If you’ve had the experience of growing a business with increasing sales – but you’re not taking the profits out of the business that you deserve – you are not alone.
I can’t tell you how many aesthetic clinic owners are incredibly frustrated because they’ve worked day and night to get their business to multiple 6/7-Figures, they’ve got a big team of practitioners, sales have gone up – but they’re not actually making much more money than they were a couple of years ago.
So why does this happen?
Despite working harder and harder…
Putting in more and more effort…
The business either doesn’t grow or grows incredibly slowly.
Worse still, you end up creating ‘bloat’ in the business:
Too many staff.
Too many products and services.
Too many costs.
As a result…
Profit margins suffer, stress levels rise, and many owners get dangerously close to burnout trying to keep everything afloat.
The solution?
Nearly always it’s to trim the fat…
And do less, but better.
If your clinic has a high turnover but you’re still not getting the profit you want, then perhaps it’s time to re-evaluate your business strategy?
Here are three reasons why most aesthetic clinic owners could make WAY more profit by doing and offering LESS:
1. Spiraling Overheads & Costs
I have seen this time and again with fast-growing clinics: When sales are increasing and the bank balance looks very healthy, it can be mighty tempting to spend huge chunks of it on the latest technologies, new hires, and other shiny opportunities for further growth.
However…
Offering too many treatments and services can increase your overhead costs significantly and turn your business into a cash-eating monster! It can quickly spiral out of control with increased product costs, employee wages and commissions, hire purchase agreements, equipment maintenance to name but a few…
And it becomes a beast that constantly needs feeding, which means spending significantly more on marketing, advertising and other business services.
For those reasons, we have a saying that we use with all of our clients:
“Stay lean, even if you can afford to get fat!”
By limiting or reducing the number of treatments & services, you can cut your overhead costs and dramatically increase your profit margin. You should also consider outsourcing certain tasks or using shared spaces for your clinic to reduce your costs.
2. The Pareto Principle: Focus on What Really Matters
You’ve probably heard of the Pareto principle or the 80/20 rule – 20% of your efforts generate 80% of your results.
Take the time to analyse your business data and identify which treatments and patient groups generate the most profit. Once you’ve identified the most profitable ones, streamline them and don’t be afraid to discontinue treatments and services that provide little or no profit.
When it comes to increasing the long term profitability of your business, you need to keep a close eye on the 80/20 rule so that you know exactly where to focus your own time and attention for optimal results, and you know how to deploy your team and resources in the most efficient and profitable way.
3. Quality over Quantity
It’s easy to get caught up in the race to offer multiple treatments and gadgets that may not even provide the desired results for you or your patients. Focusing on quality over quantity means focusing on providing exceptional results-driven treatments and services that keep patients returning.
By specialising in a handful of high-value treatments that deliver amazing results for your patients with minimal cost to the clinic, you can establish yourself as an expert and develop a loyal patient base, ultimately increasing your revenue and profit margin.
Always run the numbers, check your running costs and profit margins and bring your patients into the conversation before making any decision to implement any new treatments and services into your clinic. Keep the focus on quality, not quantity – it will certainly be reflected in your future bank balance.
So, if you feel the time has come for you to take stock and re-evaluate your treatments, services and packages to make sure they align with your long term business goals and profitability – we’re here to guide you.