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- [00:00]
Eugene Shotsman
Foreign. Welcome to the Power Hour, Optometry's biggest and longest running show. I'm your host, Eugene Shotsman, and today we've got a great show for you. Over the last few years, I've watched a lot of optometric practice owners venture into aesthetics. They get an IPL or RF device for something for dry eye, and they kind of realize that it can have some additional benefits. And then they start dabbling with aesthetics and most of them just kind of stay dabbling with it and it doesn't really, really turn into a business. But today's episode is about someone who made it into a real business and did aesthetics right. My guest is Dr. Amanda Barker, and she has taken what became an adjacent opportunity inside her very successful optometry practice. And she's built it into a completely separate business, generating over a million dollars per year with significant room to grow. And this is not about casually adding a couple laser treatments to the schedule where there happens to be an opening. Amanda has actually taken what and she tells you what the finished product really looks like and created a real business.
- [01:10]
Eugene Shotsman (Host Announcer)
It's a separate location.
- [01:12]
Eugene Shotsman
It's got licensed providers, multiple treatment rooms, consultative sales process, carefully layered technology, production goals, patient retention systems, and a long term plan for each patient. And all of this didn't come overnight.
- [01:24]
Eugene Shotsman (Host Announcer)
Right.
- [01:24]
Eugene Shotsman
So she tells you her journey of starting an adjacent business because she bought an RF and an IPL device, starting an adjacent business kind of inside of her optometric practice, and then this year, eight years later, graduating into a separate location because it was so successful. So we talk about all kinds of things, including what it cost to do some of the stuff, some of the mistakes that she made early, the things that she learned, and some of the things you should be skeptical about that are going on in the industry. And then we also talk about some numbers, like what's a properly equipped treatment room, how much can it generate per day? And she gives some really, really interesting numbers. So on the other side of the economics, we talk what her patients spend, what can margins look like, how does she evaluate each device before purchasing it? Where's the real opportunity? Because it's not a single procedure. It's building a multi year patient journey. And how does she do that? So can you be an optometrist who builds a multimillion dollar aesthetics practice? Absolutely. But as Amanda makes it very, very clear, you have to treat it like a real business. And she talks us through exactly what she does.
- [02:34]
Eugene Shotsman (Host Announcer)
As always, make sure that you're subscribed
- [02:36]
Eugene Shotsman
on YouTube, Spotify, Apple, podcasts, or wherever you listen. And if you have questions, ideas, feedback, please reach out to me directly@eugene shotsman.com and I'd love to hear your feedback on the I Care Boss book, now available on Amazon. And now, here's today's power hour with Dr. Amanda Barker. All right, Dr. Amanda Barker, welcome to the Power Hour. So excited to have you on the show.
- [02:56]
Dr. Amanda Barker
I'm excited to be here. Thanks for inviting me.
- [02:59]
Eugene Shotsman
Yeah. So give everybody a little bit of background on your practice and your journey as an eye care provider.
- [03:08]
Dr. Amanda Barker
Yeah, sure. So my husband is also an OD and we opened our first practice in 04. So we've, we've had that practice for quite some time and it is now operationally three doctors a day in the Charlotte area. We have two other locations, a fully VT location, and then a second primary care location. At this point point, we have seven doctors and our primary location generates about five and a half to six million a year. So three locations currently in the Charlotte area.
- [03:47]
Eugene Shotsman (Host Announcer)
Yeah.
- [03:48]
Eugene Shotsman
And the fourth one that you're not really talking about is the, is the topic of the show today, which is aesthetics. And the reason I wanted to talk with you about it is that I've been, I've had kind of a front row seat to your aesthetics journey from the very beginning when you were like, I think I might want to do this. And as we've known each other over the years, I've watched you go through different phases of growth and sideline and growth and sideline. And I find that aesthetics is an interesting enough topic to a lot of people because it feels so nicely adjacent. Right. Everybody who buys an IPL is definitely asking themselves the question of, well, should I be like, offering esthetics and should I be like, you know, marketing something from an aesthetic standpoint to my patients? And I don't know if that's exactly how you got started, so maybe we'll start there. Is what made you decide and kind of what, what was the thing that tipped you in the direction of you want to offer aesthetic services to your patients?
- [04:59]
Dr. Amanda Barker
Sure. So, like probably many other ODs across the country, I learned about the alternative dry eye solutions or treatments back in maybe around 2015, 2016. At that point, we were utilizing drops and plugs and restasis and whatever we had on the market. And then of course, radio frequency and IPL started to emerge as an alternative. And we initially bought the temperature envy radio frequency device for dry eye because that was really one of the only things that was available at that point in time. And Started to utilize that for our dry eye treatments. That quickly led to acquiring an ipl. We started to learn through different opportunities for training across the country, how to utilize those together. And that just became part of our, what we call dry eye spa within the practice. And then naturally, having the devices, I started to research what they would. How they would perform, what treatments they were used for in other industries. Of course, aesthetics was where they were originally used. So I quickly, of course, wanted to figure out how I can use those. And that journey is what kind of led me more down the path of aesthetics. It's a very different path than just dry eye. So I started to do research to see how to use those devices specifically. And that. That really started me on a journey in around 2016.
- [06:34]
Eugene Shotsman
So was it the. What was the thing that made you decide, okay, I'm going to offer this service? Was it that you tried it with a few patients and you got really good results, or was it that you were just like, hey, I think I can build a real business around this, and I already have the tools. Like, what's the. What was the biggest motivating factor for you?
