Med Spa CEO Podcast Summary

Podcast: Med Spa CEO
Host: Heather Terveen
Episode: How to Protect Your Profit as You Grow
Date: October 8, 2025

Episode Overview

This episode centers on a critical challenge for med spa and aesthetic practice owners: protecting and increasing profit margins while scaling their business. Heather Terveen draws from personal experience and data to illustrate how the business and operational models that serve solo practitioners well can inadvertently erode profits as owners add staff and diversify marketing. She provides actionable, system-based strategies to safeguard profitability during growth transitions, emphasizing the need for defined processes, offer structures, and accountability frameworks.

Key Discussion Points & Insights

The Profitability Trap of Growth

• The Reality of Small Business Failure

  • “50% of small businesses fail within the first five years. The number one reason is because they have a cash flow problem.” (00:00)
  • Many med spa owners see profit margins shrink as they scale from solo operators to small teams.

• Initial Growth Story

  • Example: Client started as a solo injector, very profitable with minimal overhead and referral-based business.
  • Upon expansion (new location, more staff), revenue increased but profit margins plummeted: “She felt like she was working like 10 times harder than when she was solo.” (04:40)

• Industry Data

  • Average med spa margins: 20–25% for solo operators, dropping to as low as 10% or less when scaling without systems (referencing AMSPA data, 2023).

The “Customization on the Fly” Pitfall

• Why Solo Operators Can ‘Wing It’

  • When referral-driven and hands-on, owners can personalize everything, lean into their “founder’s magic,” and maintain strong visit and lifetime values.
  • “You are able to handle consults in a way… you are able to actually get a pretty high patient visit value, average patient visit value, and then a really great lifetime customer value.” (10:10)

• What Changes When You Grow

  • As the team and marketing channels expand, relying on ad hoc, personalized approaches leads to profit erosion and inconsistencies.
  • Profitability slides downward on the “customization on the fly” model as business complexity increases.

The Need for Systems and Processes

• Critical Numbers: The Profit Engine Formula

  • Two main metrics to obsess over:
    • Average Visit Value
    • Lifetime Customer Value
  • “That is the formula that will add up to a profit engine.” (16:19)

• Why Systems Matter

  • Referencing McKinsey study: “Businesses with defined systems and processes grow 2.7x faster and with higher margins than those without.” (17:20)

Heather's Model: “The Model That Got You Here Won’t Get You There”

• Graph Explanation (Audio description of YouTube visual, 07:00–13:40)
  • Y-axis: Profitability from customization on the fly (profit margin %)
  • X-axis: Stages of business evolution (solo/referral, small team/light marketing, multi-channel/full team)
  • Key takeaway: Customization works when solo, but erodes margin as you expand unless replaced by systems.

Building Scalable Systems

• Three Core Elements Needed for Scaling Profits (23:20–25:45):
  1. Structured Offer Suite (Menu)
     • Move from generic services to branded, signature packages.
     • “Turn your basic menu into a branded high ticket signature offer suite your whole team can sell.” (02:50)
  2. Mapped Consult Process
     • Use a repeatable consultation roadmap so anyone can confidently lead and close higher-ticket clients.
     • Heather’s “CARES” consult system: Clarify, Affirm, Recommendations, Explain, Show.
     • “Gives everybody on your team the understanding of what should be said to whom and when.” (25:06)
  3. Consistent Team Accountability
     • Implement tracking and feedback systems (e.g., 30-day sales challenges, weekly tracking forms).
     • Importance of coaching teams through the discomfort of new habits.

Overcoming Implementation Hurdles

• Change Resistance is Normal

  • “It is human nature for you, for your team members to actually not want to implement something new because new habits take new energy.” (29:00)
  • Recognize and coach through resistance rather than blaming “mindset issues.”

• The Power of Tracking

  • Specific tracking can identify problems: “The problem is actually they're not even making the recommendation. That is 9 times out of 10, what's happening, right?” (34:40)
  • Use data to coach on specific gaps (e.g., out of 40 consults, how many followed the protocol?).

Leveraging Systems for Sustainable Profit

• The End Goal
  • Scaling should lead to increased average visit and lifetime values without sacrificing profit margins.
  • “We want that lifetime customer value to be going north. And then we also want the average visit value to go up at the same time so that we can ensure that we are profitable.” (44:30)
  • Systematized conversations give clients confidence and ensure consistency, leading to improved retention and upsells.

Notable Quotes & Memorable Moments

• On Why Systems Beat Magic:
  “When you are solo, you can get away with not having as many systems built into your business. But as you grow, you will have to actually—it will require a different sort of operating model.” (05:58)

• Data-Driven Wake-Up Call:
  “There was a McKinsey study that showed that businesses with defined systems and processes grow 2.7x faster and with higher margins than those without.” (17:20)

• The Implementation Struggle:
  “Inevitably where things start to break down…is that you get confused on how to actually implement this with your team. And it is a process, right? It is a new leadership opportunity for you.” (25:45)

• On Human Nature:
  “We seek pleasure, avoid pain and then we look for efficiencies, okay? That's the motivational triad. You have to know this is happening in the background for you and your team members when you try to implement a new operating system.” (31:05)

• Solving with Data, Not Guesswork:
  “You will see inconsistency across providers… two out of three folks don't have clarity on how you want it to be done. And this is why…Once you start implementing this system, we need to know, what problem are we solving for?” (37:00)

Key Timestamps

• 00:00–04:00: Intro, failure rates, client case study
• 07:00–13:40: Explanation of “The model that got you here won’t get you there” graph
• 16:19–17:20: The profit engine formula and the need for systems
• 23:20–25:45: The three core elements: menu, consult process, accountability
• 29:00–34:40: The roadblocks of new habits and human resistance
• 37:00–44:30: Using data to solve actual problems and the power of tracking
• 44:30–47:00: Wrapping up: achieving profitability through systematization

Final Takeaways

• Scaling a med spa requires evolving from ad hoc, founder-led operations to structured, system-driven processes.
• Protecting (and growing) profit margins means obsessing over average visit value and lifetime customer value—and building systems, processes, and accountability to move those numbers up.
• Successful implementation is a leadership journey that involves both creating structure and coaching teams through change.

For more visual explanations, check out Heather’s YouTube channel, where this podcast episode is also available in video format.