Esthetician Podcast; Business tips for Beauty professionals

099: Part 2 - Esthetician Runway Rule: Can Your Beauty Business Afford That Machine?

• Kari Jo

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We share the rule that keeps big purchases profitable and show how to test demand before you buy. A candid laser story and a microderm win reveal how to match machines to the clients you already serve.

• three times monthly payment rule for profit
• monthly cash flow over sticker price
• emotion and fear versus evidence and numbers
• why tools don’t earn, systems and pricing do
• demand testing through demos and pre-sell
• categorize services to match your clientele
• simple homework to decide buy or wait
• mistakes to avoid with reps and hype
• runway requirement before any purchase

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Jana:

Hi, Jana, owner and licensed esthetician of Unalome Aesthetics in Wisconsin. I have a solo practice that was really struggling when I first started out. And I reached out to Kari Jo and did some coaching with her. And I cannot begin to express how grateful I am for everything that she taught me. I have a 98% rebook right now and incredibly busy. I am so grateful for her coaching and her tip.

Kari Jo:

Welcome back, guys. We are on to part two. If you are tuning in to this episode, but you did not listen to last week's episode, don't listen to this one yet. Go back, listen to last week's episode, and then come back to this episode because this is a two-part series of can you buy that machine? Or I don't even know. I feel like I'm gonna call it that, but who knows what it's gonna actually. I'm gonna actually end up calling it. But okay, so as you know, if you tuned in last week and now you're tuning in this week, last week we talked about your runway burn rule. And that is basically the one rule that keeps you from going broke. But today we are gonna talk about the next rule because I said that when you're looking to purchase a machine or that next move to next building, whatever it is, what you want to do is you wanna make sure first it's not going to make you broke, but then you also want to make sure it makes you profitable. So this next rule is basically what keeps your purchase profitable. Okay. So here's the truth that comes down. Like I feel like each rule has the sentence, right? So the truth with this rule, you don't look at the price of the machine itself. But what I want you to look at is you want to look at your monthly payment on the machine itself. So let's say you bought a machine and it's say it's $30,000, right? But when you look at the financing for everything, it's going to end up being saying. Then you better believe that that machine needs to literally bring you in six thousand dollars every single month. Okay, that is what this rule is called. That is why it's called the three times your monthly payment rule. Okay, so every aesthetician, we need this today. I'm gonna walk you through it in a little bit more detailed route, just because my brother-in-law did that for me and it changed my life. So I am going to give back and I am going to do that for you. Okay, so I want to take you back to the moment when this moment when I was buying my laser machine. I wanted that laser so freaking bad. Not well, I really wanted it because I wanted it for myself, but I really wanted that laser, and I it was like the thing that was gonna take my business to the next thing. You know, I had Googled it, I went to a conference, I learned about different lasers. At the time, I was looking at like a Q-Tera laser, an Airlace laser. I think I had a few other ones, but I watched it, I had met with the reps, I went and had the service done on myself. I ran them all myself, I planned it out, I knew I was gonna have this laser room, everything. Probably sounds familiar to you. You've probably done it too. And I remember my rep was like sitting. I did end up buying the airlace laser, but I remember this exact thing happening. I was sitting with my laser, okay, and there's a famous Instagrammer. If you know, you know, she's on Instagram, she's a famous esthetician. She also has the airlace laser. Although, just so you know, she she also has the airlace laser. I'm just not gonna go there, but so I'm sitting there and this rep, he's like, Yeah, you know, so and so, and I'm like, yeah, and she's like, her company brings in over thirty thousand dollars a month with this laser. Okay, now guys, every sales rep is going to try to sell you that laser, of course. She makes over thirty thousand dollars a month, dude. She has she has uh credibility just by being a famous Instagrammer, so she brings in people just for that fact alone, right? But I I'm not that so, anyways, I remember like, but at the time I was still like, oh, third that I really wanted it, so I might go to my mentor, you know, and I'm like, she's making like $30,000 a month with this laser, I could be doing that too, you know? And my mentor like literally was like, oh yeah. And he's like, Kari, we need to sit down, we need to look at these numbers. And if this laser is not going to bring you in at least $10,000 every single month, then you are just gonna be paying for a really expensive hobby. It's just a hobby at that point. And have you ever like, and I know so many of us like we hear that all the time. Like, if you're not making money, then this is just a hobby and stuff like that. But like, I don't know, when somebody tells me what I'm doing is like a hobby and I'm