5 Ways To Save Your Medical Spa Business During the COVID-19 Pandemic

Once upon a time, I was the General Counsel, the head of sales, and the crisis manager of a large multi-state aesthetics practice, flying from location to location around the country dealing with a new issue nearly every day. Prior to that, I managed a series of large crises (and some very good times) as CEO of a fairly large e-commerce company. Most recently, I had to be the crisis manager of my personal life. 

In a crisis, the essential steps that have worked for me are pause, assess, and pivot. PAP isn’t the sexiest acronym out there, but it prevents total disaster. Here are some practical tips on how to apply PAP to an aesthetics practice that is closed due to Covid-19 in order to keep that practice from going out of business.

#1. Make Money Virtually

I know what you’re thinking. You see patients in person. You perform treatments in person. There’s no FDA-approved way to do Botox treatments virtually (yet). Your practice management software doesn’t have the capacity to do virtual consults. You’ve furloughed your employees. All of that may be true and terrible, but it’s not changing right now. Focus on what you can change. Pause, assess, and pivot. Here are 4 ways you can make money virtually with your aesthetics business, despite the current situation.

a. Virtual Consults

Turn your scheduled client appointments into virtual consults instead of canceling them. Open your books for online scheduling of virtual consults. Assuming your practice isn’t a covered entity under HIPAA (which means you don’t accept government insurance), and given the current relaxed environment on everything virtual, you can pretty safely do your consults using Facetime during the COVID-19 pandemic. 

During the Facetime consult, offer to lock-in the price for your clients by pre-selling them the service at a discount. Make sure to develop written rules for this, including a return and exchange policy. When Facetiming with your clients, ensure that sure you’re in a quiet and clean space and that the background is appropriate.

Potential deals you could offer include a 20% discount for pre-purchased service up to $500, or a 30% discount for a pre-purchased service $501+. If you don’t have a way to take your client’s credit cards virtually, set up www.square.com or www.stripe.com in minutes. Keep in mind that payments taken over the phone or Facetime, without swiping a card, are charged a higher merchant processing fee and carry increased risk without the client’s signature.  

If your staff is conducting these Facetime consultations, make sure to have written rules in place. For example, if you don’t allow your staff to prescribe certain medications in-person, make sure that rule carries over to virtual consults. 

Do not attempt to diagnose COVID-19 over the phone if you are not qualified to do so. 

b. Online Skincare Sales

Nearly every medical spa I’ve seen has stockpiles of skincare products. Put them on your website for sale and ship them to your clients. Don’t have an easy way of doing this with your current website? You can set up an online store on www.square.com in minutes without knowing anything about web programming. Ebay.com is another great option that doesn’t require any programming knowledge. Some skincare brands (SkinMedica, Obagi, SkinBetter, SkinCeuticals, Neocutis, Dermatologica, etc.) normally prohibit or restrict online sales of their products. However, in a crisis, perhaps they are not going to care if you sell their products online, especially if you’re going to use those funds to pay bills from those vendors.

Use the skincare orders you get as an opportunity to connect with your clients — include a short handwritten note (use gloves!) with each purchase about how to use the product, next steps, etc. This is the kind of service your clients won’t get from Amazon.

You may ask how will you get these skincare orders without a large marketing budget. I wouldn’t use Google AdWords for this, but instead I would promote this on your social media and ask your staff to do the same. Think of unique ways you can add value to your clients’ lives as you do this and add that special touch to each order.

c. Gift Card Sales

A spin-off from the idea above would be to sell gift cards via your website and virtual consults. These gift cards would be more flexible for clients and allow clients to spend them on whatever they wanted at your practice. It’s a great way to raise capital for your business. I’ve seen aesthetics companies sell hundreds of thousands in gift cards and prepaid services in a single day. There’s a single location practice in Kentucky that sells $2M in prepaid services one day! Make sure to have a clear and written return and exchange policy for your gift cards to avoid costly misunderstandings later. Be clear about what the gift cards are valid on, and until what date they could be used. 

For those of you who have an Authorize.net account, your account includes a digital invoicing option at no additional cost that allows you to create and send an email invoice to anyone. 

d. Electronic Product Sales 

Think of electronic products you could sell. By electronic products, I don’t mean TVs. I mean how-to guides, books, any content you could write and charge some amount for, that could be emailed to your clients. Long ago when I was studying for the New York Bar Exam I made a killer outline that I sold on eBay. It didn’t cost me anything extra to sell it to 100 people vs one and I fairly easily made about $6,000 doing this in a short amount of time. When someone would place an order, I would simply email them their electronic product.

With people not being able to get their maintenance treatments of Botox, fillers, microneedling, laser hair removal, and other aesthetic services, perhaps your electronic product could be a customized at-home skincare regimen to make someone’s Botox last longer. 

Another subject you could write about is face and body hair management during the quarantine. Should people start shaving? What products should they use? Is it safe to do at home waxing or to buy one of those at home not FDA approved lasers on Amazon or eBay?

What’s nice about electronic products is that the cost of goods sold is minimal and doesn’t become larger as you sell more quantity of products. It’s the opposite of your Allergan Botox bill! This type of product is very scalable. It’s also easy to try, and you can sell it on your Square online store or on eBay if you don’t have an e-commerce enabled website already.

You could also incentivize your staff to come up with electronic products of their own to sell. Many people are home with lots more time on their hands than they normally would have, and so this is a time where creative ideas can flourish, even more so if they are properly incentivized. Do a staff contest where the winner’s e-guide gets published and they share in a percentage of the profits (where allowed by law).

