00:00:00:00 – 00:00:54:19
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.
00:00:55:03 – 00:01:10:01
This podcast episode was originally recorded in collaboration with John Wheeler, CEO of Premier Medical Aesthetics Platform, Alpha Aesthetics Partners on the Great Friends Podcast. We hope you enjoy this insightful episode.
00:01:11:16 – 00:04:04:03
John Wheeler
All right, Mr. Jay Shorr, how you doing?
Jay Shorr
Wonderful. Thanks, John. Great to see you again, as always.
John Wheeler
Yeah, great to see you. I mean, you and I have become friends as we get to speak on the speaking circuit. I think we had a great panel at The Aesthetic Show last year that you moderated. And by the way, if anybody has the chance to see Jay moderate a session, you are one of the all time great moderators in moderating history. I don’t know how you feel about that or how you did that, but you’re amazing.
Jay shorr
Thank you, John. I have a different way of doing it than most people. I actually turn down a lot of moderating offers because if all you want me to do is introduce the next person by name and where they’re from, I’m not really interested. That’s not any value add to me. I really listen to every lecture and then I ask one or two questions that the audience may not want to ask or are afraid to ask and these are for education for people.
This is what this is all about, education. So we want to add the value.
John Wheeler
You know, you as a consultant, I think that’s what makes you unique is there are so many consultants that have a very superficial level of actual industry experience, right? When it comes to the day to day running of a practice. But with you, you had a handful of clinics, many of which were surgical in nature.
And a lot of what you advise comes out of that experience. I mean, how do you think that sets your advice apart from the average consultant?
Jay Shorr
I never knock my competition like a doctor shouldn’t do just show your value. But I believe as a consultant, what I bring to the table is I was a practice owner of a very large multi location practice before I got into consulting and my history of why I got into consulting could be another conversation.
But I’m also an educator and I’m on faculty at Florida Atlantic University in the College of Executive Education in Medical business management. So I teach at a major university for students too. But my experience in owning and running a very large derm facial body, plastics, cosmetic, plastic, gynecology and medspa, really gave me the experience to learn firsthand of all the mistakes that I’ve made and, you know, naturally to be a successful owner of any type of a business, you’re going to make mistakes.
But hopefully you make one more great sound decision, than mistake that brings you over that hurdle. And my role as a consultant is that it really of a fireman. We start from the operational administrative and financial health and guidance of a practice, and I try to share with people basically what not to do. And of course things are different, locations are different, patient base is different.
But I try to share the mistakes I’ve made. I’m never ashamed or embarrassed because that’s the education to hopefully guide you in the direction, not to make that same mistake.
00:04:04:04 – 00:05:40:15
John Wheeler
So let’s dig into that then. So you say you like to share what not to do. You go into a practice, you know, maybe it’s your first time there. It’s a new client. What’s typically the number one thing that you’re sharing of what not to do that most of your new clients have in common that they’re doing that they shouldn’t be doing?
Jay Shorr
First, know your regulatory guidance and compliance in the state or commonwealth in which you’re in. You know, I’m working with somebody right now that is a non-physician owned spa because in certain states the corporate practice of medicine is allowed in some states and commonwealths, it’s not.
And they, unbeknownst to them, they open their spa and they didn’t know that they were not allowed to own a spa. Being a non-physician in the state that they were in, I don’t want to get into the MSO and the MSA. That’s another conversation we can get into. But the main thing that people don’t do is they don’t have a plan and it has to be operational, administrative, financial marketing plan of what you should do for the following year with proper processes, protocols, procedures.
And you know, if you don’t do that, you’re basically running by the seat of your pants and you have nothing to gauge your business by because you can always alter your plan. I hope to write business plans and we change them all the time depending upon internal and external conditions and whether it’s traffic flow we didn’t account on or a pandemic or an illness or an injury or disability of the owner, These are very important things.
You better know what to do when what you’ve been taught doesn’t work.
00:05:40:16 – 00:07:19:00
John Wheeler
So if number one is regulatory guidance and compliance, what would number two be as far as what not to do that most of the new clients that you have, hey, stop doing this. Well, what would number two be?
Jay Shorr
Well, you know, I’m from Fort Lauderdale, Miami area. Go heat! All right. We’re in the Eastern Conference finals, but I bring this up for a reason. If you hire a warm body, you’re always going to be taking the heat. That’s where I bring the heat in, because what they don’t do is proper onboarding, because we help with staff hiring and training as well. And when we do that, don’t put somebody on your front desk, Don’t put somebody in a room without having them properly trained.