- [06:57]
Dr. Amanda Barker
And you're specifically asking about esthetics or dry eye aesthetics? Aesthetics, yeah, for sure. Well, so what I. It was a little more of a rocky path in the beginning, because what I learned quickly was the devices would perform treatments that would fall outside in certain states of my licensure as an od. So while I wanted to offer these treatments and I started to go to trainings to learn how to do these treatments and how they would work in the outcomes, I also learned, you know, what we're regulated with in our state and specifically on how I could run the devices. So it kind of diverted into a parallel path of learning what the devices would do and seeing that and loving it and wanting them myself and wanting to be able to offer them, and then also understanding the. The boards, the licensure, the laws within each individual state in mind in particular, and how that would work. So it took a little time to work through.
- [08:00]
Eugene Shotsman
So what were the barriers that you ran up against? It is like your. What are you specifically in your. In your state, what are you specifically allowed and not allowed to do? And also, what did you want to do?
- [08:16]
Dr. Amanda Barker
Well, I wanted to do everything that the devices would allow me to do. But because I was intrigued, I thought it was fun. I saw a demand for it within my community and beyond. So that was something that I was really interested in, what I learned. And I think this is going to vary across every state is that within my state in particular, under my licensure and regulation by my board, I was allowed to do certain treatments that were linked directly to diagnosis codes within my profession. So I quickly found that the structure within my primary care practice was not going to allow me to do aesthetic treatments that's not managed by our board. And I'm not licensed to carry out those treatments beyond the I and Adnexa. So that led me on a, on a different path to figuring out, you know, how I could be a part of something bigger and different. That, and I don't personally run any of the devices or offer any of the services. That was never my goal with the aesthetic practice.
- [09:27]
Eugene Shotsman
So it's fair to say that you're one of the, that, that your, your entire approach to your businesses has always been business minded. And what I mean by that is that you're never looking to just sell more of your time to patients. You've always been trying to figure out, how do I turn this into a business that grows and scales and I don't have to do all the procedures myself, which I think is really wise. So what did you. So let's just talk about this journey. So once you figured out that you had some regulatory issues you had to get around, what did you do? How, what, what was the next step?
- [10:09]
Dr. Amanda Barker
So I, after seeking out, you know, legal advice and developing a structure for the practice, then I, as you said, it was never my desire to be in the clinic running the devices and doing the treatments. That just was not the path that I was on. I love the business side of things and the entrepreneurial side. Not that I don't love patient care. I do, but. So I immediately started to hire great providers to offer the services and that included licensed estheticians with a history of certifications and training in the procedures that we wanted to do, along with nurse practitioners that would continue to expand, to be honest, but we slowly started to add injectables and other devices that would be delegated accordingly to the licensure of the individual. So we've had RNs, nurse practitioners, licensed estheticians and medical assistants within the medical spa or aesthetics.
- [11:13]
Eugene Shotsman
Got it. And it was like. So I think it sounds like first part was you had to open a separate business, the med spa.
- [11:20]
Dr. Amanda Barker
I did.
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Eugene Shotsman
Right. So then the med spa in itself was separate from your eye care clinic. And physically. We'll talk about cross marketing in a second. But then you started employing people part time. Are they all part timers? Are they full time?
- [11:40]
Dr. Amanda Barker
So that's that's a great question. So we started this And I think 2018 is when we officially started down the path of having a separate business structure altogether. And so over that time I have one full time at this point I, I should move back to say, you know, originally it was carved out as a sublet portion of my eye care clinic. And so we were limited by space and, and some operational constraints within that setting. So only within the last year have we moved out into a location where we can really expand. But I currently have one, only one full time licensed esthetician. And then soon I will have nurse practitioners every day of the week. We've had had coverage with a nurse practitioner three days a week at this point and we just have slowly grown as the business has grown. So.
- [12:34]
Eugene Shotsman
Got it. So when you started, when you decided to jump into this, like, hey, both feet, I'm running. Okay, so that motivator, it sounds like there were three maybe things and I want you to talk about each of them. One was the business opportunity.
- [12:54]
Dr. Amanda Barker
Yes.
- [12:55]
Eugene Shotsman
One, it sounds like was just the availability of the devices. Like you had already made the investment. Let's use the, you know, let's use the technology you just spent a ton of money on to, to its fullest potential. And one might have been patient feedback and patient efficacy. So talk about all three of those. Like, what did you see as the business opportunity? I mean, obviously you had some devices, but what else did you have to buy in order to open a med spa? Or what did you have to add? And number three is like what was, what were the patient feedback points early on that like encouraged you to keep going? And you were like, oh yeah, this, this is, this is good, this is a good idea.
- [13:34]
Dr. Amanda Barker
Okay, I think I'll remember all three. I'm going to start backwards. The patient feedback has always been a real driver. In fact, we're doing that now. We are now adding hormone replacement therapy and weight optimization within our spa because of patient feedback along with more innovative technologies. So that, that's always been something that we've used to know what's the next thing to buy and what's, how is the next way to, to grow. Then the, the second, I guess point is also just being able to invest in great providers that understand and in my case, I want people who want to grow within the practice. They want to develop their own areas of focus and develop a patient base. And that was, that's really important for the model that I'm building. So in the beginning, one thing I guess to be aware of is that it is not an inexpensive journey to take this route. And there's a million different reps and million different companies. And I think if I were to go back and start again, I would start to research what is esthetics, understand all the layers of the skin, understand where each item treats, and really build a portfolio of what exactly I want. Because I kind of just was making decisions more from an OD dry eye standpoint in the beginning. And I would have made some different decisions now if I had known where I was going to end up. I don't know if that answered the
- [15:05]
Eugene Shotsman
first question, for example. Actually, that's a really good. That's a really good point that I want to zoom in on. So what are some examples of things that, knowing what you know now, what, eight years later, what are some things that you would have definitely done from the beginning that you didn't?
