From key performance indicators (KPIs) to balancing competitive pricing with profitability, this episode dives into the complexities of running a successful MedSpa business. Listen in to learn how consistent, reliable data can help you predict your inflow and outflow, and discover strategies to avoid common pitfalls. Whether you're just starting out or looking to optimize your financial approach, this episode is packed with insights to help you thrive.
What You'll Hear:
- The financial challenges unique to MedSpa owners.
- Key performance indicators (KPIs) for MedSpa businesses.
- Strategies for balancing competitive pricing and profitability.
- The importance of reliable data in financial planning.
- Common pitfalls MedSpa owners should avoid.
- How inflow and outflow expectations can be managed.
- The impact of underpricing and capacity issues.
- The parallels between MedSpa owners and ER doctors in financial planning.
- What to expect from future episodes of MedSpa Money Matters.
Tags:
medspa owner, aesthetics, injector, wellness, weight loss, fractional CFO, bookkeeper, tax preparation, financial advisor, accountant, wealth management, payroll, insurance, retirement planning, investment management, insurance, 529 planning, estate planning, cash flow planning
Share The Love:
If you like MedSpa Money Matters…
Never miss an episode by subscribing via Apple Podcasts, Spotify, Amazon Music, or by RSS!
Read The Transcript:
Say goodbye to financial guesswork and hello to a thriving MedSpa business. This is MedSpa Money Matters, the podcast that helpsMedSpa owners like you take control of your finances with confidence. This podcast is hosted by MedSpa Financial, a fiduciary financial planning and tax firm that helps MedSpa owners across the country.
I'm Jonny McMullen. With me is the founder and financial wizard of MedSpa, Scott Wisniewski. We're here to simplify the numbers so you can focus on what really matters: your patients and your business. With that, let's get started.
Scott Wisniewski: All right. Welcome to episode one, the pilot episode of MedSpa MoneyMatters, and I'm your host, Scott Wisniewski, and joining me is my co-host, Jonny McMullen.
Jonny McMullen: Hello.
Scott Wisniewski: So we're gonna start with a brief introduction to us, our background, and what we hope to accomplish with this podcast. We're based here in Dallas,Texas. We both grew up here and Jonny and I actually went to the same high school. I was a grade above his and we met playing soccer and both played soccer in college at different universities across the country.
While in college, we both went the finance route and reconnected about 15, 16 years ago and have been serving the financial needs of mostly emergency physicians across the country since then. And we handle our professional duties in not only a fiduciary manner, which means that we have a legal interest to do what's best for you, not what's best for us, but also in a holistic manner. Meaning we take care of and advise on essentially everything with the dollar sign around it within our client's lives or financial lives.
Jonny McMullen: Right. Yeah. And that would include things like financial planning, which could encapsulate something like retirement planning or how much money will you need to reach your goals and what are your goals and what kind of lifestyle do you want and what are the risks that you should be aware of preventing you from achieving those goals and achieving that lifestyle? And how much should you be saving and aware, I mean, not only account types, but how those account types are invested aka how are you allocating your portfolio?Then there's tax preparation and minimization of tax and those strategies and tax filings, payroll for businesses, also insurances from disability to life, to property, to an umbrella policy and really anything and everything in between.
Scott Wisniewski: Right. So to kind of recap, we do financial planning, investment management, which investment management would be setting up retirement accounts, investing those assets, figuring out the types of accounts to set up, the amounts to contribute to each, and then all the financial planning elements, which would be insurance planning, estate planning, cash flow planning, debt management, 529planning, retirement planning, probably leaving some off there.
And then you get into our tax related capabilities, which would be helping to set up companies or entity selection, full bookkeeping. This could be light or heavy bookkeeping is what we call it. Payroll, obviously all the tax preparation, tax planning, tax advising, and then insurances and insurance planning.
So that's the full spectrum of what we can do. And how we got here, speaking to MedSpa owners, is first, we see a similar gap in financial knowledge when it comes toMedSpa owners as we did with our physician clients. No knock to either profession, actually a good number of our ER doc clients actually have becomeMedSpot owners, which made this a pretty natural transition for us.