At a practice I know there was a Nurse Practitioner who wanted to launch IV therapy for the business. When given the opportunity she wrote a how-to guide on how to do these treatments that was incredibly good. This guide started to be used by everyone in the company who ended up performing these services.

#2. Question Every Expense

Make a list of all of your monthly business expenses, no matter how small or large. Categorize them into fixed expenses that don’t fluctuate based on how much you sell, such as rent and administrative staff salaries, and variable expenses that change with how much you sell, such as cost of goods sold (product costs), commissions, etc. Try to convert all of your expenses into variable expenses. If you absolutely need your administrative and managerial staff, ask them to take a pay adjustment that correlates to how much business income you have coming in. Talk to your landlord and see if you can skip or delay your rent payment. 

I had to do this when I was getting divorced and it was both scary and sobering seeing all of my expenses in a Google sheet. I downloaded all of my expenses from my American Express credit card statement into a Google sheet and tried to eliminate any that I couldn’t afford any more. Did I really need to be taking Uber vs. taking the subway? I challenged myself to save $500 a month by not taking Uber no matter what, even if it was to go to the airport. After a few weeks of taking the wrong trains and subways, surprisingly all became ok. I can now navigate the NY subways and busses like a boss, and there’s something fun about going to a five-star dinner in a killer outfit riding the M14 Limited Bus.

This project will also allow you to see how much revenue you need to cover your expenses each month. This number can be used as a budget or forecast. I know many small business owners don’t use a monthly budgeting process for their business, and this is the perfect time to start doing this.

Contact every vendor and ask them to extend payment terms. Don’t just disappear and ignore bills. Don’t ghost your problems. This isn’t Tinder. Have a hard conversation with the human being on the other side of the bill. Often vendors will be way more understanding than you expect. The major aesthetics vendors have extended their payment terms by an additional 30-60 days already, but you can always ask for even more extended terms. Pick up the phone and call. Worst-case scenario: they’ll tell you no, but it won’t hurt to ask. 

Allergan, Galderma, Merz, and Evolus have a much bigger cash reserve as a percentage of sales than the average medical spa. I am sure you (or your accountant or lawyer) can negotiate better than the standard 30-60 day payment extension they are offering. Credit card companies, even American Express, are also giving extended payment terms, and so you may be able to get an additional 120 days between contacting the vendors and the credit card companies. Mortgage and utility companies are also extending their payment terms.

Be careful of calls you may get about past due bills. Scam artists are calling people with the classic “unless you pay the $500 now that you owe for your electric bill, we are going to shut off your electricity.” Don’t pay when you get incoming calls like this, always make outgoing calls to your creditors to verify what you actually owe that the callers told you that you owe.

Use free services like www.creditkarma.com and https://www.annualcreditreport.com to monitor your credit and spending and to make sure that no fraudulent charges appear on your credit report. You can also use the annual credit report website to dispute any inaccuracies you see on your credit report.

#3. Be Good To Your Team

People may not remember what you did, but they will remember how you made them feel. In times of crisis, the world may seem like it’s being cruel and unfair to you and to your business. That’s life. As a leader, it’s your job to make lemonade out of lemons, to lead and to inspire, and not to react in anger. Treating your team poorly or callously in times of crisis won’t do you any good. This doesn’t mean that you should pay salaries to people using money you do not have, or that you should be a pushover. But it does mean treating people with dignity and respect even if you have to make tough decisions and deliver bad news.

Transparency and vulnerability is important, especially during difficult times. Show your team your bank account statement or your credit card bill. Explain the why behind your decisions. It is hard to be this vulnerable, I get it, but it’s necessary. Ask for suggestions on how to cut expenses and allow people to see how much cash you have in the bank. You and your team are in this together, and the idea that may save your company may come from one of your team members.

Give your team the opportunity to do work-from-home projects that generate revenue for your company. Really get to know each of your team members and their strengths and weaknesses. Perhaps someone needs food delivered to their home, or someone else has some extra resources to give. Or maybe you have a hidden star on your team who can help you in a creative way in this difficult time because of some past experience they had that you didn’t know about.

#4. Work on the Little Things

We all have small (or large) business projects we’ve been ignoring because other projects take precedent. This is the time to do the tasks you’ve been procrastinating: update your website, work on your marketing materials, revise treatment plans and protocols, write your employee handbook, etc. You don’t need a large staff or a large budget to do these things. For me, this has been a time of organizing my files, making sure I stay up-to-date on regulations, and coming up with written plans for the future. 

Focusing on these small things that I can work on and control makes it more manageable to stay sane while being sequestered at home. There’s also a certain comfort in working on the things we could control during a time of crisis.

#5. Don’t Let Your Clients Forget You

Reach out to your clients on a regular basis. Depending on the size of your client list and the number of resources you have, this may mean personal calls or texts to each client, or weekly email newsletters from your business. Clients have a short attention span, but they will remember how you made them feel.

A popular statistic in advertising says that clients need to see something 9 times before they remember it, so plan on and wrote at least 9 email newsletters (or other means of communication with your clients).

I would normally recommend that personalized cards be sent to each client, but it’s probably not a great idea as it may potentially spread the virus. But, everyone loves getting something they didn’t expect, so try to think of something else you could do for your clients that they won’t expect. 

These are uncertain times so be careful about promises that you make, both to your staff and to your clients. At this moment it’s not certain when businesses will re-open so don’t put a certain date in your communications you’re not sure of the date. It’s ok not to be sure. It’s better to underpromise and over-deliver here.

Stay safe, and feel free to reach out if I could help in any way.