- [15:27]
Dr. Amanda Barker
Yes. So for aesthetics, what I would have done from the beginning is I would have probably purchased devices to layer together. Only a couple devices to layer together to get a more immediate outcome aesthetically with a patient. When you layer those together along with injectables, I would talk about like micro
- [15:56]
Eugene Shotsman
needling or like, what are you talking about?
- [15:58]
Dr. Amanda Barker
So, you know, I over. Over the path or the this journey. What I've learned is, you know, there's no one device that does every single thing. And patients come in and they want all sorts of different things. And of course they want what's the best thing to do at all. There's nothing that does it all. Injectables do one thing, you know, tox addresses your wrinkles. It doesn't do anything to pores or skin texture or tightening or lifting. And microneedling is deeper. And if it's with radio frequency, it's one, you know, outcome. If it's just microneedling, it's different and it targets a different layer of the skin. It's really fascinating. So, you know, you could be micro needling and you'll get certain results. It's not going to stop the wrinkles and it's not going to resurface your skin to make the skin look beautiful. It will to some degree. So, so what I would have educated myself better on from the beginning is understanding what each of the devices do in what layers and what the the outcomes are to buy smarter, to overlap those two to get the outcomes you want. Because the outcomes is what drives the patient, you know, are in our OD practice or our regular eye practice, the number one way that we've grown for 20 years is word of mouth. Right. People come, they have an experience and they refer other people. Well, the number one way to grow in aesthetics is that people tell people why their skin looks so good and so you want them to leave and get an somewhat of an instant result as quickly as you can. So micro needling, just to give you a sense of that, the radio frequency micro needling, it takes up to two to three months after a series of those to get the full effects. And they're beautiful. But people want something now. So I've learned that now if you layer that with something else pretty quickly they're going to get some instant gratification and they're going to get the full results over time.
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Eugene Shotsman
I would have just what's the, what's the thing that you give them for now?
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Dr. Amanda Barker
Well, now I think doing something that addresses the, the surface and the texture and the more of a either a non ablative or ablative more surface treatment, whether that depending on the practice in the state and who you have working within your practices. I think anything from doing some pills all the way up to CO2 lasers, those give people some more instant results with how the skin looks. And then of course tox toxins give you, you know, reduction in wrinkles really quickly. So those two things give people that, oh, in a few days I'm a few days to a week, I'm seeing some serious results. And then buys you some time on the deeper treatments that take longer to get the results but are really beautiful natural results or natural looking results. And that's another thing that I think you didn't ask. But aligning your aesthetics clinic with like what is the outcome you're going for? And ours has been a very natural anti aging approach. Like what can we do? Our hope is that people come in and they leave and they feel great and no one really knows they, they came because it's a really natural result as people, you know, in the journey over time.
- [19:18]
Eugene Shotsman
Yeah. So Amanda, as you're, as you were saying, I think, you know, I'm sure some listeners are trying to do the math.
- [19:27]
Dr. Amanda Barker
Yeah.
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Eugene Shotsman
So in terms of, in addition to the RFIPL stuff that you had for dry eye.
- [19:35]
Dr. Amanda Barker
Correct.
- [19:36]
Eugene Shotsman
What did you buy or how much did you spend? Let's just say how I brought ballpark. How much did you spend on other stuff, equipment or technology for your med spa in order to be able to offer this full service experience that you're describing?
- [19:53]
Dr. Amanda Barker
Well, to this point, and this is over a period of time, like adding one device at a time and rolling out the services. I'm, I've probably spent 800 to a million. I mean, it's not, it's not a, it's not a small investment.
- [20:11]
Eugene Shotsman
But we're going to talk about your revenue in a second. I just want people to realize what it means to have like a serious med spa business that's in line, that's side by side. But this is over eight years that you've spent this. And I think, you know, when we get to revenues and patient volume, we'll. Yeah, we'll probably. People realize that. What I know about you is that you're a very smart business person. So I don't think you would have spent that money if that wasn't coming back to you tenfold.
- [20:41]
Dr. Amanda Barker
Right.
- [20:42]
Eugene Shotsman
So let's talk about before, before we get to all the economics of all this stuff. I want to talk about how you like again, you started this med spa. It is separate from your, from your eye care practice. And of course at this point you've got now like an employee of that thing. So the meter is running. Right. So what did you do to get your first sort of batch of patients for the med spa?
- [21:17]
Dr. Amanda Barker
Well, I was fortunate enough to start off the med spa as a small business within a business. So because we carved out Originally back in 20, 2018, we carved out an area within our clinic for the spa. It was a really a natural option for people to kind of migrate over to see what we're doing next. And so we had that foot traffic while we were within the practice in the past. And that was valuable because we could market to those patients originally. We are completely separated now in a freestanding building. But at that point, people were interested. They were coming in for their eye care. It was natural as they walked by to see, well, what are you doing? And at that point we did our dry eye treatments within the area, the same area. So that was a great way to get started. And naturally, people that were already coming to see us as we moved came to see us there. And then we have continued to do separate marketing efforts as more devices have come on. And it's just like with any other business though, there's a, there's a learning curve and there is a ramp up period. Obviously there was also a ramp up. To my knowledge, having been in the eye care industry for so long, there were some things that crossed over and were really similar. But I had to learn a tremendous amount about the technologies, what they do, why we would use them. And I started at a, with really? Zero knowledge.
- [22:56]
Eugene Shotsman
Yeah. So I think one of the questions I have, you know, from as you're thinking about, like, okay, I'm, I'm. I'm recruiting patients from my eye care practice is like, how do you explain this? How do you. What are the. How do you make the patient understand there's a link between their eye doctor and now some sort of aesthetic service component?
