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Technology Buyer Beware
By: Carol and Rob Trow
Posted: September 25, 2009, from the October 2009 issue of Skin Inc. magazine.
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The first generation of devices to reach the market can be very costly and usually require tweaking in subsequent models. Prices often fall dramatically after the first few years, and what is hot today may well prove to be cold all too soon. Despite clinical studies and U.S. Food and Drug Administration approvals, the long-term efficacies of many treatment devices have fallen short of the hype that accompanied their launches.
There also is a natural dichotomy in the spa profession. Many have chosen a career in professional skin care for reasons other than financial, as being a business owner and skin care professional can prove difficult. But before you make any decisions about bringing something new into your practice, you must remind yourself that you are running a business. Unfortunately, however, it ultimately is about money, revenue and profits—the proverbial bottom line—and if you don’t generate a profit, no matter what technology you bring in or how wonderful it is, you will not be able to survive for long. You need to make sure the technology pays for itself.
Carefully evaluate how a new technology will make money. Be clear on how much the techology will cost to bring in, the staff training required, your clientele’s receptiveness, the competition, the pricing of services and how the money invested will reap rewards. Think about all the costs associated with bringing in new technology in both direct ways—such as the actual cost for the item—and indirect ways—such as time, training, space and installation requirements—as well as the potential need for new menus, printed materials, infrastructure improvements, marketing and launch expenses.
Know your needs
Don’t get caught up in the hype. Think again about how a particular device or technology will improve the services you already offer and what impact it could have on client retention, increased visits and professional treatment costs—for example, total cost per treatment versus what can be charged to your specific client base—as well as how it affects your staff income and incentives, and how it compares to what is currently offered by you and your competition. See Technological Knowledge for a full list of considerations.
Make sure you are aware of the capital cost, monthly carrying charges, disposable items per treatment and how many treatments can be realistically performed each month. Also consider what can be charged for the treatments and what your break-even point is. Look to others who have this or similar devices to see what prices the market can sustain in light of your region and the economics of your practice.