STARTING NEW PRACTICE WITH PLANTINUM

Hair Removal Methods Professional Electrolysis
1

Hello.

I know someone who just graduated from an electrology school and is looking to start her own business. She just bought a Platinum (the best on the market) and is looking for a place to set up shop. She wants to focus on hirsuitism and ideally would like to work with a dermatologist. However, she has been looking into salons and medi-spas. Most of them you rent out a room and just pay rent and one would be responsible for all the supplies, phone line, etc. However, most places charge a percentage of the profits (a “cut”).

What is a good percentage? I myself am a psychiatrist and I split 70/30 with a psychology group practice I work with. Don’t want someone to rip her off, but is 75/25 split fair? Because she has the Platinum, she will likely charge $95/hr.

Thank you. BJ

2

That is a fair split if she is getting services like housekeeping, reception, and so on. If she has to pay rent, run her own phones, clean, and so on down the line, she really is better off just renting her own space and going it alone.

I think most practices do one or the other. Either you pay rent, or you have a split, but not both. That is not to say that some don’t have a modest rent to cover the down times when business is slow, but the utillities still have to be paid.

3

I’ve done it all, and I highly agree with James that she is better off renting her own space and going it alone.

I’ve worked for another electrologist, I’ve rented space in a derm’s office, I’ve had a partner, and now I’m solo and “knock on wood” never again will anyone else have any control or say over my success or failure other than me.

I’m not sure how I feel about rates based on using the Platinum. If she was an ace electrologist, that’s one thing, but for someone who just finished school and doesn’t have a list of clients singing her praises, she shouldn’t overprice herself. Even though this is an active forum, very few actual clients ever research electrolysis. Very few will be impressed that she has an Apilus Platinum.

4

the cost doesn’t just depend on the machine. as mentioned, few clients even know the difference. the most important thing is experience, which she doesn’t have yet. and she doesn’t have a client base yet. also, the cost depends on her location. $95 is considered very expensive everywhere except NYC. here in LA, most electrologists use this machine and the average price is still $60 per hour. everywhere else, the average is still around $60-65, even by very experienced electrologists with new machines. plus, this is LA. clients won’t pay $95 in Kansas where others are charging $40-60.

to give you an idea, I know of one electrologist here who started about 3 years ago. she has this machine as well and was first charging $55 per hour which was in line with what most others were charging. at this point, she has a very solid client base and recently increased her rate to $80. however, she also moved into another bigger office, bought another set of equipment, and hired another electrologist to be able to serve more clients. so the increase is justified.

5

A 75-25 split is excellent even if she is paying for all her supplies, malpractice, equipment,etc. This is a good business plan for a new electrologist with no client base. If she had to pay $600 per month fixed rent with a 3-5 year contract, communication expenses, supplies, marketing and advertising fees, malpractice,health insurance, retirement savings, disability insurance she will probably have a lot of sleepless nights. It may take at least three years just to break even, maybe even longer with that Apilus Platinum. If she see’s 2 clients a month in the beginning and pays 25% of that income, isn’t that better than handing over $600 every month with very little coming in?

The shift to an office of her own should be considered when that 25% starts to equal more than what the normal rent would be for the square footage and common space she occupies. If she is in a 12’ X 12’ room and is paying a 25% fee that is, for example about $900 per month, then that is a gross imbalance. She should negotiate to RENT the space and drop the percentage deal, duh!

I think the percentage of 25% is a fabulous kick start for a beginner, but if she gets good at this, the clients will come and that’s when a percenatge is no longer a good deal.

It is very expensive to run a business. That’s why a lot of electrolgists work out of their home. Add a merchant account to those expenses and that jack’s things up as well. If she can use the credit card swiper in a doctor’s office or wherever, all the better for her.

She needs to work hard and understand her epilator very well. Hopefully, she got some customized surgical loupes to go along with that fabulous epilator. Continuing education is a must, must, must! Belonging to an association is important.

I hope this helps your friend.

Dee

Oh, I forgot a few other things. In my state of Ohio I need to collect and pay for sales tax on my services. There’s state income tax and city tax. I need to send a check quarterly, 1.5% of my estimated income. If my equipment I use goes over the $10,000 mark, then I need to pay a luxery tax or a personal property tax. They changed the name to make it sound better, but I forget what it is called at the present time. Oh, and I’m taxed at my husbands income level. Not to depress you, but one has to remove a lot of hair to pay for expenses before they even take anything home.

6

First of all, thank you very much for your posts.

The biggest fear for my friend is the overhead. First of all, she is in Orange COunty (near LA). While most prices are at about $65/hr, most of them use Hinkel or Multi-needle (blend technique).
She is planning to join the AEA, go to the conference next month, and eventually get CPE. YOu guys brought up a good point b/c it appears that rent is good if business is good,but % is better when having less clients.