- [23:20]
Dr. Amanda Barker
Right. Well, I mean, that's a, That's a great question. So I think that there's lots of people, men and women, that are already looking and researching for these treatments. It's not like they aren't. And I think that if you are already within an industry and you have a reputation for providing a great service, it. They're interested in hearing what you're doing and why. And our story was exactly what I told. We, we bought these devices, they are treating dry eye, and they do all these other things which we started to learn about and love. So now we're just expanding those services to our patients. And we really, in the beginning, only expanded them to our internal patients because of, because of where our learning curve was. I would, you know, as a. Where I am now in the profession. And I look back at that, I think, well, I mean, I could have been much more aggressive with marketing. I could have probably learned faster, but I was doing so many things. I don't know that that's the right path for everybody. But for me, I wanted to have a good grasp. So we started slow and built our confidence. I got great providers, and we've just taken one step at a time.
- [24:30]
Eugene Shotsman
And so it sounds like you were pretty honest with your patients. To say it's almost like, and I don't know, I'm not putting words in your mouth. I also don't remember this exact marketing campaign. But, but I believe you were pretty transparent with patients in saying, we've discovered that our dry eye, that the devices that deliver a lot of value for our dry eye patients also have this convenient side effect of aesthetic treatment. So we're expanding into aesthetic services and we're looking for patients to test out some of these devices. And initially, did you do it at a low rate to get the reps and to get the, and to get the goodwill, or did you set like. I, I know the industry, I, I know this for a fact. Like, all the reps want you to set the highest price up front because they don't want to be the, you know, they basically want certain market prices for certain procedures. But what was your approach in the beginning?
- [25:33]
Dr. Amanda Barker
So we did several different things. And we had some evening community events where we invited. We invited patients along with some marketing in the community where we would have people come in for an evening and we would run the devices on models so patients could see like, this is how it feels. This is what we're doing. This is what the expected outcomes are. And we just did educational events and then offered VIP pricing. Right. So you're right. You want, you don't want to. You don't want to cut off your nose despite your face and start really low on your fees. In fact, I wouldn't even at this point encourage that. I would encourage to set them what the, you know, where they should be, and then offer packages, offer VIP pricing and certain deals to people who adopt early. And because as you know, just like in the eye care world, if you, if you start with your prices too low, it's really hard to, to justify why you're increasing them. If you start with the prices where they should be and offer package deals or combo deals and that sort of thing, it's a much better way to go, in my opinion. But we did all sorts of things like that, and we just organically grew. I mean, people know I hired a licensed esthetician and she did everything within her licensure at that point. I got a salon originally. I got a salon certification, and she did, you know, all the things that she could do. And so people wanted facials and hydrafacials and all those sorts of things. And then we started to just get more serious and add more serious treatments. And by serious, I mean getting to a point to bring on an injectable in nurse practitioner. And that was a game changer for us. I think that's just a key piece for growing if you're moving in that direction.
- [27:26]
Eugene Shotsman
Yeah. Amanda, right now, when somebody walks into or when somebody comes into your aesthetics practice, what is the experience like that just describe what you've built, because I know you just recently built out like a separate location for it. So describe what you've built, describe the experience, and then also describe, like, what your sales process is like, how do you guys do it? Because. And one of the things I want to point out for the audience is that when you're moving from eye care, and this is my experience as a marketer, when you're moving from eye care to aesthetics, a lot of patients. So the most common keyword in the eye care industry is eye doctor, eye doctor, optometrists, you know, that kind of thing. Right. The most common keyword in the aesthetics industry, which oftentimes also represents a patient's lack of awareness about, you know, everything that they need is Botox. Botox, near me is some sort of injector, the name of an injectable that people think they need. And they're, they're like hard unit shopping. They're like hard price shopping. When they call you, they say, what is the price for a unit of Botox? And the med spa that sucks is going to be like, it is, whatever it is, $14. And you know, you. And we'd be happy to see you next Tuesday. Right. Versus somebody who is, who's really educated at sales will do something different. So I want to hear your approach and what you guys have learned over the years as, as you talk about the experience. So like, start with the experience and the practice that you've built out. And really I want the audience to kind of picture if you're going to get serious about this business, this is the outcome that you're really looking for. At least, you know, whatever. Eight steps in.
- [29:30]
Dr. Amanda Barker
Okay, well, I should probably add a disclaimer that I am still developing that journey and I'm still learning every day, which I think is part of the key, right? Like to learn, learn as you go and make changes to get better. I think the first few things that I would encourage people to do is just think long term about what the face of the practice looks like and who is the patient base that you're going after. And for me that was really easy because I used a similar philosophy to our practice, which I think worked well for us and was successful for us. And that meant developing a relationship with patients over their lifetime and it being a patient journey with us, not today selling you the most expensive pair of glasses that, that you know, or making the sale necessarily today it was developing relationships and hoping that I would see people grow old with us and their children and so on and that and doing what is right and, and offering a high level service and product. So I just took that philosophy and replicated it in the spa and that's working well for us. So we're not competing with Groupon for talks. We're developing a patient journey. So when you come into the practice, you do a consultation and what's called a good faith exam. And that means we're evaluating what your goals are and also educating you on what we have to offer. And then in conjunction with your goals, developing a patient journey or a plan, utilizing all the devices. Because remember, IPL is amazing and it'll do an amazing thing, but it just does one or two things. And so really understanding what you hear the patient saying and trying to meet their goals by developing a plan. So that's been a really key part of us, the aesthetic consultation, developing a patient journey, helping them to get to their first goal, but also realizing like, the aging process continues on. And so you're not going to come in and get three micro needlings and look 20, if that's your goal. Really, you know, it's unrealistic. I. I think we don't say it, of course, in that way, but the fact is we're developing consultative plans and educating our patients and then starting from there. And usually that includes doing more than just talks.
