One Trick Pony
It is no secret that industry trends can drive business and lead to an increase in demand. However, just as trends can drive up demand and subsequently boost profitability, trends can also have a devastating impact on business. In emerging industries changing demand can lead to volatility, especially for those who are putting all their eggs in one basket. Medical aesthetics is one such industry. An industry that was once emerging is now in full growth stage.
Because of the growing demand and popularity of services, a growth industry will see new entrants in the form of service providers, manufacturers, and suppliers. With this increased demand comes pressure. This pressure takes many forms and differs for each entrant. Service providers feel the strain on resources, which at the early stage is usually time. There can be more demand than they can reasonably handle. Hence, why we have seen more and more professionals leaving other industries to enter medical aesthetics.
With growth comes competition in many forms. In the medical aesthetics industry, there are more providers offering services in more formats than ever before. You can now receive Botox in a medical clinic, medical spa, dental practice, a single provider salon suite, at your home or in the home of a provider, or from a mobile unit (aka, van). You name it and it is probably an option. Medical technology is also evolving on what seems like a daily basis. As such, access to services is easier than ever. Patient outcomes are also continuing to improve. A treatment that once required an invasive procedure and significant downtime can now be done in the convenience of a treatment room in a matter of minutes with little recovery time.
One such treatment that has taken the industry, and world for that matter, by storm are weight loss peptides (aka, semaglutide or GLP-1). As such, demand has outpaced supply. Manufacturers cannot keep up, so compound pharmacies have stepped in to pick up the slack. Part of the reason demand has increased so significantly is due to interest by non-prototype users. GLP-1s were originally designed for the clinically obese and those at risk of diabetes. However, the effects were so compelling that those who were struggling with weight loss of any kind jumped on the GLP-1 wagon.
Now, we see weight loss clinics, wellness centers, and med spas marketing semaglutide to anyone looking to drop a few pounds, even if it is for a short-term event. Need to fit into that wedding dress? Three months of semaglutide may be your answer. Beach vacation coming? We’ve got your beach body solution. Semaglutide has become the be all and end all solution weight loss solution for many.
Demand for GLP-1s has become so strong that is has become the primary revenue stream for many med spas and wellness clinics. This is great for those who are looking to make a comprehensive wellness program a significant and permanent part of their business. However, this is not so great for those who are simply jumping on the GLP-1 bandwagon for the revenue boost. Why do we say this? What happens when the GLP-1 train comes to the end of its tracks? And it will.
Can people sustain the cost of monthly GLP-1 injections forever? Likely not. The monthly fee is equivalent to a car payment for many people. What happens when those on semaglutide decide to come off? Will they have the knowledge and discipline to keep from falling back into old habits? Will the weight pile back on as quickly as it fell off? What happens when an easier solution hits the market? Will people opt for an oral solution if one is offered? If so, will they simply pick it up at the pharmacy or jump online to have a prescription filled and skip the med spa or wellness clinic that adds no additional value? If so, how does that impact all those clinics that built their business around the short-term revenue boost realized by GLP-1s?
Will this happen? Yes. Something better is always around the corner. That’s why a business can never allow themselves to become a one trick pony. In many ways, business is no different than investing. Reasonable diversification and growth of multiple lines of revenue are wise for overcoming economic fluctuations, such as changes in demand, supply chain shortages, trend changes, and new technology.
Just as reduced demand for big lips and filled faces has impacted dermal filler sales, a trend, easier solution, or new technology will eventually impact every other lane of business in medical aesthetics. CoolSculpting is a great example of what happens when a business is built around one technology or service. Many body contouring clinics that made CoolSculpting their primary revenue stream have been significantly impacted by the semaglutide wave, bad CoolSculpting press, and poor results due to selfish sales practices of other clinics. Those who are aware of the danger of building a business on one shake pillar have built their business on a foundation of diversification and excellence in service and treatments offerings.
In the end, success in medical aesthetics is about doing things right and being strategic with the growth of your business. By staying on top of the most recent advancements in the industry, closely monitoring consumer trends, and considering investment in the “right” cutting-edge technology (right means demanded and gets the desired result), a practice owner can accommodate growth of their business while managing the short term impact of the one trick ponies who went for the golden egg in that one basket and are here today, but gone tomorrow.
💌 Are you ready to take on an investment partner to help you grow your medical aesthetics practice? If so, we are here to partner with you every step of the way. Fill out the contact form or send us an email at info@baraesthetics.com and we will schedule a call to discuss the possibilities.
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