As the popularity of tattoos continues to rise, so does the number of people who change their mind - and for Sydney-based Think Again Laser Clinic co-founder and CEO Mike Anderson this presents a significant opportunity for his rapidly growing company.
Backed by major shareholder Clutch Capital, Think Again increased revenue by 30 per cent in the past year and is gearing for similar growth in 2024 for its network which currently comprises eight tattoo-removal clinics in Australia and New Zealand.
Anderson is aiming to more than triple in size to 30 clinics in the near term - a move that will be aided by Think Again entering the US market over the next 12 months.
“Thirty is a soft target for us,” says Anderson, the Think Again CEO and a winner of the 2023 Sydney Young Entrepreneur of the Year Award -Specialist Services.
“We’ll likely hit 20 in Australia and New Zealand but there’s nothing stopping us from establishing 50 clinics in America.”
Anderson, who co-founded Think Again Laser Clinic in 2014 with his now wife Chloe Anderson, has grown the business to be the second-largest tattoo removal brand in Australia behind Removery, a US-based group that is backed by private equity.
In a sign of how confident Anderson is in the opportunities ahead, he rejected a ‘tempting’ buyout offer from Removery in order to grow the business on his own terms.
Think Again’s expansion plans have stepped up in recent years following a 50 per cent investment in the company in 2020 by Clutch Capital, a move that saw the company grow from just two clinics to eight in the past two years.
“We are currently undertaking a testing phase for new clinics before a mass rollout,” Anderson tells Business News Australia.
“Traditionally we have done best at strip malls with street frontage on high-traffic thoroughfares, but currently we are looking at major shopping centres. We’re seeing how this testing goes before we structure our next 10 clinics.”
Despite having the capacity for rapid expansion, Anderson says the company is taking a measured approach.
“I have always been quite conservative, but the support we are getting from Clutch and their experience in growing a business has been invaluable,” he says.
Prior to Clutch coming on board, Think Again had expanded to just two clinics in the six years prior to 2020 with the business making its mark in the sector by using the latest in laser technology for tattoo removal.
“It’s not only the technology but it’s how that technology is used that sets us apart,” Anderson says.
“From the outset we got to understand the equipment and the science behind it. We developed our own training modules and did everything we could into testing and refining the process.
“With our system you can put in the type of tattoo and skin type to determine the best approach to get back to bare skin for each client. Data is very important to us, and we track that religiously, almost obsessively, to develop the best approach for each tattoo.”
Traditionally tattoo removals were done in beauty clinics which Anderson says may only see ‘five or six tattoos a week’.
“Typically, each of our clinicians treats about 50 to 60 tattoos a week and this has allowed us to learn at 10 times the rate of everyone else.”
Think Again has further enhanced its in-house training process with an online program developed to remotely bring new clinicians up to speed more quickly as the company expands.
Anderson founded Think Again after an unfulfilling, although lucrative, career in the mining industry. He ventured into the tattoo market after his brother had a removal done by a plastic surgeon who told him it would leave some scarring.
“I knew there had to be a better way and after researching the market we realised that the top technology at the time was not being used,” he says.
“I was looking for a way out of the mining industry anyway and used the money we had saved up to buy a house to start the business, got the highest level of training at the time and got to work.”
Once covered in tattoos himself before removing his ink ‘purely for professional reasons’, Anderson understands the motivations driving growth in the industry.
“My body was basically covered from the neck down and I have now removed all of them, except for one,” Anderson says.
“Even in this industry you still feel judged, especially when you go to a boardroom meeting. In these situations, you can either comply with that or fight it to get a lesser result.”
The most common reason people want to erase tattoos is simply a ‘change of mind’.
“We get some crazy stories but there are others that are more touching. In some cases, someone wants to remove the name of a partner who has become abusive.
“But 90 per cent of what we do is people who have one or two tattoos and decide that it’s not for them anymore and want them off.”
Typically, laser treatment costs between $1,000 and $3,000, or 10 times the cost of getting inked.
“You have to consider that the cost of a tattoo is just the ink and a needle, whereas the cost for us is $300,000 worth of equipment and specialist staff,” Anderson says.
The rise of tattoo take-up is expected to continue for the next five to eight years, which Anderson says gives Think Again scope for further growth.
“This is about the lifecycle of a tattoo; seven or eight years after getting a tattoo people are likely to want it removed. So, realistically, we have 10 years to expand to further capitalise on this market.”
Anderson concedes Think Again will need to ultimately corporatise its systems to manage the planned growth, but he is keen to maintain the ‘mum and dad’ business approach that has served the company well over almost a decade.
It’s not uncommon to see Anderson on the tools in a clinic when needed, and he notes that staff retention has been a strength of the business since it was founded.
“We’ve only lost one staff member through resignation over the past nine years and, outside of that, we still have everyone from our original staff,” he says.
“The cost of training each new staff member is around $30 000, so we invest a lot of time, effort and resources into training, and it is one of our keys to success.”
To enhance staff retention and improve the profitability, Think Again has adopted a profit-share model for key staff.
“They can each buy a part of the clinic, which our equity partner will fund for them and that they can pay it off through their dividends. We try to give staff every reason to stay, and we think this is really sustainable approach to growth.”
A joint-venture model for its New Zealand is also reaping rewards with Atlanta Zambucka, an entrepreneur that Anderson says he sees ‘a lot of myself in’, taking a 20 per cent interest in operations there.
“You get 100 per cent more effort for that 20 per cent equity and the growth in New Zealand has been exponential for us compared to any other clinic,” he says.
Think Again currently has just one clinic in New Zealand but is looking to open another soon.
A franchise model is not on the cards for the business, with joint ventures the most likely path to growth in key markets.
'No shortage of investors'
While there is ‘no shortage of investors wanting to throw money at the business’, Think Again is also not in the market for any new capital.
“We’re a cash positive business and that puts us in a good position to sustainably grow,” Anderson says.
“We are now trying to get the balance right to ensure growth without the need for a capital raise.
“Traditionally we have rolled out a single clinic at a time and, to remain risk averse, we used to wait for that clinic to become profitable before rolling the next one out.”
But with private equity behind it the pace of expansion is on the rise. After opening six clinics in the past two years, Think Again plans to target six new clinics a year, with much of that coming from international expansion over the next few years.
Anderson describes the investment by Clutch Capital as ‘life changing’ giving the group the necessary funding to pursue his ambitions for the group.
“With the tattoo industry still growing significantly, it has given us the assurance that we can be a bit more aggressive in our expansion plans in future,” he says.
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