00:00:04:08 – 00:01:13:20
Welcome to Shorr Solutions: The Podcast. I’m your host, Jay Shorr. I’m the CEO and founder of Shorr Solutions, a national and award-winning consulting firm, assisting aesthetic and surgical practices with their operational, administrative and financial success. I have an amazing team of practice management experts and clients across the U.S. and as an industry expert with firsthand experience owning a multi-million-dollar cosmetic dermatology and plastic surgery practice.
Listen in as I lend you my expertise and best tips to successfully manage and grow your aesthetic practice. I will also be bringing in guests along the way, so get ready to be equipped to operate your aesthetic practice strategically and profitably. Welcome to Shorr Solutions: The Podcast.
Disclosure
This episode of Shorr Solutions: The podcast was originally recorded as a webinar. However, we thought the content was so important, we wanted to make sure you, our loyal podcast listeners heard it as well. Thanks for listening and we hope you enjoy.
Good afternoon everybody, and thank you for joining another webinar. Shorr Solutions: The Webinar and our title today is How to successfully open and Maintain your New Aesthetic Practice from A to Z.
My name is Jay Shorr and I am the founder and CEO of Shorr Solutions, a national practice management consulting firm specializing in the operational, administrative and financial health and guidance of your aesthetic practice. Today is going to be a very interesting webinar because many people want to know how do I open and how do I maintain a successful practice?
So let’s get a couple of the ground rules off. First and foremost, number one, what are our top priorities? Safety in your medical practice, safety of your staff and safety of your patients is by far your number one priority. The second priority is maintaining and protecting the licenses of all of your providers. The third is have fun. Lastly, make money because medicine is a business.
00:02:33:22 – 00:03:42:18
So let’s talk about why it’s very important to know about data. Well, first of all, data from the Bureau of Labor Statistics shows that approximately 20% of new businesses fail within the first two years. Think about that. Out of every five businesses that open, one business will fail, and 45% of new businesses fail within the first five years and within the first ten years, if you can make it that far, 65% of businesses fail.
That is an amazingly high statistic. So what’s really important are the nuances of how and what and who do you need. All of these nuances to help you start and maintain a successful practice.
So what’s very interesting is I’m glad that you’re here because it’d be a pleasure to help you in your journey because we’re going to teach you how to successfully open and maintain that successful practice with multiple steps.
00:03:43:06 – 00:05:58:05
And the first step that you have to learn and understand always is before you even think about opening those doors, you have to have a business plan. And a business plan can run on the operational, administrative, financial, health and guidance of what do you have to do? But what is a business plan? A business plan is a written document describing in detail how your business is going to achieve its goals, but how is it going to achieve its goals? and that’s what we’re here to speak about today.
Because a business plan is going to lay out a written plan from an operational, administrative marketing and financial viewpoint. It’s going to speak about people, it’s going to speak about places, it’s going to be about things, is going to be about money. Probably the most uncomfortable thing to speak about is your money, because you’re spending your money on everything that’s going to help you make money.
And sometimes a business plan is prepared for an established business, either moving into a new location or opening up a brand new location. And the purpose of a business plan is so that you can review it to really ensure and maintain that you’re on track. But it really most importantly about a business plan is for the financial part, if you’re going to a third party lender, an angel investor or whatever, a bank, what do they want to know most?
How how do they get their money back? And therefore all the nuances of your business plan? When we write business plan, it’s basically an autobiography of who you are, what you want to do, how you plan to do it, what makes you that resident expert, your geographic, your demographic studies, the equipment that you’re going to use, your equipment you’re going to buy, the revenue that it’s going to get generated by it, the profitability, P&Ls for next couple of years, and then how are you going to repay that note? So that’s what a business plan in general is.
00:05:58:06 – 00:10:30:22
So let’s talk about the components of a business plan. There’s four major components: A forecast, a plan, how you execute it, and the review. So the forecast is the plan of an assumed or calculated idea towards your goal. So the forecast means that we’re going to plan what it is that we want to do.
The Forecast
All right. We’re going to forecast it. We’re going to say, I have a vision and my vision is X and my plan is Y. That includes the actual steps that are involved inclusive of that operational administrative and financial plan. I know you may get tired of hearing me say operational, administrative and financial, but they’re very important because a bank wants to know about people, places and things.
The Plan
If it makes you feel like you’re back in third grade English and you’re learning about what are proper nouns, person, place or things, well, that’s actually what the plan is. The actual steps that are involved of how you’re going to get there. And the end result can be determined through the plan.
The Execution
All right. And from there, we have to follow through with the execution, though the execution is by far the hardest step here because it takes a lot of humans, we call them resources and departments to get involved.