working my butt off, it like really like pushes my buttons. But anyways, that one sentence it basically saved me. And I was like, okay, so we gotta figure this out. So here's the thing this is the reason why you want you care about the monthly payment and not how much the machine costs in the long run. You probably should care about that. I'm not a financial advisor. Oh, before I do this, guys, I'm not a CPA, I'm not a CFO or anything like that. This is just things that I learned in my company that I am passing on to you. I don't know if I need to pre-warn that. I don't know. Anyways, but when I go to buy it, it wasn't necessarily that I was caring about the grand price of whatever the machine was, like the total cost of the laser, right? But what I did care about was I did care about the payment. And the reason why is because I'm not going to be paying off like $100,000 tomorrow, right? But I am going to be paying that price for a long time. And that is going to be a cost to my business. So if your business only cares about one thing, and that one thing is, can you make can you afford this every month? Then, like, and you look at just like the payment, I mean, that's dumb. But if you can make more than what the payment is going to be on that, then that's it. That's that's good business, right? And you're probably like, yeah, Kari, I know that makes sense. But guys, you need to know why, because you're like, I'm gonna also dive into it in a minute. I'm gonna dive into how to know if you should get it, because I'm gonna tell you what I did wrong on the laser as well. So keep listening. I promise you'll get some. Oh, mmm, okay. All right. So the rule of and the rule itself is your machine, whatever you're buying, you need to bring in three times whatever that monthly payment is going to be. So let's say if you buy a machine and that monthly payment is going to be $400, then you must be making $1,200 every month from that, right? If it's $800, you need to be making over $2,000. If it's $2,000, then you need to be making over $6,000 every single month, period, right? Why three times? Because real life happens, right? Go look at your numbers. And some months we have like great months, and then other months we have crappy months where we think nobody is coming and we're like basically going out of business, right? We have slow seasons, we have high seasons, we have cancellations, we have refunds, repairs, I don't even know, whatever it is. If you are only looking to break even, if that payment is $2,000 and you're only looking to like, oh, I can cover that $2,000, it is worthless. Let me repeat this. If you are only going to break even on this machine, it is completely worthless. If you always follow this three times rule, you will always have a profit. Okay. So where I find things can go wrong is that we buy machines based off of like hope that it's gonna bring in clients, right? We buy it off of emotion, like we really, really want it. We get sold on it. Everybody else has it, or you have a fear of messing out, or you have a fear that you are behind, right? We have to address those fears. That's why I wrote my book, Fearless Prosperity. Gotta go over all those fears in order to get prosperity. Okay, so one of those things. So, like, if you look at like all those different things of why aestheticians buy machines, the truth is that none of those things are actually going to make your machine profitable. Machines do not make you money, all right. Machines do not make you money, however, education, marketing, systems, and pricing will make you money. Those are the all the things you need in order to make money. So the machine is just a tool, it is not a money-making thing itself. So before you decide to buy it, like these are the things that I'm gonna write down these questions, and these are what I'm gonna ask you. If I'm coaching you today, this is what I'm gonna coach you, okay? I'm gonna say first and foremost, do you have three months of runway? And you learned that on the episode prior to this one, okay? If you don't, the answer is automatically no. I'm telling you, no, you can't get it. Now, the next thing I'm gonna ask you is can you realistically generate three times the monthly cost? Not the don't hope. Don't like, I want to know realistically, can you generate that with the clients that you already have? Not like if I get this, then I'm gonna have a client. So you need to be able to do it with the clients you already have. And the last question I'm gonna ask you is do you already have clients asking for this service? If it's a no, then it's not gonna solve your problem. Now, I'm gonna go into this one a little bit because this is how I knew to buy something, and I'm gonna tell you what what I did right and what I did wrong. When I opened my business, I only had $4,000 to start. And my husband, like, and so as you know, $4,000 is not gonna get you crap when you're starting your business. And so I had to cut corners. And so when I was starting my business, I ended up buying a microdermabrasion machine off of Amazon. Yes, I bought an Amazon microdermabrasion machine. Shoot me, it was embarrassing. Okay, but here's the thing is I'd been in the industry for uh many years before, so I've used really good microdermrasion machines and I've used really crappy, that really crappy one. So I knew what good was and I knew what good wasn't. And so it was really funny. When I opened my business, I had so many people calling and wanting to book a microderm abrasion machine. I know