But while many, if not all of the same areas of personal finance apply to MedSpa owners as they apply to ER docs, there's also a very broad business layer that is equally complex to solve for and get help with. Obviously, there are KPIs or key performance indicators that will need to be analyzed, evaluated and acted on pertaining to the business, things like client retention rates, staff metric from sales to hours worked, hourly goals, percent booked and retail sales rates. There's turnovers, there's company incentives, there's taxes, payroll packages, commissions, equipment, employees. There's all, you know, real estate buildings. There's a whole host of additional complexity and layers to running a MedSpa that are far beyond what the typical physician or ER doc deals with.
And all of these need to be intimately understood for your business in order to optimize and thrive either by yourself or through the help of a dedicated team that's going to distill that information and present actionable items from it.
Jonny McMullen: Yeah, that's well said. So what can you expect from listening to this podcast? Well, you can expect a hopefully very concise and clear topic based on likely financial pain points or opportunities that you may be experiencing or have. That's our goal is to always be relevant with information and be specific with the information. It could be legislative changes to the tax code.
It could be making you aware of certain deadlines. It could be something in the realm of what Scott mentioned, maybe a particular KPI that we're seeing the most successful practices hit or reach, or how much should you be paying yourself oran SD or an RN or NP, or should you be looking to hire a certain category of help and when to do that, but also personal finance areas as well, involving retirement planning and benefits.
So there is much to talk about and we, of course, are always open to hearing your questions. You can reach out anytime to info@medspafinancia.com and let us know what would be something you'd like for us to discuss or something that you'd like to hear us discuss.
Scott Wisniewski: Jonny, ever heard this one? MedSpa owners work hard for their money, but is their money working hard for them?
Jonny McMullen: Sounds like a missed opportunity if it’s not.
Scott Wisniewski: Exactly. That’s where we come in. We helpMedSpa owners maximize profits, plan for the future, and make their money work as hard as they do.
Jonny McMullen: So it’s like putting their finances on a results-driven treatment plan?
Scott Wisniewski: Exactly. MedSpa owners, let’s work some magic on your finances. Book a call today at medspafinancial.com.
Scott Wisniewski: Yeah, it could be just a random question you have as you're operating your practice. And we plan to keep the episodes pretty content rich, meaning very structured, number one, because finance is a topic that often requires a lot of structure to discuss, especially when numbers and scenarios are involved, but also number two, we think if you're turning in, you're wanting to learn something.
You're not tuning in necessarily for pure entertainment because we're not very good at that like you would for a podcast hosted by like a comedian, as an example, even thoughJonny is pretty funny, but I'm not.
Jonny McMullen: Oh, thank you.
Scott Wisniewski: Yes, Jonny and I, we will banter from time to time, but we want episodes to be very approachable and to the point. Likely not extending beyond 30 minutes, ideally. That's really it for the introduction to episode one. Jonny, do you have anything else that you'd like to add?
Jonny McMullen: So our plan is to release an episode once a week and we plan to stick to that. We'll host our episode on our website medspafinancial.com/podcast. We'll also be sending out a weekly email blast providing a short text summary of the episode content, the title, as well as the link to the website where you can listen from wherever you get your podcasts, Spotify, Apple Music, et cetera.
Scott Wisniewski: Yeah. And now that we've gone over an overview, we can talk about a few specific areas we have noticed most med spot owners need to focus on as these are general pitfalls. And the first is really obvious, just being able to manage cash flow. We talk about this often is visualizing and understanding the data that makes up your cash flow is probably the most vital aspect of being a successful owner. And as a MedSpot owner, there's generally variability in income that many other businesses typically don't experience.
There's absolutely going to be high months and low months with a strong seasonal demand bias. And when you combine this with high fixed costs, even profitable businesses may not be profitable in individual months. So you'll want to ensure you have an understanding of the flow of your money, inflows and outflows, and ability to forecast the plan for revenue cycles and dips, promotions, things like Black Friday, all of November, and of course having cash reserves or liquidity on hand for those months.