It could be your accounting department, It could be your medical department, it could be your medical assistance, it could be your accountant, your attorney, all the people involved, your consultants, the execution. Who and what does it take to be able to follow all the steps of your plan? That’s the hardest part, because things change along the way. Another way, stuff happens and personalities get in the way.
Because if you have multiple people trying to execute this plan, then you have to depend on human resources. H.R. Human resources, by far the most important resource because they will make and break any business and we’ll get into that in a minute.
The Review
And then we have to review and rereview because the plan has to be reviewed, reviewed again and even possibly again because the more input along the way that you have, the better off we are.
And many times, although it can be micromanaged, more, is better. Why do we review it and rereview it and rereview it again? Because many times in a perfect situation, perfect situation, you may say, well, does the moon in the stars have to line up in order for me to be successful? I’d like to say yes, because things happen along the way.
The cost of capital. Interest rates are going up. We can get into an inflation. We get into a recession. I don’t want to get to any of the politics during this webinar. People, they may want more money. The interest rates, like I said, from the bank, might be different. There may be shortfalls in inventory and supply chain management.
So when we first set up this business plan and then our execution, we went to review it. And what ended up happening, when we went to review it, what we noticed that the results that we were achieving were not as desired or they weren’t as planned. That’s why we review it again and then we rereview it again. I’d like to say in the very beginning we can do it weekly, then it goes to quarterly.
I never like to review my business plans anything more than quarterly. But seriously, you should already have your third quarter business plan already in place, even though we’re currently in the second quarter of the 2023. That’s when you should be reviewing and re reviewing your second quarter business plan and executing it. But your actual plan now should be for your third quarter because what you’re going to get today is from the plan that you started three and six months ago, the results that will now be forthcoming.
And then what do we do? The forecast has to be in the very beginning as well.
00:10:30:23 – 00:12:06:16
So there’s four components to marketing. In our marketing component. There’s four P’s.
The product
The product. What is it that we’re going to market and what is the service that we’re going to have and what is the product we’re going to sell? So that’s very interesting.
We have a laser, we have skin care product, we have services, we have surgery. That is the product that we’re going to sell.
Price
And the second part of it is, but what are we going to sell it or how much money? Somebody once told me, Jay, it’s not about the money. It’s about the MONEY, because that really takes a precedent in what we’re doing.
So what can you sell that procedure a product for?
Promotion
And then third, the promotion. How are you going to position it in the industry? What is the promotion? Is it the procedure? Is it the skin care product or is it you? So it’s all three.
Place
And the last four of the P’s is the place where and how are you going to sell or promote this product or procedure?
Now, I know you’ve heard that old adage location, location, location, that’s called real estate. And that’s what the place is all about in your four PS of marketing.
00:12:06:17 – 00:17:09:16
Now let’s get to the financial component. This is by far one of the hardest and the hardest pill to swallow because it’s talking about money and people are not comfortable when they talk about money or they’re not knowledgeable enough in how to really totally understand everything.
So when we’re talking about a financial component in a business plan, you need to include the following.
Startup Summary or a Past Performance Table
First of all, a startup summary or a past performance table. Past performance is good in analyzing the continuation of running your business, but a startup summary is one of the keys to starting a brand new business.
Bank Statements and Tax Returns
And then if you have bank statements and tax statements, these are tax returns are going to be very important to put into your business plan because angel investors, third party lenders, banks, they really want to know what type of money do you have, how much money do you have?
If it’s the analysis or they want to know what is your past historical performance so that they can know? Are you a good client to possibly lend to?
Table of Personnel, Wages and Salaries
And then a table of personnel, wages and salaries. But why is that? Because we want to know what is our human resource going to cost us? Because we have to know, starting from the director of First Impressions, previously known as a receptionist, and you notice how I say previously known?
I say previously known because our director of First Impressions that almost single handedly is almost as important, if not equal to any other person. Because if we don’t make a good impression by that director of first impression a.k.a and formerly known as the receptionist, we won’t have any patience to continue to come back because I can’t tell you how many times patients will say I love that person that answers the phone.
I love the person that greets me when I first walk in the door. They make me feel so comfortable and that’s what it’s all about. It’s about people. All right. So we want to know what is our staff going to call us? All right. And what’s it going to cost us? Because, you know, it used to be the personnel department and I had my wife and I were joking about that last night. Who has even heard of the personnel department? unless you look like me, all right. You won’t know what the personnel department was. It’s H.R.!