And and I call it onboarding. So when we have a client, we assist with the staffing. We actually have an onboarding checklist. And I know that most of the time you’re hiring somebody because somebody just left without the proper notice and it is really impossible to hire somebody, train them in that two week notice that we ask somebody to give us.
That’s just a formality. It really you need a whole lot more time than that. Don’t put them on the front desk without them properly being trained how to answer a phone. Don’t have them quoting medicine when they’re not properly licensed to give medical guidance. Make sure that they understand what you do, how you do it, credentialing the providers, making that client slash patient feel welcomed.
There are so many steps, as you well know, John, it’s just not sitting in that seat, sitting in your chair when a patient comes in, sitting in your chair, when a patient goes out without giving them the love.
00:07:19:01 – 00:10:24:14
John Wheeler
All right. So I want to dig in to that point a little bit, Jay So you talked about the onboarding checklist.
Let’s start with what you do. That for me, when I had our clinics here at the local level was one of the most difficult things to instill in people, right? Because it’s like there’s so much that we do and especially a lot of these medspa’s that have surgery as well. I mean, you could spend six months just trying to figure out what your company does as a new employee.
Right? So what are some of the best ways that you have developed to help new employees learn what you do?
Jay Shorr
Well, we have policies, procedures and protocols for everything in your practice that you do from opening up the door in the morning to the coffee pot to making sure that all the rooms are stocked and it is there protocols and how to do it, how to properly take a photo, whether it’s frontal, medial, lateral, however side, you know, and what to do, pictures of the cameras and where to store the photos, how to label the photos.
John Wheeler
So let me ask you this, though, about that, because I have purchased some of, not from your company, but like in previous lives, I have purchased some of these, like, you know, everything you need to know about SOPs (Standard Operating Procedures) for X, right? And it’s like sometimes it can feel overwhelming to get this big binder. I’m guessing your binder is, what is it? A few hundred pages of like, SOPs?
Jay shorr
Yeah, we have over 350 policies, procedures and protocols. And it’s not a binder, it’s an online. And if you want to purchase it, you purchase it via subscription. All of our clients, depending upon the level of program that you have, if you have a four hour a month consulting agreement with me, you get four free a month.
Six is six, eight is eight and ten hours a month, you get ten free a month. If you need one that we don’t have in our toolkit, is what it’s called, we’ll create it for you. I mean, we have such experience. Everybody that works on our team has been in a medspa or a surgical practice, so they really know it and understand it and what happens is they’re state compliant because the state of California is much different in their application for employment, for example, than it is for the state of Florida.
All right. So we work with a lot of the attorneys to vet them and bless them. But it’s an Excel spreadsheet with a list broken down and segmented by procedures and whatever, and then you pick and choose which ones you want out of that tool kit. And we will sell an entire tool kit to non-clients for a fee.
And then, many of them are things they may already have because it also includes procedural consents and they’re taken from manufacturers that are the consents and then will a hybrid them if you want. We just won’t combine a lot. We’ve been asked to combine the polymethyl methacrylate with the calcium hydroxides and hyaluronics all in one, but we won’t do that because the properties are different.
The contraindications and adverse reactions are different and we don’t want to combine to confuse people on the consent. So each property has to have its own.
00:10:24:15 – 00:12:29:07
John Wheeler
But for somebody that’s buying SOPs, let’s say, I mean, walk me through the art of implementing SOPs that maybe you didn’t create, right? Because I would imagine it’s a lot easier to intrinsically know how to implement an SOP that I sit down to write versus maybe buying 150.
SOPs like, walk me through that. Hey, here’s my 150 SOPs and here’s how we’re going to roll them out in your organization.
Jay Shorr
Well, if we are your consultant, then we assist you in doing that. And then we’ll have weekly meetings with your staff. And the weekly meetings with your staff can be either with your practice administrator, the owner, or even the providers and even what we call the director of First Impressions, a.k.a receptionist.
I really don’t like that word receptionist because they really are your Director of First Impressions. They are the person that a patient or client speaks with first when they call. It’s all in how they’re greeted. It’s the person that patient, client sees when they first walk in the door, and many times the last person that they see after they pay and they leave.
So we’ll have meetings and we have a conversion cascade course as well, which takes you from your total marketing and the job of the marketing is to get the phone to ring or a contact appointment request. That’s all that supposed marketing is for. Marketing gets the phone to ring. Now we have to properly train the person or people answering the phone to get that convert it to a consult.
