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Pampering to Prevention. How Doctors, Wellness Practitioners, and Spas Can Play Together Nicely

There is a perfect storm brewing that bodes well for the future of forward thinking doctors, spas, and wellness practitioners. We're finding our way through a fusion of the services and care provided by physicians, wellness practitioners, and spa operators. In order for this to occur, spas have to be more involved with preventive wellness oriented services, and doctors need to view spas as more than an opportunity to bolster their practices with cash (non-insurance paying) patients. Spa operators, physicians, and wellness practitioners must all become lifestyle coaches and service providers. As both spas and medical clinics currently exist, an opportunity to merge the two is clearly on the horizon.

In these challenging economic times, our clientele has less money to spend on luxury or optional services. Spas are struggling because our clientele is struggling financially. Our clientele wants our services, but they have less money to spend and they want services for less money. Coupon sites like Groupon and Living Social have driven prices down and have challenged guest loyalty.

Primary care physicians are struggling and disappearing. As the number of primary practices decreases as it has every year for the past several years, many of our communities are underserved in basic medical care. Health care costs are spiraling out of control due to the procedures of the insurance companies and inefficiencies in the business practices of medical offices. 47% of health care costs are paid for by public funds, panic has set in, and our efficient and practical government is attempting to mitigate the issue. For some time now, and in the foreseeable future, private practice physicians are not making enough money.

Spas are already providing wellness. The tradition of spas as a place for healing, renewal, relaxation, and feeling well, positions the spa industry as one of the most logical sectors to help lead the wellness movement. Wellness also provides an opportunity to reshape the image of spas, to regroup after the global recession, and to position spas as an investment or an essential element in maintaining a healthy lifestyle. There is a growing opportunity for spa operators to move into the world of preventive care services by joining forces with physicians, naturopaths, alternative, and integrative health practitioners. Physicians who operate medical practices have difficulty understanding that spa is not merely a cash opportunity to bolster their practices. Physicians are not trained to deal with the hospitality required to operate a spa. Some hospitals "get it", have done their research and are leading the band wagon. Take a look at the Cleveland Clinic , The Wellness Center at Dowell Springs and Waters Edge at Lone Pine Village . On a smaller scale this opportunity for spas and medical practices is real and timely.

So what happens to pampering and beauty? I see salons becoming more and more "Spalons" taking on the beauty services of skincare, waxing, nails, and hair in a less pampering, less opulent setting similar to what happens with the walk-in anytime street front massage studios in Asia. Spa Finder (in their 2011 Spa Trends Report) has identified this as the "Spa in a New York Minute" trend stating that "the spa industry is currently responding to this by providing extended hours and all-night spas to "express," "sampler" and simultaneous treatments to new, more efficient treatment technology and facility design."

Now, the rest of that "Perfect Storm". Remember when the housing bubble burst? Well, the commercial real estate bubble is heading towards burst-dom soon. There are financial and business benefits to real estate ownership. Lower real estate costs with motivated sellers will create an opportunity for physicians, spa operators, and wellness practitioners who are prepared to purchase real estate.

I like collaborative businesses. I like it when businesses band together in a synergistic manner and share costs and operate efficiently. Businesses can co-market and refer each other. If they take a holistic and preventive approach to caring for clientele, physicians, spas, fitness centers, body workers, estheticians, nutritionists and yoga studios could work together to care for their clientele and lower the cost of healthcare in the process.

We propose the development of Wellness Villages, Health & Wellness Suites, and Healing Arts Campuses. The opportunity exists to provide doctors, alternative medical practitioners, spa owners, and wellness providers with a suite or building where multiple practitioners share a common lobby, reception, administration, conference room, lab, and dispensary. Each would maintain their own consultation and treatment rooms. We feel that this would let the healers heal and provide executive suite business support services. This would create increased practice marketing opportunities via the proximity to and operational synergy with complementary practitioners. The client/patient experiences a unique and supportive healing community where they receive hospitable and professional care and services. The Health & Wellness Village provides centralized and focused preventive care as a result of like-minded physicians and wellness practitioners practicing in a village of complementary practices. Many of the business services required are provided as part of the lease agreement at the village. By focusing on preventive, holistic treatments and primary care medicine, it also brings down the cost of healthcare.

