Laser hair removal devices are by far the most expensive investment in a clinic. Often exceeding $100,000, with many substantially higher, clinic owners most commonly use financing options to start, maintain, and grow their businesses.
Recently, rentals have become more popular, but is it better to rent a device or take out a loan and purchase it? There are pros and cons to all financing options, and everyone’s situation is unique. Let’s go through some of the advantages and disadvantages of renting a device.
Imagine you are considering renting a Candela GentleMAX Pro. You have recently started your own clinic, following a successful career as a laser technician and – as with most new businesses – controlling outgoings is important. For business owners in this scenario, the most common question we get asked is:
What’s the cheapest way to get the best device?
Regardless of how you purchase a device, we suggest new businesses focus on cashflow rather than overall cost initially, while keeping an eye on long-term options.
Firstly, both a bank loan and a rental require regular repayments.
Secondly, a bank loan incurs interest while a rental means not owning the device.
Thirdly, a rental will often come with additional benefits such as servicing being included in the cost, consumable discounts and ongoing training.
Everything should relate back to this financial formula –
Take the cost of the rental (assuming it includes servicing) and the cost of the loan repayments (add a bit on for servicing, perhaps $10,000 a year).
Work out how many treatments on average you will perform each week or month, be conservative.
Work out your average treatment fee, again be conservative.
Now multiply your average treatments by your average fee and benchmark that against your monthly outgoings. This should give you some clarity around the finances, then you can focus on your personal comfort level.
Of course, established businesses are entirely different. Imagine you have a clinic that currently has IPL, cryotherapy, and traditional facial treatments. You want to expand into laser due to client demand and want to know how to do it. The most common question we get asked in this scenario is:
How do I grow my business?
Of course, the above financial formula applies in any scenario and should be used as part of the expansion plan. However, established clinics have the advantage of an existing database and conversations with clients that help the owner understand how high demand will be initially.
But is renting a good option for established clinics?
Renting becomes a far more compelling option for established businesses when you take into account inclusions.
Importantly, when we reference inclusions they do vary from supplier to supplier.
Laseraid clients get a wide range of additional bonuses including
- Training for new staff (which becomes hugely beneficial for established businesses)
- Consumable discounts for regular orders
- Seven-day support
All of these additional benefits help to reduce costs in more ways than one. Servicing and support reduce downtime which ensures more treatments are completed and fewer clients are disappointed. Consumables are a regular cost. Training is a requirement to remain competitive, and often hugely expensive.
Choosing between renting and taking out a bank loan doesn’t have to be a difficult choice. Ask about additional benefits, guarantees, and explain your particular scenario in detail so that a solution can be created to set your mind at ease.