Podcast Summary: Med Spa Success Strategies

Episode Title: Better Financial Planning & Management For A More Profitable Med Spa – Interview with Jessica Nunn
Host: Ricky Shockley
Guest: Jessica Nunn, Founder and CEO of Maven Financial Partners
Release Date: June 12, 2024

Introduction

In this episode of the Med Spa Success Strategies Podcast, host Ricky Shockley engages in an insightful conversation with Jessica Nunn, the founder and CEO of Maven Financial Partners. The discussion centers around effective financial planning and management strategies tailored for med spa and aesthetics practice owners aiming to enhance profitability and achieve greater financial freedom.

Jessica Nunn’s Background and Maven Financial Partners

Jessica Nunn begins by sharing her professional journey:

"I'm a recovering CPA. I started my career doing tax returns and preparing financial statements for small business owners and realized that’s not actually that much fun." [00:56]

Transitioning from traditional accounting roles, Jessica founded Maven Financial Partners with the mission to provide strategic financial advice to small business owners, particularly those in the med spa industry. She emphasizes the importance of transforming complex financial data into actionable strategies that drive business growth and profitability.

The Importance of Financial Planning for Med Spas

Ricky highlights a common challenge among med spa owners:

"Most of you listening to this... most likely it's because you don't know your numbers and you're not confident in the decisions you're making financially." [02:03]

Jessica concurs, underscoring that even profitable practices can either maintain or enhance their success through better financial awareness:

"We promise to make you more aware so that you can make either better decisions to make more money or at least know why it's going well and what to continue to do." [03:04]

Roles: Bookkeeper, Accountant, and CFO

A significant portion of the discussion revolves around differentiating financial roles within a med spa:

• Bookkeeper: Maintains day-to-day financial records.
• Accountant: Prepares financial statements and ensures compliance.
• CFO (Chief Financial Officer): Provides strategic financial guidance to drive future growth.

Jessica elaborates:

"A CFO... takes your business finances, all the numbers, and uses it to make forward-looking strategy." [05:53]

She notes that many practices mistakenly believe that having a bookkeeper or accountant suffices, while a dedicated CFO can offer deeper strategic insights.

Financial Analysis of Med Spa Practices

Upon onboarding a new client, Maven Financial Partners undertakes a thorough review:

"We're going to get access to either your QuickBooks file or whatever it is that your accounting belongs to... we're also going to log into your practice management software." [08:02]

This dual analysis of financial statements and operational data allows Jessica and her team to create a comprehensive financial roadmap tailored to each practice's unique needs.

Common Financial Challenges

Jessica identifies two primary areas where med spas often overspend:

1. Payroll: Difficulty in managing staffing costs due to high demand and competitive salaries.
2. Inventory (Consumables and Supplies): Especially significant for practices heavy on injectables and other consumables.

She explains:

"Payroll and inventory, especially for med spas that are heavy on injectables, are... often the biggest opportunities." [10:26]

Additionally, rent can become an issue if practices expand beyond their financial capacity, though this is less common.

Strategies for Enhancing Profitability

To bridge financial gaps, Jessica advocates for a balanced approach:

• Optimizing Revenue: Ensuring that providers are as productive and efficient as possible.
• Managing Expenses: Keeping a tight rein on payroll and inventory costs without compromising service quality.

She emphasizes the importance of setting clear financial goals based on historical data:

"We're budgeting out every line item in that P&L so that we know exactly where the money's coming from and exactly where it's going." [34:12]

Financial Planning and Budgeting

Jessica outlines Maven's approach to budgeting, which involves:

1. Defining the Client’s Vision: Understanding the long-term goals of the practice.
2. Mapping Revenue Goals: Estimating future performance based on current data.
3. Budgeting Expenses Accordingly: Allocating funds to staff, supplies, marketing, and other operational costs to meet revenue targets.

"We're not just saying, hey, the practice should do $100,000 next month. We're saying who's going to do what and how to get us there." [33:39]

Managing Debt and Credit

A critical aspect of maintaining profitability is effective debt management. Jessica advises against relying on high-interest credit cards for business expenses and recommends consolidating debt into more manageable loans:

"We work with clients to consolidate that into a bank loan with like normal 7 to 10% interest and term it out where you're paying it over five years." [29:18]

This strategy helps practices stabilize their cash flow and reduce financial stress.

Recommendations for Equipment Purchases

When evaluating the addition of new devices or services, Jessica stresses the importance of ensuring profitability:

"How much is it? How will you pay for it? How will you market it? How will you make sure that you're actually using it?" [23:00]

She advises incorporating equipment payments into the overall financial strategy rather than hastily depleting cash reserves.

Maintaining Profitability and Performance Metrics

Jessica introduces key performance indicators (KPIs) essential for sustaining high performance:

1. Revenue per Hour: Ensuring that providers are generating sufficient income.
2. Patient Flow: Maximizing the number of appointments without compromising patient satisfaction.
3. Expense Management: Continuously monitoring and optimizing costs related to payroll and supplies.

"Providers are very productive... they're very efficient with their time, their prices are high or healthy." [38:53]

High-performing practices typically enjoy both strong revenue generation and disciplined expense management.

Balancing Patient Satisfaction with Financial Efficiency

Ricky raises the concern of maintaining patient satisfaction while striving for financial efficiency. Jessica responds by emphasizing the need for tailored strategies:

"It totally depends... on how your team is structured and how you're building your practice." [40:16]

She advocates for individualized approaches to scheduling and appointment management to ensure both profitability and a positive patient experience.

Final Advice and Conclusion

Jessica concludes by acknowledging that financial planning can be daunting for practice owners. She encourages embracing financial analysis as an essential tool:

"The more and more that you look at your numbers and you get comfortable, you'll get more comfortable with it." [42:22]

Host Ricky reinforces the importance of facing financial realities head-on:

"Ignoring them is not going to make the situation better... looking at the bank account doesn’t make it go away." [43:20]

Key Takeaways

• Understand Your Numbers: Comprehensive knowledge of financial statements is crucial for making informed decisions.

• Differentiate Financial Roles: Beyond bookkeepers and accountants, a CFO can provide strategic guidance necessary for growth.

• Manage Core Expenses: Focus on optimizing payroll and inventory to enhance profitability.

• Strategic Planning: Develop detailed financial plans that align with your practice’s long-term vision and goals.

• Debt Management: Consolidate high-interest debts to ensure sustainable cash flow.

• Performance Metrics: Regularly track KPIs such as revenue per hour and patient flow to maintain high performance.

• Embrace Financial Analysis: Overcome initial discomfort with financial planning to leverage it as a powerful tool for business success.

For More Information:

Visit Maven Financial Partners' website at MavenFP.com and follow them on Instagram @MavenFinancial for additional resources, videos, and updates on best financial practices for med spas and aesthetics practices.