How to Create Passive Income Streams
The holy grail of every practice
Adding different revenue streams to your practice can help you maximise profit with minimal effort required by you.
As a doctor and business owner, there’s a real likelihood you can develop “key person syndrome”, where you are so vital to a particular function that it can’t occur without you.
The addition of revenue streams to your practice has the potential to produce countless benefits: more satisfied patients, more money generated and more time for you to spend doing the things you love the most.
Identifying, analysing and making changes to business processes can streamline your practice and earn you money while you’re away from the practice. There is an increasing trend towards diversifying practices to include ancillary revenue-generators such as medispa treatments (including laser hair removal, microdermabrasion and peels) and retail products, with provision to cross promote services. Employing staff members to effectively “own” these business offshoots is the key to allow you to take a step back – all the while generating passive income.
Adding new revenue streams
When adding a different stream – be it new capital equipment, skincare products, medispa or wellness centres – there are certain questions to always keep at the forefront of any decision-making:
- Is there demand for the procedure?
- Will it add to the current patient experience?
- How will it affect my time? Can it be administered by exisiting staff?
- Is it lucrative?
- When will I break even?
- How will I market it?
You also don’t need to do everything at once; start small by adding one new procedure or service at a time.
Non-invasive cosmetic services such as laser skin resurfacing, Radio frequency (RF) skin tightening and energy-assisted non-surgical body contouring have reinvented the cosmetic enhancement industry and become a mainstay of many successful practices.
Slowly but surely, those procedures that were once the domain of the beauty industry are moving into the medical arena. Treatments such as high-end facials, Intense-Pulsed-Light and laser hair removal can be easily incorporated into cosmetic practice. Oftentimes, this will not only attract an entire new patient population, but also incur a conversion rate – where patients coming in for “beauty” procedures begin to explore more invasive options on offer.
Ancillary medispa treatments not only generate impressive results – and boost patient loyalty – but they also have some serious earning potential. Typically, these procedures can be performed by a nurse or skincare consultant, and signify an earning arm of the business that is separate from you, the surgeon.
When considering purchasing or leasing a new piece of equipment, make sure you do your due diligence: will the additional revenue created pay for the machinery, and when? Is there a market for the procedure?
For everything you need to know when making a decision to purchase Capital Equipment, see the article by Wendy Lewis, containing her tips for getting the best return on investment.
Introducing retail streams
Patients are not always aware of their need for proper active skincare. This presents an enormous untapped opportunity for you to train you medical-spa staff to become proactive, sales-savvy educators.
By educating patients on those ingredients specific to their skin concerns – for example, wrinkle reduction, pigmentation lightening or texture smoothing – the “selling” side of skincare is effectively eliminated. With the rise in popularity of non-surgical cosmetic treatments, patients are increasingly taking a proactive approach to anti-aging. With the right products, and a team of educated, friendly staff, this proactive attitude can be leveraged to encompass skincare.