But I used to know. Used to have to go to the personnel department
Cash Flow Statements
And then cash flow statements. When I teach a financial, you need to know about cash flow statements commonly known as P&Ls and balance sheets, because in the cash flow statement, you have to know what comes in and what goes out.
Hopefully more comes in than what goes out, but maybe not in the very beginning. You may take a loss in the first year or two, and if you ever watch Shark Tank, I’ve seen every episode, they want to know what is it cost to produce? What do you sell it for? What is your margin and are you making any money?
Usually, no. We took a loss in the first year or so and that’s expected because oh boy!, the capital expense, the amortization, the depreciation… a good accountant will back some of that stuff out because we want to know… the common term. You’ve heard on the running of your existing practice, the term EBITDA, EBITDA, tomato, tomato, vase, vase. Same thing is the earnings before interest taxes, depreciation and amortization.
What are your earnings? All right. We can draw and take some of that stuff out.
Break-Even Analysis
And then what is your break even analysis? Will it come at the second year? The third year, the fourth year? Well, will we do a pro forma or a feasibility analysis? We determine what increases for revenues and what increases for expenses do we have in first year, second year percentage wise, and then usually at what point, you know, you have your parallel and you have your horizontal lines, like we learned in algebra, and geometry years ago. When does it become our break even analysis
Balance Sheet
and then our balance sheet, our balance sheet is going to show our assets and our liabilities and they have to equal. You may have additional cash, you may have debt service, but it’s called a balance sheet because they have the equal.
Feasibility Study
And then there’s a feasibility study, which I mentioned. A feasibility study takes into account five or six different financial components that lead you to a final summary to determine what is your break even point. All right. And that’s your appendix for your first year financials, second year financials and third year.
00:17:10:05 – 00:20:34:03
So now let’s talk about an operational component. The operation plan gives you a detailed outline about the structure of your business because your manufacturing, distribution and patient acquisition. Your patient acquisition means how much does it cost me to acquire a patient? Well, let’s determine. We don’t know what your marketing budget is, and if your marketing budget is X amount of dollars, we need to know that it cost us X amount to get that patient into our door.
And then we have federal, state, local laws that may vary to the extremes. You have CME, continuing medical education availability, society updates. How do I choose my vendors? These are all under your operational. Remember, I said operational, administrative, financial marketing. It’s all going to come full circle. How do I choose my vendors? How do I select them and why?
The choice of your vendors can be multifaceted. Do they allow me to purchase everything I need from them, or do I need to go to multiple different vendors to get different things? Medical supplies, capital equipment? You know, depending upon the services that you want to provide, your vendors can be massive because you’re going to have to pick multiple vendors.
One may not have the piece of equipment you want for a vascular laser for telangiectasias and hemangiomas, they may have different ones for broad base light, IPL, they may have a different one for laser hair removal. You know, they may have one with different a 532 to 1064 for the different energy levels. What are my transportation costs when I’m purchasing something?
Do I have shipping and handling, Do I have to pay extra fees for quicker delivery? And what is your backup plan and what quality controls do you have in place when what you planned doesn’t work? We do not live in a perfect world situation, and I’m sure in your personal in your professional life, you’ve set down certain standards and then you look back and you say, Wow, how did that happen?
I didn’t get the results that I expected to get because life gets in the way. Either there was a price increase, there was a shortfall. I couldn’t get the loan. I couldn’t hire the people at the price point. They wanted more PTO, they wanted a higher salary, a higher wage. The consumables for my laser cost me more. I needed that Anesthesia gases used during surgery. I needed the local anesthesia that mixes nitrogen and oxygen. And I’m not going to mention any names. So all of these things happened, but did you have a backup plan? So in the financial component, there are two parts to the financial component, like a P&L that you have income, meaning money coming in and your expenses meaning money going out.
00:20:34:04 – 00:23:34:13
All right. So you first have to determine when you’re opening a plan and you open up your practice, determine the need of your business plan. When you open a new practice, you have improvement from the current status of your business. Do you need third party financing? And if you’re already in the latter stages of your business, do you have an exit strategy or succession plan?
What does that mean? Well, remember, this isn’t only a webinar, an opening, a practice, but it’s how to run and maintain. So somebody that is new to this may want to start a business. So we help practices and medspas and surgical practices all the time. They’re out of residencies and fellowships. They may just be coming out of academia or institution hospital based, or they came out and they were working for a group or another physician at one time and now they want to open up on their own.
But that is the beginning. And then we work with practices that have been running for a while to help them become as successful as they can. And in the latter stages, if you’re in the more mature age bracket, some of the doctors want to start in their 50s, some 60s, some are 70 and still working like myself. But do you have a strategy of how you plan to exit?