- [31:58]
Eugene Shotsman
Yeah, so what that. And again, I think this is such a wise approach. I think it is a fool's errand to think that you have an optometry practice and then adjacent you can just be like, well, listen, you know, three treatments of IPL and on your skin are going to cost this much money. You know, you can sign up over there if you like. Right. Rather than that, you're saying, let's treat it as a separate business. Let's give it its own sales process, let's give it its own sort of, you know, experience and feel. And I imagine it's very spa like when you walk in and at the same time, you're probably still doing a bunch of cross marketing to your eye care patients in order to get them there. So have you ever, I mean, I heard you say you did the community nights to you know, to essentially like, here's hey, eye care patients, we got this cool thing, come in, check it out, test it out, whatever. Like, what's your best source of patience right now outside of referrals? And are you still utilizing your eye care list, so to speak, to drive patients into the spa, or has it gone beyond that?
- [33:15]
Dr. Amanda Barker
So it's going beyond that now because we really completely separated the practices. So, you know, with the way that you market and the newsletters and blogs and all the things that we're doing within the spa, unless somebody elects to be to get all of that, we don't. We no longer mix those two patient bases, although we're very close and people know who we are. So they naturally know that in the aesthetics, I'm involved there and I'm an eye doctor, but there's lots of other people involved there too. So we now are marketing in different ways. And obviously online tools are drive the most, I guess, referrals, making sure people are searching so understanding what people are searching for is, I think, a key component. And then word of mouth, like the people that come in that are happy, they refer their friends. That's still the number one referral source for us at this point.
- [34:17]
Eugene Shotsman
Do you guys have membership plans?
- [34:20]
Dr. Amanda Barker
We have. We are in the process of developing it. We've not been as successful with that, but yes, we do. And we're really launching that in the fall with our new hormone replacement therapy programs and weight optimization programs. So I think that'll be a natural blend. I've been partly a slower adopter to that. I think it'll be very successful. But because it's something again, new to me, I probably have adopted that slower than I should have.
- [34:47]
Eugene Shotsman
Okay, after the break, we're gonna jump into the economics of this. I want to know what patients spend. I want to know what this thing makes you and whether it's really worth the investment as our listeners are sitting here and thinking. And do I want to get serious about aesthetics? We'll be right back on the Power Hour.
- [35:04]
Eugene Shotsman (Host Announcer)
Hey there, it's Eugene and I want to let you in on something. So you've been to conferences before. You come home fired up and then Monday morning hits and it's back to the grind. The ideas don't stick, the plan never gets made, and six months later your practice is in the same place. So I know that pain. I've been to those conferences with you and that is not happening. At this new event called I Care Boss Live. You've heard the story of iCare, boss, and now there's an event, I Care Boss Live. It's September 16th through 18th in Cleveland. Two and a half days. We're bringing together 200 of the best practice owners in ICARE for a one of a kind event that combines speakers, peer learning, mastermind groups and industry innovation, all designed around one goal. You leave with a 90 day plan and you can actually execute it and get stuff done. And we're going to tackle some real stuff. Exam only rates, revenue per patient, people, problems, leadership, AI and technology, specialty growth, the things that keep people up at night. We're going after it and we're doing it in a room full of practice owners that are just as serious about
- [36:11]
Eugene Shotsman
growth as you are.
- [36:12]
Eugene Shotsman (Host Announcer)
This is not a conference, it's not a seminar. It's something different. There are only 200 spots, so if you want to be in on this, this is not publicly announced, just on this podcast. Go to the powerpractice.com click events. Click apply now. This is invite only it's not for everybody. So you have to apply. We'll ask you a few questions and if it's a fit, we'll invite you to register this event. I care Boss Live is going to sell out. Do not sit on it. I invite you to apply right now.
- [36:42]
Eugene Shotsman
Hi, we're back on the Power hour. I've got Dr. Amanda Barker with me and we are talking now the economics of opening an aesthetics practice and doing it right. And what was born out of an adjacency to your. To your optometric care practice is now a standalone business. Let's start at the punchline right now and then work backwards. So what's total revenue? What are you on track for this year?
- [37:12]
Dr. Amanda Barker
So for this year, we're on track for somewhere between 1 million and 1.2 too.
- [37:18]
Eugene Shotsman
That's great. Congratulations. That's so awesome. And like, now let's dissect that a little bit. What is your. And I, I don't know how you so in I care, revenue per patient is like, it's a little bit easier to, to measure because so much of that revenue oftentimes happens in a single transaction and a smaller percent of patients are coming back and back and back again, unless you really are running a specialty practice. So I don't know if I would say revenue per patient or maybe I would say revenue per patient per year is like, is a. How do you measure that?
- [37:58]
Dr. Amanda Barker
Well, I mean, I think that's. That's a great question. And I am such a numbers person, so I think you could dissect it a lot of different ways. I think if you start with just general KPIs, you can think about it in a really similar fashion to a regular eye care practice. I mean, you're going to break down your overall revenue and I guess budgeting into similar buckets. You know, you have your overhead, you have your cost of goods, you have your staff, and of course you're always looking for your EBITDA or your profit, I guess is what you'll call it. So I use very similar budgeting goals in the Med Spa, meaning, you know, staffing is 20 to 25%, cost of goods is higher, but you have to remember that there's no insurance. So like, typically what you charge is what you get. You don't take a loss of, you know, 20 or 25% on, on fees and that sort of thing. So there's definitely some differences. But I follow a real similar structure that I followed in the eye care practice with where I feel like different expenses should line up.