And we do telephonic training and then from the consult we have to have the ability to convert you to the treatment. And the mistake that is made most often is the failure to properly credential the provider to make that patient feel that they can’t go anywhere else, that this is the person that I have to have treat me.
And I’m not any different. I see through smoke and mirrors, but I love to be told when I go somewhere to credential the person that is going to treat me.
00:12:29:08 – 00:15:38:18
John Wheeler
So that’s obviously then a great place to dig in. If that’s the number one mistake that you’re seeing, is not credentialing the provider. Give me some tactics and some tips to credential our providers
Jay Shorr
Depending on the procedure. If it’s a surgeon, for example, when we lecture I as a moderator, I’m going to step back for a second. You mentioned how I moderate. I don’t really care in your bio or as a doctor’s bio where you went to medical school, because my introduction of that person, people in the audience don’t care where they went to medical school.
What they want to know is the person that I’m listening to really qualified to give me the information that I’m going to hear. So when I hear John Wheeler at a conference, naturally I attend sessions really by topic and who is going to be speaking, because I know that when I’m going to listen to John, he is a high level executive in the industry.
He’s been there, done that, has the wells on his back to prove it. I’m going to learn something from him. So he’s been credentialed already as a patient. I want to be told that the doctor treats the staff. The staff love him. Jay, you’re going to love Dr. John Wheeler. He is double, triple board certified. He is a national trainer, he lectures all over the U.S. or around the world.
Already. If I’m being told that he is a pioneer in this industry and he’s being asked at all these conferences to speak, then without knowing whether he’s a good physician or not, I feel that he is or else he wouldn’t be invited and he wouldn’t be a national trainer by all the organizations Allergan, Galderma and the others.
So you’ve got to be able to make that patient feel that the person is going to treat them, whether it’s a doctor, whether it’s a nurse practitioner or a physician assistant, and it’s got to be the staff that does it. It can’t be the provider or else it seems like they’re bragging. It’s always better for other people to qualify you just like you did with me.
I didn’t have to say what a great moderator I am, nor would I. You did that for me. And therefore, in the minds of others, I become an expert. Why? Because an expert said I was an expert no differently than Google. How do you rank high SEO? By linking to other experts. And it’s that cylindrical link and it’s all how you market yourself as well.
People have said, I don’t like what doctors do on Tik-tok. I don’t like what they do on Instagram. And I say, Well, maybe that’s not for you, but do you know how many millions of people love seeing doctors do some crazy things because it makes them real people? Now, when I want to have a surgery, I want to see my doctor doing some real good educational stuff on the surgery that I’m going to do.
Or he’s done 10,000 knee replacements. Oh, that’s the guy I want. And he’ll have you up and walking in two months. Breast aug, tummy tuck, lipo. You’re going to be out of bed. You’re going to be back to normal. Just listen to your doctor. Patients love him.
00:15:38:19 – 00:18:44:11
John Wheeler
I want to take just a quick second to pivot and then I want to get back after that into what not to do.
I remember VCS 2018 and I just remember sitting in the back of that room for hours watching all of those presentations and you and your daughter Mara gave so many of them and just telling myself, This is what I want to do. I want to be an industry expert. I want to be on the stage of VCS one day, just like Jay, and now it’s been fun because you and I get to share the stage at VCS at a lot of these shows.
But how did you become an expert in the industry? How did you get to the point where you are today getting to speak all around the world to medspa audiences?
Jay shorr
Okay, so let me take you back. Back in 2000, I went to work for a very large dermatology, cosmetic facial body, plastics, cosmetic plastic, gynecology practice that had one office.
And then I expanded it to two offices and three offices and a very large office based surgery center. In 2011, the medical director was diagnosed with stage four cancer and in June of 2012, she lost her battle. That medical director was my wife. I no longer had the mojo to run that business. Fast forward, I sold the business and I was contractually bound for a year to stay on.
But in that last year I had a vision before my wife passed away to help other doctors of the mistakes that I’ve made. And truth be known. The Aesthetic Show was my first opportunity. I was asked if I could assist in writing the business section of the former Certified Aesthetic Consultant program, and I said absolutely. I’d be honored to do that.
Shortly thereafter, I was asked to be on their faculty and then asked to be one of their directors of the continuing of the program. And I was invited to speak. And then the moderate and moderate more and speak. And then Randy Waldman asked if I would speak at the Vegas Cosmetic Surgery show. And then I got invitation for the Facial Plastic Surgery show, and then I got invitation to this one.