Do you want to sell your practice or do you just want to retire and then live the life on the land? Play golf a couple days a week, fish a couple of days a week, Travel or ride your horses, whatever it is that is your fancy. All right. So you need a succession plan because of all the years of hard work that you’ve put into this, you just want to end up closing your doors and say, and there’s nothing wrong with that by the way.
you can say it has supported me, my family and my work family for all these years very nicely. And now it’s time for me to retire, or do you want to sell out to some of these groups now that are buying out a lot of these practices, or do you want to hire somebody like us to find you a buyer and you need a succession plan and exit strategy because one day you just don’t wake up and say, you know, I want to sell or let me correct that one day you may wake up and just say, I’ve had enough.
However, I always say, let somebody help you increase adding additional value for your business so that when it comes time to really put it on the block to sell the value of your business may be worth tens, hundreds of thousands or a million or two more than when you first thought about it. That’s why you need that succession plan.
00:23:36:14 – 00:25:18:02
Yes. We’re going to take a quick break and a slight intermission, because what kind of business would we be if we didn’t tell you about our own services? I’d like to take a moment to tell you about our conversion cascade online course. We want you to be trained to convert more patients and boost revenue in your aesthetic practice.
So with our conversion cascade online course, you and your team will be able to master two key important things to growing your practice and becoming successful, converting and retaining new patients. So as a step by step sales funnel, the course is designed to help you and your team attract more patients, convert calls to consults, convert consults to treatments and procedures, and keep patients coming back for more.
Not only will our conversion cascade Online course help strengthen and develop your team’s phone and sales skills in order to acquire, convert and retain loyal patients, but will also serve as a valuable onboarding training tool for every new team member. Plus, in this course you’ll receive downloadable marketing checklists, phone scripts, conversion tracking tools and more. Sign up for the course to get started on increasing your revenue and converting more patients.
Today, it only takes less than 4 hours to complete the course. You can finish it at your own pace and you’ll have lifetime access. And as a special thank you for our podcast listeners. We’re giving you a 20% off discount. Just enter the code PODCAST to start saving. Click the link in our show notes to sign up for the conversion Cascade Online course and convert more patients now.
00:25:19:16 – 00:33:50:14
So let’s talk about getting to work, collecting the data that you need
Competition and Price Comparisons
competition and price comparisons. Now, when we do a business plan for practices that are just going to open up, we find out who your competition is and we’ll do price comparisons on the procedures that you want to do.
Demographic Study and Your Target Market Analysis & Summary
We do a demographic and a geographic target market of your specific area. Now what’s the difference? Demographics study is where you are geographic study. The demographic study might be age, gender, education, housing, school districts. What is the demographics and what are the demographics? All right. Of where you are geographics is where you are. The demographics is all the content contained there in people, places, things. So we’ll do a full study of geo and demographics around a mile radius.
I don’t mean one mile, it’s the specific mile radius. It’s like the old algebra and geometry where you stick a hole with a compass and you draw a circle around and you determine that five miles, ten miles, 20 miles of a specific zip code. So that will then give you all the information of the demographic and the geographic inclusion of your competitors and everything. It’s a segmentation.
Description of Your Practice and the Owner
and then the description of your practice and the owner. We’re actually going to make this like an autobiography. Description of your practice. What is it you want to market? What services do you want to provide? Who are you? What makes you qualified? We do an autobiography of you. What services do you want to provide? And we’ll do a little The autobiography of where you went to college and where you went to medical school and your residency, your fellowship.
So we’ll show all of your board certifications and things like that. That’s in the business plan, by the way, so that whoever it is that you’re showing this business plan to usually for capital, it’ll be a very succinct plan.
Equipment
And in that business plan, we’re going to put down what equipment you choose to buy. Could be capital equipment, it could be computers, it even could be website, it can be needles and syringes and and all the other consumables and disposables.
Feasibility Study
The feasibility study is all of those components marked ends up with a three year P&L, that three year P&L for that projection.
Management
And then we talk about who is your management team. Your management team can consist mainly maybe just you or you a practice manager and even your executive team. Now, of the dozens of clients that we have and have done these for, we act as their executive management team and the executive management team will consist of you, your attorney, your accountant and us and any other business advisors that you may have could even be your banker.
Because when it comes time to make decisions, I always urge our clients and prospective clients, let us be the bad one. Always say, I have to discuss this with my executive management team and somebody else will say, well can you make a decision? Well, Of course I can make a decision, but that’s why I have an executive management team, because I run everything by and that is inclusive.