- [39:09]
Eugene Shotsman
And this is the goods thing, which is like. I want to pause on that because you brought that up for a second. Like I imagine that there is a high cost of goods for the consumables that everybody knows, you know, Botox filler, that kind of stuff, or toxin filler, I shouldn't say Botox toxin filler. And then there is really low cost of goods, I imagine, on like machines. Right on, on procedures, lasers and, and such. And so I am curious, like, how do you balance that? Because I think toxin filler is like, it's kind of expensive to operate and I've, I've heard practices lose money on toxin filler just so that they can make money on the, on the machines.
- [39:59]
Dr. Amanda Barker
Yes, for sure. And we could speak an hour just on this topic actually, Eugene, but. Well, the first thing to know is that there's, you know, a significant upfront cost which, knowing what you want and understanding what you want and what you want to offer up front is super important. And arming yourself with that information because every single rep, with every single company will come in and tell you that if you buy this device and you roll it in, you're going to make a half a million dollars. And so you've got to have the wisdom and understanding that there's far more that goes into it than just rolling the device into your clinic. Which means you must have very knowledgeable providers who know how to use the product and get good results. And that's another piece that was very foreign to me in the beginning. So I've gone through training with all of my staff, our staff. I've done all the trainings that they do, just so I understand and I can develop marketing plans around them. To your point, I think that it goes back to a philosophy for your business. I, the devices, although have a lower consumable cost, have a much higher upfront cost. So if you're having to finance them, you have to keep that in mind. So there's a cost to turning that device on. There's also a cost if you're turning the device on and you don't have a well trained person with great outcomes because then you start to lose, you know, the momentum of utilizing that device over and over again. I tend to not follow the whole take a loss on injectables. The injectables drive our business. So I want good results and you know, a cycle of that patient coming in and they're happy with their results because they're only going to last for so long. Know that Botox is going to last on average three to four months. So having someone that understands, is well trained, knows how many units to dose and like, we don't necessarily apologize for our pricing. Some people will go and shop. But that's not really the patient base that we're going after because we want them to cross between all of our practitioners. We want the, the tox patients to also be, be getting pills because that just improves their overall outcome and it goes back to the consultation and developing a plan. So then when you were asking me about per patient revenue, I think you can think about it in two different ways. You can look at who are your VIP patients over a span of a year, the people that are on a journey to just continue aging naturally and utilizing the devices at, with what fits into their lifestyle and budget. But we do go as far as, with every provider breaking down your time in your room. Like, what is your goal? If you're an esthetician, you're an rn, you're an np. Obviously they all have different delegations, can do different things. But we look at like, what is the, what is the maximum production per hour based on, you know, where we want to be as a business and where you want to be as a provider? Because they're their, you know, their pay is driven by production. Also they, they have base pays, but they want to be successful and they want to give great treatments, great results and also make money. So we look at hourly, like this room should be generating this amount of revenue per hour based on the provider that's in it today. And that's what we're always looking at. So everyone has, you know, an hourly goal of production based on how they schedule their patients in a daily goal. And then we kind of, you know, extrapolate that out over weeks, months in the year.
- [43:50]
Eugene Shotsman
Yeah. What I love about this is that you almost made like a, almost like an eye care template, but scheduling template for, for, for your esthetic side. So you're treating that not as like a rando. How many patients can, you know, come in, what time? You're trying to, you're trying to stack the procedures in a, in a smart way and maximize revenue per revenue per hour. So let's talk about some of those revenues. So what do you expect your room to make or a particular room to make in a day for you under various circumstances? Just give me some of those numbers.
- [44:27]
Eugene Shotsman (Host Announcer)
Sure.
- [44:28]
Dr. Amanda Barker
So we look at the, the overall potential that I think is completely realistic is that one properly upfit room, depending on how, you know, what Your goals are in that room could easily generate 4,000 a day. And that's, I think, conservative if you have the right treatments and the right staff and you have the right business philosophy. So, you know, if you want to call it 4,000 in a day, that would be, you know, a goal. I think they can generate far more than that if they're good at what they do and they have the right devices and the, and the right capabilities.
- [45:09]
Eugene Shotsman
So how many rooms do you have?
- [45:10]
Dr. Amanda Barker
And we have four treatment rooms. Wow.
- [45:13]
Eugene Shotsman
Okay, so there's your upward potential.
- [45:16]
Dr. Amanda Barker
That's right.
- [45:18]
Eugene Shotsman
What's. Because for anyone keeping score, 200 days in a year, 200 working days in a year, 4,000 a day. That works out to what? 3.2 million a year. Fantastic, right?
- [45:30]
Dr. Amanda Barker
Yes.
- [45:30]
Eugene Shotsman
I think the other side of that. Let's go back to the revenue per patient question because I still feel like we need to, we need to put our, put our thoughts around what some of these numbers look like. And you have a lot of options for them. Right. So let's talk about your VIP patient. How much is your VIP patient going to spend with you in a year to accomplish their goals?
- [45:57]
Dr. Amanda Barker
Seven to ten thousand dollars.
- [45:59]
Eugene Shotsman
Okay, so that is a, so that's your seven to ten thousand dollar patient. And because they're spending some money on tox, some money on some, some money on devices. What's your EBITDA or gross margin on that patient?
- [46:14]
Dr. Amanda Barker
So a very successful SPA can be 30% and I think as an industry, and more depending on, on how it's run. And you know, obviously the more efficiently you run and the larger the size, then that affects all of that. But I think just like in the eye care world, getting into the mid-20s is a really good place for EBITDA.