And then now it’s a dozen conferences that I’m asked. And every time there’s a new one opening up, like the new American IV Association and International 5CC’s and IMCAS, and I hate to say no, but there’s so many. I just I have to take care of my clients.
John Wheeler
So you really experience just this, like, influence snowball that happened. I mean, you had one opportunity. You did really well at it, and then more opportunity started to present themselves. Is that kind of how it happened?
Jay shorr
Yeah, I got one, then two, and then arithmetically progressed, became four, became eight and then internationally it became Spain and India and Taiwan. So I became world recognized. But that doesn’t do anything for my business other than credential me because I must be an expert if I’m being asked to go and speak everywhere. But I only really want to speak now where I can get clients and you can’t do it all.
00:18:44:12 – 00:21:36:24
John Wheeler
So what would you say to somebody that’s listening to this that says, I want to become a KOL? Well, I want to speak just like Jay, just like John. I want to speak at all these shows. What would you say to that person about getting started and experiencing that influence Snowball?
Jay Shorr
Okay, my suggestion is come up with something that is unique, come up with something that solves pain points. How to keep patients coming back for more? Everybody speaks on that, dealing with millennials, everybody speaks to that. Websites and SEO. So many people speak on that with website companies and others. I speak on how to save money, how to increase revenue.
You know, the problem of processes and protocols, how to hire, how to train everything that is going to bring revenue and keep the revenue in there and not get you in trouble. What keeps you up at night? That’s what I speak on. That’s what I teach. So solve a problem. Kind of like how do people make it successfully on Shark Tank?
You have to solve a problem, otherwise everyone’s going to knock you off.
John Wheeler
I totally agree. And even if you’re saying, Hey, I don’t really want to be a consultant, I run a practice. I own a practice, I’m an MD, but I want to start speaking. I think that when we talk about a strategy around creating abstracts for people, that’s a big part of what I think about when I’m thinking about creating abstracts.
So every year I create between eight and 12 Abstracts. I submit the same abstracts to every show that gives all these different shows the ability to kind of pick and choose where they want to use me. Some shows are like, Yeah, John, we want you to talk about marketing. I know everybody’s talking about it, but a lot of the shows like John, we have way too many people talking about marketing.
But you also submitted an abstract about how to buy a laser. So let’s have you talk about buying lasers. I’m solving problems. I’d rather talk about marketing. But again, it’s what unique solutions to use. Part of the name of your brand. What unique solutions can I bring to the table that nobody else probably wants to talk about? Because it’s not sexy.
It’s not sexy Jay, to talk about inventory solutions. It’s not sexy to talk about Here’s how to install a security system that’s going to prevent theft in your office. Nobody wants to talk about that. Nobody wants to be that guy. But I’ll tell you what, because nobody’s talking about it. That’s your inroad, right? Yeah. You want to talk about it because that’s your pathway to speak at all these different shows.
Because the people that put on the shows say, hey, nobody’s talking about this, so we need somebody to let’s plug this guy in. A really good example. About a year ago, I got sued $10,000 because one of the videos on our website didn’t have subtitles, and so our website wasn’t ADA compliant. So you want to talk about a lane that’s not sexy, keeps you up at night, but nobody wants to talk about it.
It’s how to make your website ADA compliant so that you’re going to avoid tens of thousands of dollars in legal fees and penalties, stuff like that. It’s just that’s the lane
00:21:37:12 – 00:23:19:20
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.
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00:23:20:20 – 00:24:16:11
Jay Shorr
Let me share one simple step that I share with everybody. All the wonderful marketing ideas that people speak about will bring you in a dollar out of that dollar.
If you are lucky, you’ll get $0.30 to $0.35 because your cost of goods sold may be 50% of that dollar. Right? And then you have your fixed and variable expenses of HR and rent and all the other stuff. So you may be left with $0.25, $0.30, $0.35 on that dollar. If you properly negotiate and cut waste and disposal, every dollar that you save is a 100% margin dollar.
Where will you get a 100% dividend in any bank or your efforts? And I love teaching it because a light goes on. Jay Just said I can save a dollar on a dollar. How is that possible? Well, cut a dollar of an expense and you make a dollar.
00:24:16:12 – 00:29:45:17
John Wheeler
So this is something that’s called managing the middle of any business.