Right now we’re working on several buyouts and we’re also working on several new building purchases and construction tenant improvement buildout. And what we’re doing is we’re working with leasing agents, we’re working with banks, we’re working with attorneys, we’re working with accountants and financial advisors of our clients to determine is it the best deal and renegotiating the lease with a good attorney as well.
Marketing Plan
All right. And then you need to have your market plan. So what do I want? My market plan, everything that we’re going to do in Q1 due to Q3 and Q4 because we’re going to do specific marketing plans and each one of those quarters. Banks love that. That’s not the financial analysis. Now, that’s only the plan of what you plan to execute in each one of the forthcoming quarters going forward.
People, when you do your business plan or the reviewing it, want to know that you’re treating this like the real business that it is.
Personnel
And then your personnel, your H.R. plan has to include an individual title, whatever you want to call it, of that employee with an individual job description. So it is a practice manager practice administrator, medical assistant, PA, nurse practitioner, director of first impressions.
All right, anesthesiologist, aesthetician, whatever. It doesn’t matter. Name that position. Have a detailed and finite job description and how much financial remuneration you want to pay to each one of those people within that range times the amount of hours you plan for that person to work. And that in and of itself will share the financial investment for all of your H.R. And personnel.
Risk Analysis, Use and Effective Financing
And then lastly, you have a risk analysis, use and effective financing. What type of financing are you going to use? We’re not talking about patient financing now. We’re going to use about how do I plan to finance my loan? And then you could also use effective financing or third party patient lender, be it Care Credit, Patient5, Creditcard.com, Cherry, Alpheon, any number of third party patient finance lending institutions.
Vendors
You also want to put in there your vendors. Now, what do I mean by vendors? Vendors can be multifaceted. If it’s at first supply vendors you can list on many McKesson, Shine, you can use Cardinal, any of the Medline, any of those that you’re going to use, and I know there are many, many more. And then you put what supplies and equipment you want out of that, what pricing that you can purchase it for and an estimate of what you’re going to use.
And then also for your vendors, your website vendor, your practice management software vendor, your merchant processing vendor, your accountant is a vendor, your attorney is a vendor, your practice management consultant is vendor. Why do I say that? Because each one may have an expense every month or every quarter, and that’s all going to roll out into the total expenses for the year.
Products and Services
And then, of course, your products and your services, because what that’s going to show is these are the products that I plan to service to my client base, my patient base. And out of those products, retail skin care product and actual procedures, this is how many and these are how many procedures I plan to do of each one of those procedures, at what price point to roll up to how much gross revenue.
Now, the gross revenue is going to be on one side of your P&L in income, and all the expenses that we talked about are going to fall on the right side of that P&L, income, expense. And then at the end of the day, we’ll have a full scale P&L. And I hope that after the first year that your income will be higher than your expenses.
00:33:51:03 – 00:34:15:16
All right. So we talk about a SWOT analysis, strengths, weaknesses, opportunities and threats. I don’t want to spend too much time on this, You know, what are your advantages of your strengths, your weaknesses, your opportunities, and your threats? Remember, some of the things are internal and some of them are external.
00:34:15:17 – 00:36:58:10
All right. So be prepared to include the following in in your bios, your awards, your honors, and even your voluntary contributions. People love to see that you are a real person and that volunteer for things, whether it’s pro-bono work that you do in a third world country and you help for cleft palate or whatever surgeries that you can perform, you volunteer at certain organizations. For example, I volunteer at a lot of different in mentoring young people, educational at a high schools.
I’m volunteering for the Joe DiMaggio Children’s Hospital. There’s so many things… people want to know that. All right. Then you have to have your bank and your credit application include your resumé, your CV, corporate formation documentation.
You’re going to need that because whether you are an individual, sole proprietor, a partnership, an LLC, a PLLC, a P.A., an M.D.P.A., alright, any of those things, a corporation, an ESCorp, a CCorp, I don’t want to bother you with too many of those things, but it’s very important that you include with the Department of State in the state or Commonwealth, where your business is going to be, how you effectively have designated your business to be, because you’re not going to be able to get any bank accounts opened unless you show that.
Show your diplomas and your licenses, meaning your college, your medical school, your residencies, your fellowships, your medical license, your DEA license, any of those.
And then you’ll want to show your exit lease agreement, because one of the major portions of your business plan and your expenses is going to be your lease. And a bank wants to know how much is your rent and what kind of a facility do you have. It will help you with the outlines, the architectural design of that to put into your business plan.
All right. And then you want to have your legal counsel information. And then, of course, if you’re an existing practice, your tax returns and if you’re starting your practice, you’re going to they’re going to want personal tax returns and your W-2s over a several year period of time. Now, they may also ask you to sign personal guarantees if you’re a non existing business or a business that just started. Why? because the lender wants to know, how am I going to guarantee I don’t want your laser, I don’t want your lease, I don’t want any of that, we want the money.
