An important aspect of any project is the careful day to day management of any project. Project management entails understanding full project scope, accountability and methods to manage the project.
What Exactly is a Project?
A project is a temporary effort designed to produce a specific product, service, or results with a well-defined beginning and end which is initiated in order to achieve a specific goal or objective. Projects are temporary in nature and their purpose is to bring about a beneficial change.
What makes project management challenging is that to be successful, it is necessary to achieve all of the project goals or objectives within the given project constraints (time, budget, scope). The types of projects that aesthetic medical practices are likely to manage include the planning and hosting of events designed to increase awareness of and interest in various service offerings as well as larger and more difficult projects such as Facility Renovation, Geographic Expansion, or New Construction.
Determine accurate figures related to expenses for cost of goods, labor, workman’s compensation, rent, taxes and benefits, etc. Some Medical Practices report their labor cost alone often exceeds 50% of their total revenue.
Understand your Costs
Direct costs are associated with the delivery of patient care. Indirect costs, also known as overhead costs, are not connected with the goods or services associated with patient care. However, they are a major component of the cost of running your practice.
The Beautiful Forever team will review your costs, compare them with today’s industry standards, and if your overhead costs are out of the recommended range, we will carefully analyze each overhead item and provide you with concrete, executable methods for improvement.
Understanding project scope prior to starting
The first step of project management is to determine the scope of the project. This sounds simple enough—until the project scope begins to encompass things that were not originally part of the plan, budget, or resources. Before you begin, identify, in writing, exactly what the project entails, the timing, the resources, the work assignments, and the budget.
Assign a qualified project manager that has the necessary skills to oversee the project. Prepare accurate Pro forma financials before you begin to ensure your budget is realistic.
Understanding and committing to the project scope before jumping in can be the difference between a successful project and one that leads to a fatal drain on time, money, and staff. A large project can be overwhelming for a practice.
The Beautiful Forever Consultants take an organized approach to project management to keep your project moving in a timely way while assuring that each task is completed properly and in a timely manner. Contact us today to find out how a Beautiful Forever Consultant can lend organization, leadership, structure and methodology to your project.
Building a pro-forma
Pro forma Financial Statements
For our purposes, pro forma financial statements are simply the anticipated financial statements resulting from future business transactions. They are essentially a forecast of what you believe your financial statements will look like at a future point in time.
The purpose of doing pro formas is to determine the economic feasibility of your plan. Your pro formas should consider:
- A detailed delineation of start-up costs
- A monthly income statement and cash flow projection for at least the first year
- Annual revenue and income projections for five years
- Itemization of start-up and operational costs
- Payroll and other schedules
- Capital equipment schedule
Let our team of experts help you “get it right”. Accurate pro formas are a key factor in guiding a successful start-up or expansion.
Design, construction and project oversight
Construction and Set-up Considerations
Diligent business planning requires careful examination of such items as architecture and design, construction costs, furniture and fixtures, equipment, uniforms, initial retail inventory, linen, training, and marketing. These are all cost considerations to keep in mind as you develop your pro formas.
Be well informed and updated on all your insurance needs, compliance issues and training. Know your state laws, they are changing and getting tougher all the time. Set yourself up from the start with all of this in mind. We’re available to help with each step of the process.
Renovation for maximization
Facility Renovation and Optimization for Profit Maximization
Ideally, your medical spa should be located separately from your existing Medical Practice. This allows the patient to feel that he or she has entered a “Spa,” rather than a medical office. First impressions are critical. Your medical spa should have the ambiance of an upscale, soothing environment. Think relaxation. It should be warm and welcoming and spotlessly clean.
If you are renovating a portion of your existing facility, you will want it to be a separate suite with its own entrance if at all possible. It should be treated as a separate business with its own business plan. While you can combine back office functions such as accounting, purchasing, and even appointment booking, it is a very different business than a medical practice. This new business should have its own branding, including a different name and logo than your medical practice.
As you renovate, keep in mind the things that provide a positive ROI, such as retail display space. You will want to include an area for retail product sales. You will also want to design your space for efficiency. The Beautiful Forever team of aps architects and designers stand ready to assist you. Our expertise prevents you from making costly and time-consuming construction and design mistakes. Spa layout affects profitability. We design floor plans to maximize the use of your spa’s space and employ spa designers who know how to maximize ROI through design.