- [46:41]
Eugene Shotsman
Yeah, but I think that's overall EBITDA and I was going to go there next, but you kind of. But I'm thinking like you're. So I'll compare compared to eye care. So yeah, if I have a glasses patient that comes in and spends 400, today that glasses patient, I'm going to have $133. Cost of goods, I'm going to have $200 or no, sorry, not $200. I'll have $60 or something that I'm contributing to or maybe $80 that I'm contributing to provider pay. So somewhere in the realm of, you know, 40 to 50% clear gross margin, contributing margin from that patient, that's not saying, you know, I had to pay the front desk, I had to pay the rent I had to pay whatever. Business, insurance, forget all that. Right. Just one incremental patient walks in today to fill an empty slot. I made an extra, you know, if my revenue per patient's 400 bucks, I made an extra for simple math, 200 that I put in my pocket from that.
- [47:39]
Dr. Amanda Barker
Yeah.
- [47:40]
Eugene Shotsman
So on that $10,000, $7,000 to $10,000 patient, if you got another one today and you didn't have to get more rent, you didn't have to get more staff, whatever, you obviously have to pay your staff on production. So what does that cost you to provide those services?
- [47:56]
Dr. Amanda Barker
So if you think about it that way, which is a little hard for me to fully think about because I'm thinking about so many other pieces of it and thinking about business as a whole, which is generally how I think. I mean, I think that you're making a tremendous amount more than the EBITDA of 25 to 30% on that 7 to $10,000 patient. It depends on what the combination is that they're doing and what programs they're in. So one could be over 50% of it because you're, you're, you know, combining weight optimization and running an IPL that's maybe paid for in some cases, maybe not. And then also 40 units of tox. So depending on the combination of the treatment, that can run up in 40, where your margin is 40 and 50% maybe. I would have to run all the different scenarios. It can be a very lucrative option. You obviously won't learn long term patients because you're walking through the journey with them and they're coming back and doing all the things right.
- [48:57]
Eugene Shotsman
And those are the patients that are most likely to refer. They feel like VIPs, they feel like they're at home. They tell everybody they buy packages as Christmas gifts for other people. Like those are patients that are super committed. So, and I agree with you that building rather than a price model, rather than a price first model, building the plan and then having patients commit to a plan, which probably requires a separate person to be able to do that, but having patients commit to a plan then ultimately gives you the highest, highest revenue per patient potentiality. And the best part is it's not seven, $10,000, it's seven to $10,000 per year.
- [49:38]
Dr. Amanda Barker
Correct.
- [49:39]
Eugene Shotsman
I think the. I don't know. Do you know the aesthetics industry, industry stat on how long a typical patient stays with their provider of choice?
- [49:48]
Dr. Amanda Barker
I don't know that I, it would be fascinating to know. I probably should. I, I don't, I've not seen an actual.
- [49:56]
Eugene Shotsman
I read six years ago, I was just looking somewhere somewhere around the COVID times I read that anesthetics patient is like a three point something year journey. Once they, if they like their provider, right? Like if they, if you survey them the first I think this was on the importance of surveys. If you survey them in the first six months and you like just address any need or concern or problem that they had and then if you, if you hyper survey them and you're hypersensitive to their needs and they'll stick around for three point some number of years. So that means that that one patient that you said is seven to $10,000 is really 21,000 to $30,000 on the low end of that cycle as long as you continue meeting their needs, which is really, really high value for when, when you think about like what is that? What's the roi and how do you, and how do you really build a million dollar aesthetics practice? So let's turn to a couple other points. So you, you kind of, you mentioned running it like a business and you mentioned talking like, thinking about like what, what are the metrics, what are the, you know, so you talk about how much money does the room supposed to make me, how much money is each device supposed to make me, how much money is each person supposed to make me? Talk me through other metrics that you as a data driven operator are looking at to make sure that this business is moving in the right direction. And, and maybe maybe take me back four or five years when you were kind of on the cusp. Like right now you've obviously created a very successful aesthetics business. But at some point it was like, I don't know, this thing maybe break even, maybe not so break even. Maybe like some months of doing well, some months it's losing money, some months it's making good money. Like what, what are the things that you're looking at when you're on the cusp to determine to like kind of steer the ship as an entrepreneur?
- [51:55]
Dr. Amanda Barker
Okay. So again years ago I was on a learning curve myself. So it was like fly by the seat of your pants a little bit. Unfortunately, that's embarrassing to say. It's just true. So I, you know, one thing about I doctors who are running businesses is that you, you get a business degree running an optometric practice. So you have a lot of knowledge that can be picked up and put into any business model, which is, is fun. You we have more understanding of businesses P Ls Cost of goods than so many other People because we're running a medical space and a retail space in one. So I simply picked up the knowledge that I had for my care and then kind of set that down inside the med spa space. Since then, I use a lot of similar philosophies but track things a little differently. And every month I'm adding things. So we, you know, again, when we were talking about numbers, it was running through my mind, you know, numbers are important and generating that revenue is important. But so many things have to go into place foundationally to make that happen. And that's developing your team, having processes, protocols, looking at things with your teams and training your teams. And that's work. We, we all know if you own a business, that's work. It's saying the same, it's work. I'm working with all of our team on these consultations now and we sit down as a full team now monthly, I sit down with my management weekly. And we look at numbers. So we look at leads, for example, our EHR captures. If someone goes to our website and searches something and they go so far it and then don't book, it's a lead and it'll show us what they looked for. And then we utilize those to go back to those patients and say, we saw you look for this. You know, we start to look at creative ways to how could we capture that person? Because we know that if we can capture them once, we're really pretty good at retention. But getting the new patients is, is always a work in progress. So obviously we want people to have good experiences and tell others, but we want to capture every area of interest. So we look at leads, we also run reports to see, you know, these people have not come in in over six months. What were the services that they had and you know, what could we offer them. The other big piece is, I mean even right now we're getting ready to buy another laser because I feel like we have a small gap in our services right now. And I know that once people get to a certain point in their own maintenance, we need to make sure that we've hit every gap on aesthetic treatments and then it becomes a maintenance, you know, maintenance over time. So always look, I don't think it's a one and done. Like I'm going to buy these devices and this is going to be super successful. It's going to be work. And how do you layer the devices? What are the new technologies coming out and having a strategy all the time? So we're looking at how many of certain devices are Running, what can you stack on those devices to get a better outcome? And you know what, what patient wouldn't want to have two devices run at one time at a lesser price than paying for both of those separately? So you're maximized your revenue, but you also maximized their outcome. The per patient revenue was higher, they got a better outcome and now you can see more patients at a higher dollar amount. That's what we're always looking at because I think that that's the smart way to use the space and get outcomes.