So what’s going to happen? They’re going to come back to you for a personal guarantee. All right.
00:36:58:10 – 00:40:55:01
Supplies and equipment. Why is it important? Well, inventory is the key to back order in out of stock situations now more than ever. You can’t sell from an empty shelf. And I know people say, well, I don’t have the capital, you know, to stock and to buy all this equipment.
Well, think about it this way. What would happen if you went into a supermarket and they had a gorgeous facility, lot of lights, beautiful aisles, but they had no food or paper goods on the shelf. How could they sell anything? Well, that’s why you’ve got to do that first and you’ve got to maintain that you have a product and things to sell in order to have patients and clients to buy from because your results are going to increase with proper and well-maintained equipment.
Because when you have good equipment and you market that equipment that we spoke about, first, build it and people will come. sound familiar, like the Field of Dreams don’t get caught up and then try to buy a coolsculpting machine today, when Coolsculpting five six, seven years ago was the big thing. You need to get involved and be on the forefront.
And I know vendors are always going to want to Coolsculpting and EmSculpt and everything like that. But ladies and gentlemen, I’m not trying to say that these machines are not good, but it’s like trying to sell the old thermage. I had Thermage and then I had CPT thermage and then I had NXT Thermage, and then they came up with other ones and it became old technology.
All right. So be very, very careful because Coolsculpting, which was at the leading of the game, then came out with all different types of upgrades and upgrades and more upgrades. Don’t try to market something that is old technology because people aren’t going to want to buy it as much. And I don’t want to beat up on Coolsculpting. I could do many, many other pieces of machinery that have been out for a long period of time that are no longer at the top of their game anymore.
Make sure that your patients drive the need versus using need to drive patients. All right. What do I say by that? Don’t buy the machines thinking that people are going to come to you. You have to have the patient base and then market to the patient base and get an idea whether or not they like that. I always have a suggestion.
I get, for what it’s worth, before I bought the machine, I contacted all my patients and I said, If we have this machine, what do you think? Would that be of interest to you? And it was almost like my own focus group and A/B testing and if they said, yes, I would take advanced deposits. And then once I got the machine in, I already had money to pay the machine down and I might even offer specials.
When I first got the machine in. Friends, family discounts bring it in. And then once you have that machine up and running and you’re able to make a lot more payments for it versus having to drive the revenue from the very beginning, it works, and financing is your key to cash flow. What do I mean by financing? I mean third party lender, family, friends.
I’m not so sure about that. Angel investors. Angel investors are not banks. They are private equity, venture capital. They don’t necessarily want to be a partner in your business. They just want their money back at a rate. Or they may take an equity position in your business but not really want to run and control your business. So financing is really key to your cash flow.
00:40:56:09 – 00:43:22:06
So what’s needed to start? Well, in order to start your business, location, location, location, remember I said that in the very beginning, real estate, you have to have a physical place to run your business out of and your build out has to be with negotiated TNI. TNI stands for Tenant and Improvement. With every lease that we negotiate or purchase of a building, there has to be TNI that comes from the landlord or the seller.
What do I mean by that? Well, my buying a warm shell, a warm shell means that it’s an empty building. Now I need an architect and I have to build it out. So I need to put up walls and I need to put in lighting and I need to put in flooring and I need to put in plumbing, electrical, mechanical.
Oh, boy. I hope I didn’t steer you off of doing this already. But what we do is we go to the landlord and we say, I would like to get X amount of dollars per square foot or a gross amount of money to help me offset that. And they’ll say, if you sign a five year or ten year lease, the longer term lease, the more money they’re willing to offer you.
So if you have a 2500 square foot, they may give you $10 a square foot. They may give you $250,000 or less, $100,000, $80,000, $50,000. They may give you a gross amount and this helps to offset your expenditure. But remember, whatever tenant in improvement that you do to that building, even if there’s going to be out of pocket money in yours, if it’s not something that you can wheel out, it remains part of the building.
So anything that’s built in and anything that’s plumbing and electrical, mechanical stays with the property. All right. Very important. You need supplies and capital equipment. Those are your supply vendors. The McKesson’s, the Shines, the Cardinal’s. Capital equipment are all of your lasers, different types of lasers. I’m not going to get into vendors. You have to have good lenders and proper third party financing, whether it’s that bank and knowledge of what is really required.