Right. And for somebody that hasn’t heard that term, managing the middle means you have your top line, your your sales, your gross sales. Then you have your bottom line, right. Which is your profit or your cash flow. The middle is everything that happens on that journey from top line to bottom line. So what I want you to do, Jay, if you could deliver 2 to 3 really good nuggets on managing the middle, some of your top two or three pieces of advice that you see most practice owners not doing, give us 2 to 3 of your best tips on managing the middle in the medspa industry.
Jay Shorr
Okay, so I love creating spreadsheets for analytics. I have won 2 award winning spreadsheets from Plastic Surgery Practice Magazine. One was an OR cost spreadsheet. The OR cost spreadsheet is a spreadsheet that will tell you to the penny how much your net profit was on every single case you do. as long as you properly enter the data. Everything has a cost, even a three cent peel pack.
But when you do 10,000 of them and it’s $300, if you save $100, $200 on each item in the course of the year and you’ve got 1000 SKUs, you’ve just saved $100,000, which is a lot of money. So supplies I have a spreadsheet that will compare vendor A to B, B to C, and then A to C, the gross aggregate of your best savings is where you should spend your time looking is how do I cut my costs, how do I manage contracts and recurring agreements?
Your most popular vendor is your most expensive vendor with an annual escalation fee and an auto renewal. If you don’t stop the contract within a certain period of time. So everything you use in your business from a marketing company to a social media company to a capital expense piece of equipment and needles and syringes, everything should be negotiated and you should demand and insist on price protection before prices increase, which gives you the opportunity to get a big buy in before the actual price goes up.
And trust me, John, when I tell you everything in life is negotiable, the worst thing that somebody can say to you is no, and you’re no worse off than you were from the start. But that’s what I do. I negotiate for people.
John Wheeler
And I think part of the strategy, too, around this, Jay if I had to assume, would be identifying what in your company is a commodity and just to define commodity, you know, corn is a commodity.
I buy corn. Yeah, maybe I care a little bit about yellow versus white, but I don’t really care where the corn was grown. Maybe we could talk about organic versus inorganic, too. But at the end of the day, corn, soybeans, gasoline, these are all commodities, right? Allergan would not be a commodity. Like I wouldn’t say Botox is a commodity, but I would say Henry Shine, McKesson, Cardinal, you know, where you’re getting your insulin syringes to inject or where you’re getting your gauze, your ice packs.
These are all commodities That I think is what you’re saying. Just find something that’s really good and the cheapest and keep tabs on how much you’re paying for everything. But what I don’t know that you’re saying is, you know, just go with the cheapest neurotoxin. This neurotoxin is cheaper than Botox. So just use that. Or would you extend it to that as well?
Jay Shorr
No, I really don’t do that. And I have discarded that word cheaper from my vocabulary years ago, and I replaced it with the least expensive because that word cheap not only refers to dollar, but cheap also reminds me of the quality. I mean, that’s pretty cheap, too. Cheap looking. It’s cheap acting. Oh no, I meant the least expensive or inexpensive.
First of all, it’s very difficult to negotiate with Allergan and Galderma. The only thing that you can do is negotiate with your sales rep and hopefully get additional training vials. And maybe if you get a bigger purchase and brings you to a different tier level and you get higher rebates and things like that can help you lessen the individual unit or per bottle fee, but they’re not companies you really can negotiate with.
I always say you need to examine efficacy versus cost. There are lasers that can remove hair and there are lasers that will remove hair and the least expensive laser. The spot size might be smaller. The rapid fire may not be as quick, whereas a more expensive laser, a better quality laser, a faster pulse that you can get a bigger area and a shorter period of time.
And in that business time is money. However, when one machine goes down and you bought it to treat four different things and you’ve scheduled several providers or you’ve scheduled several people on appointment, you just killed the schedule. So sometimes a lesser expensive device, Multi, that can treat a lot of things when you’re a brand new spa, don’t buy the $200,000 laser, grow into it.
John Wheeler
So would you add that to that list that you were talking about of what not to do? Don’t break the bank too early on some of these, you know, nicer types of expenditures. Would you have that on that list?
00:29:45:18- 00:32:00:11
Jay Shorr
I would. When you’re first opening a practice, you have to have that business plan. And I insist when I have a client who hires me because they want to open, I share with them.
We need to develop and create a business plan even before you start. And the business plan will incorporate people, places and things. Person is staffing and what is my staffing? If you got Grandpa to leave you $100,000 in a trust fund, now you want to open up a spa, forget about it. You don’t understand. By the time that you hire people because they have to get paid before you do and you need a place which is going to be three, five, ten year lease.