The tenants of these villages would be synergistic pairings of Health, Wellness Fitness, Spa & Beauty practitioners. Wellness Villages could be constructed in office buildings, retail centers or mixed use centers. They could also be built on floors or suites within office buildings. Funding is available in today's market for owner occupied real estate like this.

Interested? Wellness Capital Management would like to assist in the development of Wellness Villages like this around the country. We can help with assembling a group of like-minded practitioners, setting up the necessary structure, business planning, development and management of the village. If you'd like to talk about it, give us a call, the first call is always free.


Call 888.727.5489 or e-mail us atMonte@WellnessCapital.com.

ProKnowledge Workshops from the Day Spa andInternational Medical Spa Association

I'll be presenting "Budget Intensive – An Advanced Business Planning Workshop" and "Using Consumer Data to Deliver What Your Clients Want NOW!".

I am also honored to be seated on a panel discussion called "The Fusion of Well Being: What the Future Holds" with my colleagues Dr. Tamyra Comeaux and Alfredo Carvajal.

To learn more about the ProKnowledge Workshops, visitwww.ProKnowledgeWorkshops.com. I hope to see you in Portland!


You are managing your business every day and hopefully, as you read this you have mapped out your profit plan for 2012. Based on last year's performance you should have a good estimate and roadmap showing what to expect this upcoming year in terms of sales, profit, assets, and equity. If you don't, you should take the time and make a plan now.

Beyond the end of 2012, what are your plans? How can you manage your future if you don't have an exit or transition plan? Is it realistic to think that you want to continue managing this business or performing these services for the next twenty years? Do you have a picture of how you plan to retire or exit from your business? Passion is one thing, but ambition provides a future.

Know the value your business or practice. The short story is that spas and wellness facilities are valued at somewhere between 3-1/2 times Net Profit and 40% of Gross Sales (not including Gift Certificates). Medical Practices are valued at approximately 2 times Net Profit and 65% of Collected Revenue. For a business to have value to sell, it must be bigger than the revenues earned solely by the owner. It must show Net Profit which is adequate to service the debt created for the value of the business that the buyer will be paying to you to purchase the business. As I learned a long time ago; No Net, No Debt!

'Tis the season to buy real estate. Understand the value of real estate in your area. Better yet, understand that the bubble on commercial real estate is about to burst and many markets will be experiencing a decrease in real estate value. Look around. Are you seeing an increasing amount of vacant space? How long do you think landlords will allow this to continue until they re-think the rates they are asking for their space? Increasing vacancies means less income which equates to lower value. If landlords have not managed their cash reserves properly, they may realize that it is in their best long-term interest to sell.

You're probably saying to yourself "But I don't have that kind of money!" You are probably already paying a similar amount in rent compared to the debt service you would be paying if you were buying your space. Buying your building and leasing it back to yourself will more than likely cost about the same as it does to lease your space from a landlord. Yes, you will have to get creative and come up with a down payment. The difference is that at the end of about fifteen years, you will own an income producing piece of real estate with positive equity that will be worth more than it is today.

There is strength in numbers. Don't try to do this alone. Look around you. Are there other tenants in your center who could be interested in owning a portion of the center or building you now occupy? Are there other health practitioners, physicians, or wellness businesses that could be doing better if they were situated next to a business like yours? Could everybody experience more success if all tenants in the center could combine their resources in advertising, reception labor, retail, and back-office administration? Could this make your business more profitable with new opportunities for growth?

Yes, money is available for qualified buyers. Commercial banks are lending and SBA guaranties are available for owner-occupied real estate. If you know what lenders look for and present a comprehensive and feasible package, there is money out there. Do not go to a lender until all your ducks are in order and your package makes sense. Lenders want to make loans, and money is available if they feel comfortable with the risk and financial strength of the borrowers. Are you a qualified buyer?

There is power when you join hands and work together. Look into your future and move towards your defined goals with confidence. Maximize the profit potential throughout your business life starting today.

Give us a call. We provide the experience and guidance to help put this together for you. As always, the first call is free. Our best wishes to you for a happy and successful 2012.

Our best wishes to you for a happy holiday season and a successful and profitable 2012.

Call 888.727.5489 or e-mail us at Monte@WellnessCapital.com.