00:43:22:06 – 00:48:45:13
So the design and layout what you need to start. So let’s say you’ve got your tenant and improvement build out and you know you have to have an architect because sometimes with zoning you can’t even get permits unless you have an architectural design. An architectural design will give you that blueprint and you need to take that blueprint to make sure it will pass
zoning, it’ll pass electrical, plumbing, mechanical, fire, safety, all of those departments before you can get your certificate of occupancy, because you need to have all of your permits and then you’ll get your certificate of occupancy, your COO, because you’re not legally allowed to operate in that facility until you have your COO.
So you need your architect and then your designer and a decorator to make it that couture, beautiful facility that people want to come in because after that, that’s when you have your inspections, and your inspectors, because they come in, they make the improvement or approval, and then that’s how you’ll get your permit. Then you need your supplies and equipment. And lastly, you need patients, P-A-T-I-E-N-T-S, patients, because I know you’re not going to have any patience, P-A-T-I-E-N-C-E, because it’s going to be driving you crazy while you’re going through this process. But you need cash paying patients that are going to come in and have all those wonderful and lovely services.
So you need architects, architects, kind of like Mohsen Ghoreishi. I don’t know if anyone of you know him, a wonderful designer and architect in our industry that will make your building and your office look so beautiful.
So the design What did I say? You have a need to start. Remember, permits. You have to have them approved per the building. You have plans. So you have to have your plan. Your plans is your architectural design. You cannot get a permit. All right? Without your plans, then they give you the permit and you have the zoning to make sure you’re properly zoned a building.
Fire safety, mechanical, electrical, plumbing and safety. And they’ll do inspections. And they may even do re-inspections if it didn’t meet to their standards. And then lastly, they’ll give you the certificate occupancy when every one of those inspections pass. If one does not pass out of all of the other ones, you have to go back to the drawing board and complete the one that has not passed before they’ll give you that certificate of occupancy.
and then what’s needed to start? supplying equipment. What vendors are you going to use your biomedical hazardous waste, disposables and consumables, you need H.R. Vendors, the vendor selections. If you need EMR/HER, your information technology (I.T.) because in case any of that EMR/HER, or your computer systems break down, you need an I.T. vendor because who’s to protect you in the event of an AI breach?
The artificial intelligence, and then you need a lawyer and you need an accountant to ensure that everything you’re doing is legal and financially and fiscally responsible, and then you’re going to need insurance. What kind of insurances are you going to need? You’re going to need liability insurance, you’re going to need insurance to cover your supplies and your capital equipment.
You’re going to need insurance to protect you from staff. All right. Called EPLI. I then you’re going to need cyber insurance and then you’re going to need general liability in case somebody slips, trips or falls inside. You’re going to need professional liability. All right. There’s so many insurances. And of course, you need staff. All right. And we went over that already.
So be prepared with the dollar figures that you’re seeking. I know the one thing that I can share with you. Take this to the bank. You will not come in on time or on budget. So let’s get down. Let’s get down to business. That’s a song that I, you know, has been playing. I heard that at the hockey game all the time and very important because you better be prepared with the dollar figures that you’re seeking because you might think that you get into this for $100,000 or $150,000.
If you’re buying an existing property that’s already built out, you’re going to blow through so much capital in the very, very beginning with all of those things that I mentioned, unless you buy a business that you’re really buying assets. All right. Rather than the business itself. All right.
00:48:45:14 – 00:52:54:10
So the next organization and operations of your esthetic practice, you need written contracts because nothing verbal holds up when you are getting involved with anybody, I want to see you have a written contract because let’s face it, when is the next time that you look at any contract, when you’re in trouble, when you have to go back to the contract.
Most contracts do it in a draw and you have to blow the dust off. All right. So with that, make sure that you have written contracts because nothing verbal holds up except in poker.
All right. Partnership agreements buy/sell agreements. Is it a partnership? Are the people with you in the PLLC in the MDPA, the DOPA, whatever your formation is, do you have proper buy/sell agreements? God forbid something happens to one of the people? Do you have a contingency plan in the event of a catastrophic situation? Catastrophic situation could be pandemic.
What do we do? You have a plan. Catastrophic situation can be fire, flood, disability, death, and in another webinar or one that you may have seen me do already for preparing for the unexpected in your medical practice, you would have heard about my personal tragedy. I’m not going to go into that today, but really, you should have contingency plans and an organizational chart.
The organizational chart lists from the top you as the doctor and everybody underneath you and who is responsible for what and to whom. And like I said before, you need job descriptions at every level. And I mean every level. Don’t hire somebody, give them an offer letter without having a job description in that offer letter. Now, let me clarify.
