The Best (And Worst) Financial Habits of Aesthetic Practices

Announcer (00:06):
You are listening to the Aesthetically Speaking podcast presented by Nextech.

Robin Ntoh (00:11):
You're listening to the Aesthetically Speaking podcast presented by Nextech. I'm Robin Ntoh, and we are coming to you live from the Med Spa Show here in Las Vegas. So excited to be here, and it's at the beautiful Wynn Hotel. And today I have Jessica Nunn with me here today from Maven Financial.

Jessica Nunn (00:28):
Yeah.

Robin Ntoh (00:28):
So excited. You're here today, Jessica.

Jessica Nunn (00:30):
Good morning.

Robin Ntoh (00:30):
I know. Good morning. And we're here early too.

Jessica Nunn (00:32):
Yes, we did it.

Robin Ntoh (00:33):
I know 10:00 AM We had that great party last night.

Jessica Nunn (00:36):
Yeah. And we are still here.

Robin Ntoh (00:37):
And we are here.

Jessica Nunn (00:38):
With the stamps as proof.

Robin Ntoh (00:39):
Exactly. And what a party. I did that last year and I had forgotten the vibe and the energy and the colorfulness of it.

Jessica Nunn (00:47):
Yes.

Robin Ntoh (00:48):
But it was good. It was really great.

Jessica Nunn (00:49):
Very exciting.

Robin Ntoh (00:50):
It was fun to see everybody. I have had the opportunity to spend some time with you at other meetings, some of your associates, people that work with your business. And I've always admired the way that you have inserted yourself into this industry. It's fascinating. And who would've thought that the need was so relevant? The thing that we've learned and that we've seen over the years is financially people just don't really understand, let alone how to financially manage your business, let alone the business side of it. And so you bring this great level of expertise, a fractional CFO. Who would've thought that they would need a CFO, especially when they're a small business. But the concept of fractional CFO, it's fascinating. Let's talk about first, what is a fractional CFO, and then let's talk about how you actually had this vision to open this business?

Jessica Nunn (01:44):
Yeah, so it's so funny. I tell people a lot that I actually never had a vision to open a business. Friends would always tell me, you should start your own business. And I was like, it sounds like a lot of work. I'm not going to do that. But eventually it came to be, and I was a CPA by trade, so I prepared tax returns, worked with clients, helped them understand their business. And that's what I really loved about that position was talking with the business owners, giving them relief whenever I explained something that they had never understood before, that is so rewarding. And people's businesses is like their baby and they put so much energy, so much love into it, and I can imagine the frustration to not really have a grasp of what's going on financially. So I realized that that was actually truly my passion. I mean, people are really lucky when they have a job that they love so much, and we all just love this so much. It is the most fun helping these business owners really get clear about where they're headed, where they're going, what they need to do to be more profitable, most importantly, to teach them business.

(02:44):
They'll say, I've learned so much about business from you and you've changed my life and I wish I would've found you so long ago. So that's kind of the why and our passion around it. But what we actually do, the easiest way to say it is business owners will usually have some accountant of some sort. So they'll have somebody that is preparing their QuickBooks, somebody that's doing their taxes. And what happens is business owners want to talk to somebody. Either they're struggling or they're doing well, or they have an opportunity to do something different or they're not sure what they should do next. And it's kind of lonely running a business by yourself. If you don't have a partner, you can't run out and ask your team, Hey guys, cashflow's really tight. I hope we can make payroll. That's not really the best.

Robin Ntoh (03:30):
No.

Jessica Nunn (03:30):
So oftentimes they'll call their CPA and they'll say, Hey, I have a question about how should I pay this provider? Or is it time for me to bring on another provider? Or Hey, should I invest in this device? What have you heard about it? Am I going to get an ROI? Or Hey, what do you think about my marketing spend? Is it about what others are spending? Or are my consumables too high? How are my prices? And the CPA is like, well, I don't know. That's not really my expertise. I can talk to you about how much you're spending on these things, but they don't really necessarily know if it's the right direction or the right strategy for you. This is what we do. We help people make strategic financial decisions based of course on their financials, on their KPIs. That's where our relationship with Nextech is so good because our team lives in Nextech pulling out all the data, pulling the KPIs, helping the clients see exactly what their provider performance is, exactly what their practice is doing in terms of performance and patient visits and all the things that make revenue tick.

Robin Ntoh (04:33):
It's fascinating. So you've seen a lot in this world, I'm sure in the few years that you guys have really grasped this industry and just really gotten a hold of it and the findings and things that you've seen. I mean, I'll go back and say some people may not even have a CPA.