Jonny McMullen: Yeah, and that variability doesn't necessarily equate to needing to be unpredictable or unpredictability. You can and should be building in your inflow and outflow expectations month to month. And ideally this is based on consistent and reliable data. Obviously, the earlier you are in your business, the more that data relies on assumptions, but once you accumulate reliable data, it's vital to use it effectively and plan for potential cash flow strains.
So a proper cashflow plan touches on all of the fixed expenses and plans for the uncertain and variable ones. Maybe the AC unit goes out or a laser device, you have an older, cool sculpting machine and we'll need to update this at some point in the year.So planning for that and when those transactions could happen or will need to happen by, especially given seasonal revenue fluctuations.
That's a key point in why cash flow plans are necessary. Just make sure you are limiting the uncertainty of your business when it comes to the books as much as you can.It's probably the best thing you can do. And I know we'll be going into a lot more detail on the episodes to come on this.
Scott Wisniewski: Yeah. Another challenge for MedSpa owners is balancing competitive pricing with profitability. Most of you will probably find this is a very competitive industry that continues to grow. You have to offer appeal beyond what competition offers in various ways. Pricing is often the first place business owners look.
“I'm going to be the most affordable option for my area” could be your outlook, but that can create its own challenges. You may be inadvertently creating new problems, especially when it comes to capacity and availability and scale. You can be booked solid and still be running a failing business if the pricing isn't right.
That gets back to the cash flow planning as well. Sort of a theme we'll discuss is all roads will lead back to the cash flow plan. Reverse engineering, fixed costs, variable costs, and rainy day savings to arrive at pricing per treatment or procedure is going to be more effective than simply undercutting or copying the competition.
That competition may not be financially as healthy with their prices as they seem to be on the surface so you don't want to mimic a failing business. Even if you price services above others, there are other value propositions that can justify that such as convenience, service, experience, state of the art equipment, relationships, just general experience. These are all areas where you can distinguish yourself from others.
Jonny McMullen: Yeah, and there are many strategies that appeal to consumer psychology as well that can be utilized with things like memberships and loyalty programs, referral incentives, upselling, even creating an ecosystem of products and service offerings.
All of this can help smooth out revenues, add predictability, and ultimately it's going to ideally create retention. Also focusing on higher margin services, right?Injectables as an example, versus something like microdermabrasion or facials.That could be worthwhile. While of course it's still important to keep both and have a balance, but maybe focusing or marketing towards a certain one or the other can be more lucrative because it can be easy to accept any and all business, right?
Especially in the early stages, but this can lead to quickly hitting capacity with maybe the wrong volume of specific services, especially with lower margin services, and the same is true with what way you referenced, right? Missed pricings and underpricings. So it's all about striking that right balance of price with profitability and competition. And that's a skill that definitely needs evaluation. And again, that can only be done through proper cash flow planning and objective, honest data.
Scott Wisniewski: Right. And in order to have that data, right, you need a system or a template or a format to host it or build it, right? And we're going to get into this. And to other episodes, but it's really like good financials, good balance sheet, good profit and loss, good books, good bookkeeping, but also how to interpret those numbers and that data. So with that said, that's really only a couple of areas we're addressing here with so many others to get into. Think debt and financing, marketing, technology, employees, equipment, investments, staffing, decisions, regulatory compliance, tax compliance, we'll be addressing all of these in more and upcoming episodes. So there's much to talk about and we look forward to hopefully helping add value and insight to your business.
If you have any questions or you’re ready to work with us, head over to medspafinancial.com and click the“Book Free Call” button.
Thanks for tuning in, and we’ll see you next time on MedSpaMoney Matters.
Disclaimer: This podcast is recorded and made available by MedSpa Money Matters and is provided for general informational purposes only. The content discussed does not constitute accounting, legal, tax, financial, or any other professional advice. Listeners should not act upon any information presented in this podcast without consulting an appropriate professional.