- [55:24]
Eugene Shotsman
Yeah, and I, I love that as like a little tip is that you know, if you give patients a benefit to do two things versus one at the same time, that works out to, you know, help everybody. Are there any other like, I'll call them like non obvious tips that you learned along the way that you're, that, that are strong contributors to success? Obviously you're very data driven. That's, that's great. But is there anything that you guys do in the room, is there any way that you present procedures, is there anything that you, you do for your patients that's like a, you know, make them feel special type of stuff that ultimately you think has led to your success?
- [56:08]
Dr. Amanda Barker
I think there's little things along the way that I have skilled providers that have come in from other locations and they have always have ideas for adding those special touches which you know, is an expense, but it makes the whole experience better. So we do all sorts of things like little bags of goody, you know, a sponge to take home and a sample of the products that we used on the face. So let's just say you did today, you did micro needling and IPL and we think you need a dermal reboot. They will put the dermal reboot product on and then give them, you know, whatever applicator and a small sample bottle size to take home with them. Those little touches while they add a little bit of expense, they create an experience. So I think that that's really important. I think educating and using visual aids to me is just so important that your people are knowledgeable. And I'm not saying that mine are all perfectly knowledgeable. Nor am, am I. We're always on a learning curve. And I'm always thinking of like, you know, if you used every one of your devices and you showed the patients, well, the microneedling goes to this depth of the skin layer. The IPL hits this, the ablation, you know, the ablative technology hits here in their minds they see, oh, that's why I Can't accept expect talks to make my skin look like Susie's at wherever I am. Well, no, and that's, I think that's an ongoing piece of educating our teams and educating our patients. And then we do little things like we have dark chocolates with our logo on them at checkout, so they all get like a little square of dark chocolate. We have occasionally some events. We're always trying to do just little things that will make the experience more memorable and more personalized. So that's always a work in progress. I'm not perfect at it yet, but the staff always think of ideas and we try to incorporate them and some are successful and some are not.
- [58:12]
Eugene Shotsman
Yeah, this is such a, because obviously there's like tangible, tangible benefit to the, to the business, but it's such a high service, high touch service business that depends so deeply on the experience the patient has. That's, that's what I mean. You, you totally covered it. As I, what I was trying to get at is that it's not just about what you do as a procedure, it's how you make the patients feel when they're receiving the procedure or they're walking into your spa. Because the whole point is this is a super high retention business if you do that right. But it's also a really high cost business if you do that wrong. And clearly you figured it out. So that's why I wanted to, I wanted to touch on that. Okay, Amanda, as we wrap up, two mistakes to avoid. Two, two biggest mistakes to avoid for anybody considering going deeper into their aesthetics business.
- [59:15]
Dr. Amanda Barker
One, buy into the performance that are provided to you directly from reps. I think that, you know, you have to be wise in what you're buying. And I do a business plan on every device. So I, you know, the reps will gladly give you how you're going to make 500,000 in one year. I, I, I think that that's a dangerous road to go down because you must have, you know, a protocol in place, you must train your staff, you must have the right appointment links, you have to have the marketing in place, the launch in place, and then a reasonable effort has to be made to roll out anything. And that's work. So, so, I mean, I think that's a misconception. I'm going to buy this device and it's going to make all of this money. Well, it's, it can, there's work that goes into it and usually those are highly inflated. So I think that's, I've gotten much better at giving Pushback and asking questions and developing my own business plans on all the decisions we make.
- [60:26]
Eugene Shotsman
I love that.
- [60:27]
Dr. Amanda Barker
And you're. Yeah. And you're skilled at ODs are skilled at that, because you've already done that. If you're running a successful practice or a successful business of any sort of. So that would be. That would be the biggest mistake I think I ran with in the beginning. This, the world, the aesthetic world is very, very different than the eye care world. You know, when you buy an oct that it's run like this, you read it like this, and you're going to get reimbursed this amount like. And they generally. You're not negotiating on prices. It's very, very different. Very different.
- [61:03]
Eugene Shotsman
Got it. And I think, you know, as I'm hearing you say this, a lot of the stuff you kind of figured out on your own. But there is not a huge community of ODs that are successful at aesthetics as an adjacent business. There's a huge community of med spa owners, but they may have a different approach to patient care. They may have a different approach to what's important to them. And, you know, many times med spa owners have different levels of certification or background that ultimately led them to where they are today. And so this community of ODs that are successful with medspots is actually really small, at least from what I know. So, you know, I hope that as people get a chance to explore whether this idea makes sense to them, maybe I can share some of your information in the, in the show notes. So if people have questions, maybe they have a chance to reach out to you or something like that.
- [62:03]
Dr. Amanda Barker
Sure. Sounds great.
- [62:05]
Eugene Shotsman
Thank you so much for being on the Power Hour today. It has been an amazing conversation and so eye opening, I think, for me, because as people think about these little adjacencies, and if you want to do it right and if you actually wanted to pay you back, then you really have to think about it as an independent business. And you've done that. And congratulations on all your success.
- [62:30]
Dr. Amanda Barker
Thank you. Thanks for having me.