Jessica Nunn (04:49):
Oh, it's true. It's true. Especially on the bookkeeping side. And that was we were talking about the best things that a med spa could be doing right now, the top five best things and one of the worst things, and I was really thinking that the worst thing, the two worst things in our opinion that a practice can do, number one, have somebody in the office, the office manager or a friend or a spouse, be the accountant and do the QuickBooks. So they'll oftentimes providers and practice owners think that their office manager can do the QuickBooks because they know how to code the transactions. But the reality is then your financial statements are not accurate. So we have that all the time. We start working with a client and they're like, well, my office manager will send over the financials and we look and we're like this, there's so much wrong here. We had one recently. I was like, Hey, these show that your checking account has $189,000 in it, negative, negative 189. Does that sound right? Does that sound right? I don't think so. Right. So if that's wrong, what else is wrong? Something else is wrong. So that's the number one mistake you have to have an accountant doing your accounting. The second thing is you have to use your EMR correctly. You just have to, right.

Robin Ntoh (06:04):
Great call out. I'm not going to disagree with you on that.

Jessica Nunn (06:06):
You just have to. And why is that? That's because the way that we get information and the way that we understand how successful practices are is by looking at those two things. So of course we care about that stuff, right? I am sure there's things clinically that are very important, and I'm sure there's things with the team that are very important, but we're focusing on the financials. So that's what we care about.

Robin Ntoh (06:26):
So let's talk a little bit about the data, because this is all hinging on the data. Those top two things, garbage in, garbage out. There's risk associated with that. You let someone do it for months and months, years, and then people wonder why they can't understand their business. They can't understand how they prepare for the future. Do I want to be bought? Do I want to go into the private equity world? Do I want to add a partner? Do I need to have their location? And if they're living by the seat of their pants and just looking at the day-to-day and not the trends, how do they understand what's coming?

Jessica Nunn (06:59):
Well, when we ask that, right? We'll say, gosh, your financials, they've just never really been in great shape and you're not even looking at the reports from anything. And they'll say, well, you know what? I look at the checking account and if it has money, I assume things are okay. And that's flying blind. And we always talk about what's the best vacation you ever had? You're going to Italy, you're going to wherever you're going. Did you just show up or research it a bit? Did you think about it? Did you look into what are the things to do in Italy? What can I do? Let's plan a hotel. Let's book a reservation. Let's book a flight. Let's think about, you need to have enough data so that you can make plans for your business. Otherwise you're just showing up. I don't know. What are we going to do? Let's figure it out day to day.

Robin Ntoh (07:49):
Amazing. Okay. You've given us two things. What are some of the other things that you must do when you think about those top five?

Jessica Nunn (07:57):
Okay, I was thinking of the top five must dos. Number one kind of correlated to the don't, right? But you have to have good financials and you have to look at them and they have to be current. So we offer a complimentary financial assessment for practices.

Robin Ntoh (08:12):
Fabulous.

Jessica Nunn (08:13):
Everyone wants their financials looked at, we're happy to do it for free, and they'll say, Hey, send us your financials. Let's take a look together. And they'll say, great. I have 'em from 2023. Cool. I'll tell you how you did in 2023, but we're in 2025, so you really should be looking at the financials from last month. We should have all the way up to last month so we can see what happened last month. So we can understand the trends. Again, they need to be prepared by an actual accountant. Let's make sure that what we're looking at is correct before we're just guessing.

(08:41):
So good data, we got to have good data and we need to look at it. So let's figure out a way to make it make sense so that it makes it not frustrating to look at it. Number two, the second most important thing, a lot of it is, but what's happening is that we're diagnosing the problems of the practice with the finances. And then we're trying to think operationally, what might fix this? What are the best practices and the most profitable practices? What are some of the things that they're doing? Your financials are helping you understand the symptom. Cash flow is like there's a reason that that's a problem, that's a symptom, right? But what's the true reason? Let's get to fix that. So a couple of things that is coming up in all of our meetings right now is number one, paying providers appropriately.

(09:27):
So I remember I was in another live session like this and someone in the audience raised her hand and she was like, so if I have my providers on a 35% of revenue bonus structure, that's a problem because we like provider pay to be maxed at 20%. So she is never going to have her payroll costs in line ever. And she's like, oh my gosh, I'm freaking out right now. What do I do?

Robin Ntoh (09:55):
Yeah, well, how do they undo what they've done?

Jessica Nunn (09:56):
How do you undo what you've done? How do you undo what you've done? And it's tricky. It is one of the most sensitive things that we do. But listen, this is a business. You can't continue doing that. She's like, I am now understanding why I am never profitable. I have no money. I'm so stressed all the time. Yep. That was your symptom, right? Your core problem is you have inappropriate payroll structures, so we need to look at it. How do we allow your employees to continue to make the money they've made, but just maybe do it differently. Do it differently, good job, while at the same time growing your practice.

