productivity 
• Pre-bookings
• Average ticket price
• Client retention
  
  
• #2: The Cost-Per-Treatment Spreadsheet: The spreadsheet for those who hate spreadsheets, this super simple spreadsheet can be as basic as one column. Use it to compare how profitable each service is (yes, including labour and general overhead!) and determine which are worth keeping or need price increases, and which you can scale back on in order to maximize profitability within your niche

With my coaching clients, we tackle these data trackers ASAP: first to determine where each Key Performance Indicator is at, and then to see how we can use these numbers to formulate a strategy to systematize where the money magic is happening… and, of course, fix where your biz is leaking money!

I realize that most spa owners don’t think they’re “numbers people”, but I assure you that, if you’ve got a skin therapy or med spa business that’s doing well, you’re more than capable of being that numbers person! You just need the right tools and guidance.

At the end of the day, I want you to optimize and maximize your spa business success. But you should know that it will require a leadership commitment from you to track your numbers so that it’s easier to generate growing, consistent, and goals-aligned sales.

From the heart of the incredible Maya Angelou, ”When you know better, you do better!”

Ready to Dodge the Money Trap and Start Earning More?

I’m always here to help. Let’s get the ball rolling on your revenue growth today.