And what is that monthly going to be? Whether it’s 1000 or 3000 square feet at 20 or 50, 60 Square, what is your tenant improvement going to be unless you’re getting TNI from the landlord or builder? If you get a lot of money on TNI, that means it’s a shell and it’s going to cost you a ton. If it’s already a warm shell or a retrofit, it’s going to cost you less, then you’re going to get less in your tenant an improvement build out.
So that’s people. Places are now come things, things are machines because you can’t make any money unless you have things and exam tables and all the equipment that goes in. I had a $2 million OR I had 2 ORs to outfit that thing to make it Medicare approved and certified and the table and the equipment and the trays and the instruments and the backup generator.
You have no idea what that cost. Get professionals that know what they’re doing and get the business plan. And then what we do is a feasibility study. Feasibility study is a pro forma analysis for your financials, and it’s the cost of capital. It’s what’s your inventory going to be? What is your leasing, what are your machines, what’s your rent and everything like that or mortgage and build out.
And that is going to give you what are your revenues. We do a pro forma revenue with a base increase per year over three years and it’s a three year running pro forma. And the purpose of this really is to take it to a bank because all the bank wants to know is how do I get my money back?
And unfortunately today is not the time to borrow money. A year ago was the time to borrow money when you can get it at two and 3%.
00:32:00:12 – 00:34:08:22
John Wheeler
This is all pure gold here, Jay. I’m just taking so many notes. This is incredible. So you mentioned two spreadsheets. You talked about the first one, the OR cost spreadsheet. What was the second spreadsheet that was the award winning spreadsheet?
Jay Shorr
Supplies. And you mentioned three. So let’s mention those three, Cardinal, McKesson and Shyne. Everybody knows Shyne, everybody knows McKesson, everybody knows Cardinal. So my OR spreadsheet is broken up between medications, drugs, sutures, different tabs that all revert to page one of that spreadsheet. There’s multiple worksheets within the workbook, and each worksheet then funnels back of all the information.
So what is your total cost of sutures? $100 that reverts back to page one, total cost of sutures, and then the supply costs spreadsheet. You have to list all the supplies you use. I give you an example of what we’ve used, but not everybody uses the same thing. So you put your own in. But the formulas are driven in this spreadsheet and you put the cost and then the goal is how much is an individual unit?
And then you compare Cardinal to Shine, Shine to McKesson, Cardinal to McKesson, and then I’ll show you it’s plus or minus per item. And if you put in like on an order, how many you want, it will tally all three vendors what those costs would be. And you could see who would be the least expensive. I do advocate that you should use more than one vendor.
And here’s why. In the event of a supply shortage, you are dead in the water. If you don’t order from a specific vendor, they’re not going to make you a priority. But when you work with multiple vendors, the one who you do the most business with, when there was a, whatever shortage there is of the day, I always say split your order no differently than I’ve got my personal portfolio with multiple banks.
I don’t want to be in bed with only one bank because when I needed to lease equipment, when I needed multiple mortgages for properties that we bought, when I needed loans and lines of credit, I was able to get them from multiple sources because I was a preferred client.
00:34:08:22 – 00:39:00:09
John Wheeler
So let me ask you this. You said that within these different vendors, what you love to do is negotiate. I’m sure a lot of our listeners say, hey, I actually don’t love to negotiate is something I’ve never done before. What’s a script that you have used or would use to basically pit these different vendors against each other to lower your cost in these different orders
Jay Shorr
Depending upon the vendor. Understand that many, not all, many are commission based. So if they lose your order, they’re losing commission. There is wiggle room. So I always say, you know, don’t write a check that your buck can’t cash because you really want to be able to back it up. I’m not going to show my cards in a poker game. I can bluff, but vendors usually know their competition, just like we as practice owners know what our competition is.
The thing that I used to use is get all my costs together so that I have back up and share with my reps that this is what I’m able to get it for. Can you match it? now when I’m dealing with capital equipment, which is hundreds of thousands of dollars in purchase, Now, I always say go to your vendor with an education and how I negotiate is nothing against salespeople, but salespeople I use the term are politically impotent.
You go in and the salesman tells you the price. Today, there’s not as much wiggle room as there used to be. They can’t do it. So then he wants to bring in the sales manager. Now you’re not buying. And then they want to bring in the general manager and they’re going to buy in and they’re going to bring in the owner.
