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The Business Case for Cold Plunge Therapy

Cold Plunge Therapy, also known as an ice bath or cold water immersion, involves submerging the body in ice-cold water for a specific duration. While primarily associated with sports recovery and injury rehabilitation, ice baths have gained popularity beyond athletics. In this article, we will explore the business case for cold plunge therapy and what the return on investment may look like for your business.

Why Cold Plunge Therapy?

Why has this therapy gained popularity and why are your clients looking for this service?

 

  1. Health Benefits: Cold exposure has been linked to improved circulation, reduced inflammation, increased metabolism, strengthened immune system, enhanced mental clarity, and improved sleep quality. 
  2. Enhanced Recovery: Cold plunges are commonly used by athletes and fitness enthusiasts as a tool for enhancing post-workout recovery as it helps reduce inflammation, muscle soreness, and swelling, facilitating faster recovery and improving performance. 
  3. Mental Resilience and Stress Reduction: Cold exposure is known to activate the body's stress response and promote the release of endorphins, which can contribute to improved mental resilience and stress reduction. 
  4. Wim Hof Method: The popularity of cold plunges has been fueled, in part, by the rise of the Wim Hof Method. Wim Hof, also known as "The Iceman," developed a method that combines cold exposure, breathing exercises, and meditation to enhance physical and mental well-being. His method, which includes cold showers or ice baths, has gained a significant following and increased interest in cold water immersion.
  5. Social Media and Influencers: The widespread use of social media platforms has played a role in popularizing cold plunges. Influencers and celebrities often share their experiences and promote the benefits of cold water immersion, generating curiosity and driving interest among their followers.
  6. Cultural and Historical Practices: Cold water immersion has been a part of various cultural and historical practices, such as traditional Scandinavian saunas and Japanese cold-water baths (e.g., the practice of "shinrin-yoku" or forest bathing). The resurgence of interest in these traditions has contributed to the popularity of cold plunges.

Which Businesses Should offer Cold Plunge Therapy?

So, what sort of businesses may have a use for cold plunge therapy?

  1. Sports Performance and Recovery: Ice baths are commonly used by athletes to aid in recovery after intense training sessions or competitions. The cold water helps reduce inflammation, muscle soreness, and swelling, promoting faster recovery. As a business, offering ice bath facilities can attract sports teams, professional athletes, fitness enthusiasts, and individuals seeking post-workout recovery options.
  2. Wellness and Spa Services: Ice baths have gained popularity in the wellness and spa industry. Many people are now seeking alternative therapies for relaxation, stress relief, and improving overall well-being. By incorporating ice baths into your spa or wellness center, you can provide a unique and refreshing experience for your customers, complementing other services such as massages, saunas, or hot tubs.
  3. Injury Rehabilitation: Ice baths are also used in physical therapy and rehabilitation settings to aid in the recovery of certain injuries. Cold water immersion can help reduce swelling, improve circulation, and manage pain associated with various musculoskeletal conditions. Offering ice bath facilities in a rehabilitation center can attract patients who require these specialized treatments.
  4. Health and Wellness Facilities: As the focus on health and wellness continues to grow, incorporating ice baths into fitness centers, gyms, or health clubs can be an attractive selling point. It adds variety to the facility's amenities, offering customers an additional tool for recovery and a unique experience that sets your business apart from competitors.
  5. Recovery Centers and Cryotherapy: Ice baths are often associated with cryotherapy, which involves exposing the body to extremely cold temperatures for short durations. Some businesses specialize in cryotherapy services, providing cold therapy options such as whole-body cryotherapy chambers and localized cryotherapy. Including ice baths as part of a cryotherapy center can broaden the range of services available and cater to different customer preferences.

Return on Investment

Now, when thinking about adding cold plunge therapy as a service, or exploring a new business venture, it's essential to consider the upfront investment costs, compared to the expected cash flows that will result from the sale of the new products or services. It is also vital to consider the operational effect that adding this service will have on your business.

So how do you calculate the return on investment (ROI) of an Ice Bath or Cold Plunge service? For this analysis, we will use the Morozko Pro Ice Bath since we believe it is the best commercial tub available.  The simplest way to analyze the ROI is called the "payback period".

Measured in units of time, it answers the question, "How long will it take for my profits to equal my initial investment?"

For a business selling whole-body cold water immersion as a service, the simple payback period on a Morozko Pro is less than six months.

Let's go through the calculations.

 

Capacity

"How many people can plunge per day?" 

To answer that, we need to get an estimate of how many minutes of plunge the Forge can handle every day.  A typical plunger coming straight from an infrared sauna into the Forge will add about +0.5F/min to the water temperature. So a 3-minute plunge might raise the water temperature by 1.5F (or melt an equivalent amount of ice).  We call this the "thermal load."

By contrast, the Morozko Pro can cool water at a rate of about -1.5F per hour. We call this the "cooling capacity."

When we divide the cooling capacity by the thermal load, 

The answer is 72 total minutes.

 

Revenue

To translate 72 minutes of the plunge into daily revenue, we have to have a sense of how much each customer is going to pay.

A great comparison is Cryotherapy.  This therapy is expensive because the machines that release liquid nitrogen into the cryo-chamber cost about $100,000. But cryotherapy does give us a sense of how much customers will pay for a whole-body cold exposure experience.

$40/session is a conservative estimate. Some cryo centers charge more, but they all offer package discounts.

So let’s assume charge $40 for a 3 min plunge, but we make a conservative allowance for package discounts and unsold plunge slots so that we only collect 50% of our price target.

That's $20 per 3-minute plunge, which is good value to customers, considering the myriad health benefits of cold exposure.

That makes our revenue $480/day.

 

Profits

To calculate marginal daily profits, we must subtract operating costs from daily revenues. These costs include rent to pay for the facility housing the Forge, electricity to power it, and the labor costs necessary to pay an attendant.  Without proper data for your business, it is hard to calculate that but let’s assume 50% of revenues as an estimate (which is likely high).  This means our marginal profit is $240/day.

 

Payback Period

Now that we have all our calculations, we can calculate the Payback Period.

Assuming the business is open 5 days per week, we can expect the full price of the Forge to be paid off in less than 75 days. Less than four months.

 

Best Practices

The Forge's economics works best when combined with other treatments. Those could include physical therapy, acupuncture, sauna, compression, chiropractic, yoga, or any number of additional health modalities.

The point of the calculation is really to help medical and wellness service providers think about the economics of adding whole-body cold immersion to the services they already provide.

 

Why do we recommend the Morozko Forge Pro Ice Bath?

 

The Morozko is different from standard cold plunges, cold tubs, or cold showers as this unit actually makes its own ice and maintains freezing temperatures.  Morozko Forge has built-in water circulation and micro-filtration, and we use ozone disinfection to keep the water crystal clear 24/7. It has built-in water filtration and ozonation, which is particularly important for commercial use (and your local health department).  You need to physically add ice for most standard ice baths, so they tend to be a one-time use thing and an operational nightmare for a business.  

As you can see, adding Cold Plunge Therapy to your business is a great way to not only provide your clients with an impactful treatment and boost your revenue by over six figures per year.  

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