For example, can your spa check-out area double as your retail space so that the same staff member can handle both? This is an area where a staff member routinely engages the patient one on one, providing an excellent opportunity to educate the patient about the products your MedSpa offers which complement the treatment the patient has just had. Remember, educate the patient, don’t sell them. You want the patient to know that these products will help them maintain the benefits of their treatment.
How you display your products is also important. If you display them improperly, you are wasting money. Customers should be able to easily reach the products, which should be displayed at eye level, especially your hero product. Lighting is also an important consideration for product displays. Avoid displaying product in direct sunlight where is could melt or suffer discoloration. Instead, design lighting which shows off the display rather than detracts from it.
Make sure your display is clean – no dust!—and that it is well stocked, organized, and that its appearance is refreshed often. Consider seasonal displays.
While you want your medical spa to have an upscale feel, don’t go overboard on spending money on excessively fancy furnishings and over the top interior design. Put money into good quality furnishings, soft lighting, and up-to-date colors. Often, money is better spent on marketing than going overboard on interior decorating.
Also remember, you have a story to tell. Use posters, images, and graphics to help tell that story. The use of signage and collateral sales materials (brochures) in your waiting area can help educate patients and increase sales.
Cosmetic redo to maximize space and increase productivity
If you have both a medical practice and a medical aesthetics practice, you can combine certain back office functions such as purchasing and accounting to help maximize productivity. Even though these are two separate businesses, and should be treated as such, you can enjoy the benefits of economies of scale in purchasing.
Another aspect of productivity improvement is eliminating waste. Waste is defined as unnecessary work. You should also review procedures at least twice annually to determine if there is redundancy that is unnecessary, or if there are new technologies which would streamline operations, reduce labor, and staff effort. For example, can patient forms be filled out electronically by the patient to avoid the need for staff to enter data into your practice management system?
Cross training of staff members is yet another way to increase productivity. It encourages team work, improves patient flow, and improves staff flexibility and morale. Other things to consider include reviewing work flow – is patient or work flowing in one direction or is it currently necessary to backtrack repeatedly? Saving steps or paperwork handoffs can reduce time and labor.
Expansion into New Facilities/Geographic areas
Before you consider expansion into a new facility or new geographical area, there is a lot of homework to do. To be successful, you not only need to be sure you understand the market, the competition, the demand for your services, but also have completed pro-formas to ensure you can manage the strain that expansion creates on business cash flow. Let our team of experts help you!
We will assist you in selecting the best space and location for your spa. We will review the demographics, identify potential sites, the traffic flow, the parking, and the myriad of other critical considerations. Don’t rely on what the real estate developer tells you. He’s interested in selling you the property. We’re interested in helping you having a successful practice.
Productivity improvement is about eliminating waste. Waste is defined as unnecessary work. You should also review procedures at least twice annually to determine if there is redundancy that is unnecessary, or if there are new technologies which would streamline operations, reduce labor, and staff effort.
With our experience and understanding of medspa best practices, we stand ready to assist you in streamlining your operations, improving productivity, and increasing your bottom line.
Income and Revenue
Think about all the possible income streams from services, procedures, and retail. For instance, the medical spa business is built on small margins so if you are not selling a lot of products then the margins are even smaller. Avoid the temptation to over-estimate income and revenue. Having realistic expectations is paramount.
Profit and Loss Statement
Setting realistic profitability expectations is essential to the success of a project. It is important to set realistic goals and revenue projections in order to complete a break-even analysis. No one has a higher level of interest in your business finances than you do. Getting the right information is critical to making better decisions about your business.
For assistance with Project Management, Business Planning, and Pro Form Financials, contact the professional consultants at Beautiful Forever.
Expansion into new areas
Before you consider expansion into a new facility, you have a lot of homework to do. To be successful, you not only need to be sure you understand the market, the competition, the demand for your services, but also have completed pro-formas to ensure you can manage the strain that expansion creates on business cash flow. See the section on Project Management for additional information on Pro Forma Financial Statements.
If you are considering expansion into a new geographic area, these same considerations become even more critical. Do you understand the demographics of the area you are thinking of moving into? If you’ve located a potential site, what’s the traffic flow? Parking? It is critical that you do your own homework. Don’t rely on what the real estate developer tell you. After all, he’s interested in selling you the property. You’re interested in having a successful practice.