Tip number six of my lecture on top six negotiating skills is don’t ever be afraid to walk away from the deal. There are more things to sell than there are buyers. So therefore the demand is not equal to the supply. Therefore, what I say to a client first, what is what are you willing to pay so that there’s a happy median for a win win because there is a floor and a ceiling price and you have to know what that floor price is.
I ask the client if you can get this $125,000, are you prepared to buy it? Yes. I then go to the salesperson and I usually like to go to the region manager, the VP of sales, and they’ll give me their price and I’ll say, Look how long have you been cultivating this lead? And John, you and I both know it can go a year.
They first come in to see you. You’re not ready because we’re playing the game or we’re not ready yet. It’s a new device. We kind of come out and then the fastest way to get rid of your laser sales rep is to buy the laser. Right? I didn’t make that line up. That’s what’s in the industry. So laser sales reps don’t hate me. I didn’t make that line up.
However, I will go to the rep and I’ll say if you can do it for $115,000 When the price was $125,000, I am prepared to sign the deal today. Right now, send the docusign over, we’ll sign it. Unto your next client. Time is money. The bottom line might be $125,000, but one not going in at $125,000, All right. That’s the most ridiculous thing. I’ll end up at $125,000.
John Wheeler
Do you find that the end of the year is the best time to do this versus the end of quarters or any other time in the year? Is there one time that stands out above all others in your mind?
Jay Shorr
Yeah. Let me share why a lot of the vendors come in and then they really hawk you.
Even my neural modulators and dermal fillers, salespeople. I’d say, you know, I’ll call you when I need you to order because I had a standing 25, 50 syringes a month, 25, 50 bottles a month. But don’t ask me at the end of a quarter, I used to call the order of the quarter. I’m your guy. When you need to make your quota, I’ll give you your 75 or 100 bottles when you need it, or 20 if you’re only ordering ten.
Some people can’t afford or don’t have the usage for that many. So you can increase your order. You’ll get premiums by training vials and syringes and things like that from the salesmen like that. But understand that capital equipment vendors, the reason you can get great deals is most of the time they’re publicly held companies and they have shareholders value and the stock is predicated upon the movement of the equipment.
And I always say to my client, don’t get caught up in show specials because I do a dozen shows like you, a dozen shows a year. So if you didn’t get the special this show, June is VCS. I want to be at the Aesthetic show. I’ve got another half a dozen shows yet to go, so we’ll get you the deal.
Don’t get caught up in show specials. There’s always a show. Now, sometimes if you can get a gently used demo with a full warranty, that’s a great deal.
00:39:00:09 – 00:43:51:00
John Wheeler
I totally agree. Some of my favorite strategies around buying devices at shows, things like that. Number one, I never buy a device that our team doesn’t demo. There’s been so many devices that my business partner, now we’ve created Alpha, but a former business partner, which he’s facial plastics and we’ve been on the showroom floor, we were like, Man, this is an amazing device.
Look at those before and afters. By the way, if you see before and afters that are incredible, know that the person that generated those before and afters was incredibly skilled on those devices. So the person that’s showing you the before and after wants you to think, Hey, I can get your team here in a two hour training. You know, it’s like that’s never the case.
Typically, it’s somebody that has an incredible command over lasers and they just know the settings inside and out with that device. Right. The other thing is, I just never buy a device that our team hasn’t demoed, and that’s a really easy way to get out of. Like the showroom floor hard pitch is, Hey, great, that sounds amazing. Let’s schedule a demo.
I’m not going to buy a device our team hasn’t used. And there’s been times where again, amazing before and afters we get the device in our hands and it’s like, man, the ergonomics. It’s weird because you and I are more business people. We’re like, The results are great, let’s buy it. I’ll tell you, with a lot of providers, if the ergonomics are bad, they’re not going to want to use the device and they’re not going to sell it because they’re like, I don’t want to put myself through that for an hour or two hours.
In some cases, treatment to get carpal tunnel or just to be uncomfortable. They will literally not sell a device because the ergonomics there’s been other times where the ergonomics are great, the before and afters are great, but it’s so painful that the provider would just never want to inflict that. A lot of our providers are nurses and they’re like, I’m not going to subject somebody to that level of pain for an hour or two. It’s just not enjoyable experience.
Jay Shorr
What it does is it kills the recurrence of a patient, even come back for other treatments in your clinic because it was such a horrific experience to begin with. Look, ergonomics is very important and having owned a practice, I will understand that because look, a doctor and a provider are technicians. A carpenter is not going to want to use a saw that doesn’t fit in his hand.