Over here, some of the platinum people charge around 80-96$/hr. There are not many of them. Granted many will not know what it is, but there is a huge difference in pain tolerance. My friend is, with the proper marketing, considering working with a spa or renting out some space. The renting out of some space is ideal, but she is not sure how she would attract the clients in the beginning. Any creative ideas in marketing?

Thanks.
BJ

7

If she is located within the spa and there is a steady flow of customers, that should be helpful. She should have a sign that is an eye catcher and some brochures present. Her initial consultation should informative, clear and to the point.

Once she gets a client and does a great job, that client may send her friends and relatives. Word of mouth is how I get most of my clients, but that takes time to build. I have found that advertising in the local community MAY be helpful and she may have to consider this. The problem is, it is costly. Sending quality letters with a quality business card to several physicians in the area that come into contact with hirsute patients can be helpful as well. The differnece between laser and electrolysis needs to be defined for them because everyone seems to be on the LASER wagon.

Overhead has to be kept down and this is hard for any new business or sole proprietor. She has to be good at this as well. Maybe she can practice on you with that new Apilus?

I’m sure I missed a lot of good ideas, but I’m in a rush now. Other’s are welcome to offer up their ideas.

Dee

8

She should be looking to do as much as possible to be able to do actual sample treatments and consultations. Anything that allows her to actually answer live people’s questions, and get then on a table to then get real world answers about their personal treatment situation, and also to feel the comfort of the Platinum.

In addition to all that, keep in mind that one male beard client equals 12 or more female clients.

9

Everyone on here has given good suggestion regarding any new graduate trying to start out. My guess is that this graduate attended AIE in Long Beach, Ca. where the only machines they now use is the Apilus Platinum. She obviously has her 600 hours in and has passed the state exam, or she would not be able to set up a practice in that state.
Instructors at that school, encourage graduates to charge full amount when the start up, saying it is more difficult to change prices after you have been treating clients. Personally, I choose a different route, my aim is to help my clients and I charge minimal fees but then I have a retirement income coming in. That is very helpful in keeping me afloat during this time. It does take a while to build up clients. It has been a year now and a busy day is 4 clients at least for me. Some days I still do not have any clients, and some days, I am very busy all day.
The school charges clients that come to the school, to have students work on them, a little less than I charge, but the school also gets tuition from the students. The instructors are Part time and have their own practices. They want to compete on an equal footing price wise with craduates, and so they advise students to start out at the same fees than everyone else is charging. It is Apilus whom suggest that clients should be charged $100 if you use their machine. Maybe there is something to not undercutting your competition. Advertising is very expensive, however it does help to get articles published in the paper. Things like getting certified etc can get published in the business section. Some people do read these sections. The cost for such is just the time and expense to get the newspaper a notice. But still word of mount has been the best for me.
It has been very helpful for me, that within our area is a Gender Identity Support Group. They have been a wonderful source for me to get the word out, and even today, I offer very generous discount. I first started out, with only one client from this support group, and a friend whom I invited to come to me, and whom which I knew really needed help that I could offer, and whom I knew could not afford anywhere else. This person was very hair, and has had some very bad other kinds of treatment, as well as having seen other electrologist in the past. She still figures she has several years worth of hair still to be removed. But she can see progress. I agree, word of mouth is the best advertising available, but it does take time. Also winter months like between now and Christmas can be difficult to get new clients as Christmas shopping and other holidays take away from a persons available time. I think it took unti probably march before I started seeing more clients last year.
Right now, it looks as if I am going to skip this years convention. Funds are tight right now, and I really do not want to take a couple of weeks of not seeing my clients, as I have some very wonderful people as clients. Also part of myself does not want to see some certain family members that I would come in contact with during the trip. Oh well, we all know of situations like that.
Considering I only started out a year ago, I figured my advice secondary to the years of experience others on this board have.
But then again, many businesses fail the first year, and I have somehow managed to keep things alive this long. Oh yes, I do not operate out of my house, and I spend almost $700 a month on rent for about 500 sq ft of office space, with its own bathroom. I have the malpractice insurance and fire insurance etc to also carry. But I am blessed with not having to worry about health insurance. I have two plans already, one via spouse and one from retirement. The first few years are very difficult for any new business. I hope she does really well.

10

I’m popping back on this topic because I just thought of something. Many new electrologists, myself included, worked at one job, completely different from performing electrolysis, until their client base got going strong. So if she works at, let’s say, Starbucks part-time and does electrolysis part-time there will come the time when she can drop her Starbucks duties and concentrate on electrolysis only. She will have some income until that day comes.

MarthaJ describes her client situation best as a new electrologist. There are gaps in the schedule when you are new. To fill in those gaps, become one the best and they will come. Have your friends spread the word. Just make sure they say you are an ELECTROLOGIST. My husband was joking around and told a bunch of people that I was an electro-LOGER and I had calls from people wanting appointments to read their charts. They thought he said ASTROLOGER. It was one of those “strangle the husband times”.

Dee