Business Smarts

Winning finance and warranty strategies


Spa owners are naturally anxious about rising interest rates and the impact of inflation on their businesses. “Aggressive” was the best way to describe the actions of the Federal Reserve last year as it moved quickly to try to get a handle on inflation by increasing its benchmark interest rate from practically zero to almost 4.75 percent. The Fed has not indicated any intention to cut the federal funds rate in 2023, either – so what’s a spa owner to do?

Spa owners need to find equipment with the best maintenance programs included in the financing and initial purchase contract.

[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”2,4,6,7,5″ ihc_mb_template=”3″ ]

Despite all that, I am optimistic about the prospects for our industry more than even a year ago.  Here’s some practical advice to help you come out ahead.

With interest rates rising, it will be risky to have a wait-and-see attitude to replace aesthetic devices. Spa owners will need to find equipment with the best maintenance programs included in the financing and initial purchase contract. Those who wait in hope of lower prices may find themselves with higher expenses and risk enduring extensive downtime serving their customers. 

Routine maintenance will help your devices last longer and perform better. One of the biggest errors that spa owners make is not calculating the true cost of downtime. Five minutes here and there adds up!  With regular routine maintenance, the return on investment in an aesthetic device can be excellent. That means spa owners must find equipment suppliers and repair services with flexible options for maintaining and repairing aesthetics devices at every stage of their lifecycle to get the best performance. Check that the service warranty doesn’t push a single solution as a one-size-fits-all and be sure to get a cost estimate for any parts replacements and repairs so you can weigh the options of repairing versus replacing. Do not let a manufacturer’s representative convince you to accelerate replacing the device when repairs meet your needs.

Watch the length of the warranty. If a seller is only offering a 30-day warranty on a new or refurbished device, that’s a good indication that they don’t trust its long-term effectiveness.  Demand at least one to five years. If the manufacturer is confident in their equipment, you can be too.

Be clear on payment terms. Ask if you are getting a variable rate that may change over the course of owning the device. Find out the payout terms so you know your options. We’ve heard customers complain that sometimes they’ve used positive cash flow to pay off manufacturer or broker contracts, only to find out that pre-payment was not permitted — so they’ve either been levied penalties or have been liable for the sum of the full payment regardless. Trustworthy companies are transparent about the rate, are willing to be flexible with monthly, quarterly or annual payments, and won’t penalize you for paying ahead.  

Consolidate the number of manufacturers from which you purchase equipment.  It’s particularly challenging for small business owners to keep track of and understand the various known (and unknown) requirements for operating, maintaining, repairing and replacing the different devices needed to deliver treatments to their clients. To streamline your business, cut down on paperwork and ease your frustration, seek out a manufacturer-agnostic partner in 2023. In addition to providing a better customer care experience, a reputable full-service provider often can help you assess when it’s time to acquire an additional device – or replace an aging one — with technology that expands your spa’s services and suits your clients’ needs.

Look for contracts written in plain English. Warranties riddled with legalese should be a red flag. The fine print of contracts is often where costly provisions are hidden. Pay particular attention to shipping costs and methods, warranty timeframes, and whether repairs or replacements will be made. Do business with companies who want you to understand their terms so you can sign with confidence rather than concern.

Looking ahead means new goals and opportunities for business success. Look for flexible financing, transparent device maintenance, and a superior certification and warranty program to assure future performance and lower costs. Choose a provider that encourages collaborative relationships to help significantly enhance your practice efficiency, drive stronger profitability, and help your spa thrive. By all means, stay optimistic and consider innovative ways to prosper.