I hear this all the time from clients and they tell me no, a contract that they give the employee a contract. You’re not giving them a contract unless it’s a higher level or salary type, higher level employee. Otherwise it’s an offer letter. Most of you work in right-to-work states. I’m not going to get into the legal issues about right-to-work and Canada.
You have to give them notices. In certain states you have to do X. In other states you don’t have to do that. All right. Just have job descriptions so that people can come back to you and say, you know, when you hired me or we interviewed, you never mention that I have to do that. The job description ensures that what I said is what you heard and summarize that in writing and anything that you have and anything that you do from opening the front door to turning on the correct pipe to ordering sutures and sweeping the floors and who is responsible for what at each level, have a protocol.
How do we take pictures of a patient? who takes pictures of a patient? Do I How do I take them? And at what angles? Medial lateral, frontal, anterior or posterior? Very important. What kind of camera? Have a picture of the camera? What room? Show people the pictures say a thousand words to people and then have scheduled performance reviews for your staff and don’t have performance reviews just for monetary financial remuneration, raises.
Give people performance reviews so that they are aware of where their shortfalls and their opportunities lie. I never want to be judged on something once a year. And then you’re going to tell me I didn’t get it right. And then because of that, I’m not getting a raise. Do my performance review quarterly or every couple of months or six months so that if I have shortfalls or opportunities, we discuss that you bring that to my attention so that I have a chance to work on it perfect it and I really can get the raise that I deserve.
00:52:55:03 – 00:55:01:23
As we get ready to wrap it up, make sure that all your T’s are crossed and your I’s are dotted. Because if you haven’t submitted a business plan before or had one approved, seek professional advice. And who do I seek the professional advice from? Your accountant? Your attorney, and even really, really, really experienced industry consultants like the people you see on your screen right now.
That is me and my team. We are a team. One of our employees named us La Familia and that’s exactly what we are. We are a family and hopefully so are you. And at the end of the day and years of hard work, don’t be scared at the transition of you, the what you used to look like to what you look like now
As you can see, a lot of hard work burned all the hair off of my head, but it’s been a fun ride getting there.
Successfully Open Your Aesthetic Practice with a Coach
So to successfully open your aesthetic practice with a coach, the do’s and don’ts, site selection and negotiation, equipment and vendors, H.R., recruiting and hiring your team. Process and protocols and management and marketing, and everything like that.
Because you want more than just another consultant. All right? You want is somebody that’s available when you need them. What you need is someone like us who you can meet with us by phone, email, text, video. We have all types of formats to do that access to decades of firsthand experience and success in the cosmetic and medical industry.
Why? Because we are former practice owners of one of the largest practices here in the past of Fort Lauderdale area of dermatology, facial body plastics, cosmetic, plastic, gynecology and medspa. So see the QR code on your screen. Feel free to scan that QR code and schedule a 30 minute free consult with me or any member of my team.
00:55:31:21 – 00:56:34:20
And ladies and gentlemen, that is how to successfully open and maintain your new esthetic practice. I’m more than happy to open it up to any questions that you may have, and I’ll answer them now for you.
Okay. A question that I’m usually asked How do I find a good attorney? A good accountant and a good consultant? Well, first of all, as for references, ask friends and colleagues of yours who who they’ve used for accountants and for attorneys and for consultants, you know, go in online and look, ask for references as well.
And also, if you attend different conferences, speak to some of them out there. But when you’re looking for a consultant, please do yourself a favor. Look for a consultant who specializes strictly in your industry.
00:56:34:20 – 00:56:52:20
Another question I have is how long does it take to do a business plan? I would share with you that it could take us several months to get it together and the reason for that is there are so many things that you need to put in it and it goes back and forth until you get it right.
00:56:53:17 – 00:57:13:03
Okay. Which banks do I go through? Well, I would recommend high level commercial institutions, some that specialize in medical financing. All right. Are there any others? Okay. Ladies and gentlemen, thanks again. Good luck. God bless.
00:57:13:03 – 00:58:45:17
So that wraps up today’s episode of Shorr Solutions: The podcast. If we mentioned any website links, you can find them in our show notes to work directly me and our award winning team of consultants to increase efficiency, increase revenue and decrease costs, and your aesthetic practice.
Schedule a free consult with us today. We will help you establish and refine your aesthetic practice’s protocols for maximum efficiency and productivity, decrease your expenses and increase your profitability with an expert financial analysis of your business. Attract more patients, convert calls to consults, convert consults to treatments and keep patients coming back for more. With our sales training, coaching and complimentary access to our conversion cascade online course. Recruit, hire and train new team members and manage any staff turnover with our human resource expertise plus more, head over to our show notes and click on the link to Schedule a free 30-minute consult with us today.
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