Ergonomics is very important and people don’t understand that. Now, you mentioned demo. I remember the days they would come and leave a device in your office for a week or two and you could do a half a dozen to a dozen patients and you could schedule them before the demo was ever dropped off and see whether or not you liked it and then how the treatment went.
Today, they don’t do that much anymore. There’s definitely fewer demo units out there. It can be a little bit easier if you have a handful of devices from a company where they’re like, Oh yeah, we know Jay, We know John Yeah, here we’re going to just drop this device off What I found a lot of times with that is that the team can be reluctant, especially if it’s a device that requires a series.
You know, they’re like, Why would we do the first treatment when we know we can’t provide the second, third and fourth? But yeah, I think all of this is really, really helpful for people to keep in mind. It’s just like, don’t just go out and buy a laser at the showroom floor, get it in your team’s hands. And then the other thing Jay is helping them create intrinsic motivation to want to buy the laser, right?
If it’s like, Hey, I think this device is cool, I want you guys to decide if you want it. All of your providers get together. They’re like, Yeah, this thing’s freakin awesome. We love it. It’s like, Well, all right, if you guys want to buy it, let’s buy it. And then they have a lot more skin in the game and they’re going to put themselves out there to make sure it’s a success because they feel like they made the decision versus this dude just showed up with a frickin device that we didn’t even really want. Whatever.
Jay Shorr
Yeah, they come in your door, riding it in the elevator, the steps right to your front door, and you never even called them. I do have a really big comment. Now, here’s another non-sexy part of, now you bought the device and everybody’s happy and it comes time to pay for it. The salesperson says, I have a great financing idea for you.
Let’s buy this device and I can get it for you. No payments for six months or $99 a month for six months, and it’s a $200,000 laser and you’re borrowing money from an entity. I’m not going to name any entities and you’re borrowing $200,000 for six months and you’re paying $99 a month. Where do you think that deferred interest is going.
John Just hit it. The interest starts today and it might be five 600 a month, if not more, especially today on that 181st day, that $180,000 or $200,000 laser that you bought is now $210,000 because you’ve deferred the interest and tacked it on to the back end and you didn’t know that. So I ask for either an amortization schedule or a deferred payment schedule and can I buy it down without penalty?
And most people are going to say yes after six months or after one year. Why? Because the scale the economy, scale of loans is interest here, principle here, and then it goes like this over time.
00:43:51:01 – 00:46:02:09
John Wheeler
I just want to add even one more thing to as CEO of Alpha Esthetics Partners, and we’re acquiring practices all over the country.
My deepest regret is that I bought too many lasers. It really is, because when we’re acquiring new partners, it’s a cash free, debt free acquisition. And so the partner that we’re acquiring has to pay off all of their debts from all of the lasers that they bought. When I went through this process, my partner and I, we had over two and a half million dollars in lasers that we had to pay that came out of the purchase price right.
And so it’s a little bit tricky because part of the strategy for a lot of people that by so many lasers is I want to neutralize my tax bill. But while that’s good, if you intend on selling your practice at any point in the near future, that’s going to come back to haunt you in the form of all these lasers that you don’t really need coming out of your purchase price.
Jay shorr
Absolutely. And depending upon how your accountant may have depreciated it to save money on taxes, you may be stuck with a huge debt.
John Wheeler
Exactly. Well, Jay, this was a delightful conversation. I mean, again, my page is just beyond full with notes. This was incredibly enlightening and I really appreciate your time. Thank you for being a great friend. And I look forward to a great summer of a lot of speaking engagements together.
If you can just end by telling people where can they find you both online and also in person, this summer.
Jay shorr
Okay, So you can find us at Shorr Solutions at Shorr Solutions: The Podcast, at Shorr Solutions: The Webinar on wherever you do podcasts and webinars, you can find us at our website www.shorrsolutions.com, plural because we have more than one solution.
And you can find me at Vegas Cosmetic Surgery show. You’ll find me at The Aesthetic Show, you’ll find me at the Multispecialty Conference in San Diego, the Facial Plastic Conference, the American IV Association Conference, IMCAS in Cartagena, Colombia. And just go on to our Website, look at resources, upcoming events, and that’s where you’ll find me. And it would be my pleasure to speak with you.
If you have any questions, I’ll be more than happy to answer them for you. Well, thanks for coming on the pod, Jay and we’ll see you soon. And thanks again for all the wisdom.
00:46:02:09 – 00:47:44:20
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