nobody really does this anymore, but we're gonna talk about it. So everybody wanted a microderm abrasion machine, but I knew my machine was complete shit because it was. So I felt bad giving it to them and I didn't want to give it bad service. And so almost every single person that scheduled a microderm abrasion, I would schedule them a microdermrasion because that's what they asked for. But when they came in, I would convert almost every single client, like 99.9% of all my clients, I converted them to doing a lactic chemical pill instead. And it was because I didn't feel good about doing the microderm abrasion. And I used this whole spill. And like Ivan, my virtual receptionist, she's like, I just put you microdermabrasion. I know you're gonna switch it to lactic chemical pill. Guys, I needed that microderm abrasion machine. I knew I wanted it, and so that was the first machine I ever bought. It was $4,000 and I was so nervous. But like, here's the thing it paid for itself so freaking quick. Why? Because I already had all my clients were asking for the microderm abrasion machine the whole entire time, right? So it paid like I don't even think I carried that loan for like longer than two months. Like it was like paid for, like everybody wanted it, you know, because I started using it and I could sell it, and so that was great. Now, switch with the laser. See, this is what I did wrong, is right? Do you already have clients asking for this service? I wanted a laser because I wanted to do laser hair removal. In particular, I wanted to do laser hair removal for myself because yeah, but anyways, I wanted the laser for hair removal, not even for skin rejuvenation. Now, if you looked at my clientele, I had no clients for well, I mean, we always like upgraded for waxing the brows, but like my waxing clientele was like not massive. At one point, I had like a Brazilian waxer girl and stuff like that, but then she ended up leaving, and my other girls they weren't really into that, so like I didn't really have a big waxing clientele for the laser, but that's why I was wanting to buy it. Well, when I bought the laser, it's funny, I thought that like we would be doing laser hair removal. I was advertising that we did not use the laser for hair removal, hardly at all. Like it was probably only like 10% of our clientele. Luckily, though, the air lace laser that I did use, it was also known for skin rejuvenation. So we did use it a lot for pigmentation, for collagen and everything like that, which it was helpful that I had a laser that did both. I should have known prior to that you have to have the demand, right? My my clientele, what when you're buying a machine, look at what category that machine is in in your business, right? Like, are you already having clients in that category, right? I should have known that the laser was not gonna sell wax or for hair removal because that wasn't really my clientele. My clientele was more skincare, right? So you gotta look at those types of things, and they will literally save you thousands of dollars and thousands of stress if you figure that out. So here's the easiest test on earth. The test you wanna basically, I would say like test the service before you buy the machine, you know. Um, with the the we tested the hydrofacial before we brought it. We brought it out on all of our, and we did it on all my girls, my clients. They were sold from the very first time. So it was easy to sell that freaking hydrofacial, right? It was easy to sell the laser because people are like, it doesn't hurt, right? So that was really good. Just track your numbers, find what people are look are are talking about to you and track that. Your clients, they're gonna talk to you about what they see on TikTok and Instagram. Track what they're saying that they want, and that will also help you know if it's a good investment. So, okay, let's make this ridiculous easy. Your homework today, if you want to buy the machine, is write down your monthly payment of whatever that machine is gonna be, multiply it by three, and then ask yourself can I generate that today? If with like the current clientele and the current demand that I have right now, with your current pricings, all of it, just with what you have right now, can you generate that payment? If the answer is no, this is not your moment yet, guys. When the answer is yes, that's when you run the numbers. Now, before you run off and you go and buy your next machine, let's make sure you're making a smart move. Okay. If you have a business question or you're stuck in survival mode, or you're ready to growth, or you just don't know your next step, then I want you to come on my podcast and let's solve it together. All you have to do is fill out my business audit in the show notes below. You'll tell me where you are in your business, what you're struggling with, and you might be invited to come on and be a guest on the Esthetician podcast. And listen, if you're ready for coaching, book yourself on my calendar. Guys, we don't need a guess. We just need to grow. Okay, let's do this. Bye, guys. I'll see you next week.

Announcer:

Thank you for listening to the Esthetician Podcast with Kari Jo Patterson. Each week, Kari brings you real-world lessons on how to grow your empire. To learn more about Kari's fearless prosperity mastermind group, one-on-one VIP coaching opportunities, and more. Visit www.karijopatterson.com. That's www.karijopatterson.com. See you next week for more insights and strategies on the Esthetician Podcast.