Robin Ntoh (10:28):
Makes sense. Okay.

Jessica Nunn (10:29):
So that is the hottest thing right now because employees are hard to find and they want more and more money, and we want to take care of them. We want to keep our team and retain. So we really have to get smart about that.

Robin Ntoh (10:39):
Well, I would also say, compensation is more than just how you pay them. Are you paying them according to the laws within the state that you're in? And that's another thing that I hear a lot of and people, they're not in tune to it. They think that they're so small, they'll never capture the eye of the boards or the state, and those regulations won't pertain to them. And it's the whistleblowers.

Jessica Nunn (11:04):
Yep, exactly right.

Robin Ntoh (11:05):
It's the upset employees. They're going to make an impact on your business. So you want to get in line.

Jessica Nunn (11:10):
Yeah. Well, we see all the time. Even my daughter who's 17 went to work at a restaurant and I was like, Hey, how come they haven't asked for your social security card? How come they haven't asked for your driver's license? She's like, I don't know. I'm 17. Why do I care? And then three weeks later, she got an actual check, just a handwritten check.

Robin Ntoh (11:26):
Oh my gosh.

Jessica Nunn (11:27):
She's like, oh, what is happening? So we need to pay our, I see a lot of time on Facebook groups. People are paying their employees on 1099s. That's not allowed.

Robin Ntoh (11:38):
No.

Jessica Nunn (11:38):
And we actually have a client that the IRS contacted them or the state, somebody contacted them and wanted all the back taxes for that human. That is a lot. So you guys, if you are telling someone where to work, how to work and providing them their supplies, they're a W2.

(11:53):
They're a W2. It does not matter how many hours they work a week. They work one day a week. I don't care. They're a W2. This is being really scrutinized right now. So I can imagine we have to be compliant with payroll, not only in how we're paying them, but you need to be using a payroll software. There's a lot of things in business and a lot of things with taxes that are scary. But something that will land you in jail is not doing payroll taxes. You cannot collect payroll taxes from your employee and not send that to the IRS. It's like a jail thing. You don't do that. So please hire a payroll company. Have somebody managing your payroll taxes, sending that in. That is some scary stuff.

Robin Ntoh (12:30):
I think that just align up right behind compensation. You can compensate them, but you better pay the government too.

Jessica Nunn (12:35):
Well, I think what's crazy to me is people start a business. You start a business, you open your med spa, but then you somehow don't believe that you have a business. Now you have an actual business, you have employees, you have payroll, you have taxes, you have sales tax, you have all this stuff that you have to be compliant with. So if you're going to do it, you have to do it.

Robin Ntoh (12:55):
Do it right? Yeah, totally. The data part of this is also intriguing because a lot of times we will go back to compensation. Such a hot topic as you said, a practices that I've worked with over the years. You'll go in and you'll realize that the way that they're paying their providers, the data that they're using is incorrect.

Jessica Nunn (13:14):
We see that all the time.

Robin Ntoh (13:15):
And then this is a, okay, let's close the door. Let's have this conversation. Because the moment that leaks out, then you basically breed so much mistrust within your practice and your providers then start to question the ethics and everything that you're doing. Because it all comes back to compensation.

Jessica Nunn (13:34):
I know we see it literally all the time. We try to really make sure we have a handle on the data and make sure that the KPIs are correct before implementing or changing any compensation plans. But it happens a lot. And that's the thing with employees is they're always going to be a little distrustful to start. You're going to have to earn that trust when you're like, oh, just kidding. We weren't looking at any of the correct data. That is a real problem. So we have to make sure that it's right.

Robin Ntoh (13:59):
Truly. Most definitely. Alright, so got to have an accountant. They got to do their payroll. They got to do compensation. Correct.

Jessica Nunn (14:07):
In general.

Robin Ntoh (14:08):
And using a payroll company, ideally, that's an important part of this too. I mean, the list keeps going. What are some other things that you can see within this whole spectrum of financials that are frightening?

Jessica Nunn (14:22):
Again, when we look at practices where they're not as profitable as they should be, and we're just really not sure why, it oftentimes comes down to revenue. So we're really digging into the revenue. Surprisingly, when people work with us, they're like, oh, I thought when you built my budget, everyone has a budget. All of our clients have a budget.

Robin Ntoh (14:39):
Let's add that to the list. That's important.

Jessica Nunn (14:42):
That's true. When you built my budget, you would be saying, you can't spend this. You can't spend that. It's like a diet. You're not going to let me eat anything. You're not going to let spend anything. But we actually spend a lot more time looking at revenue than we do the expenses. Because in our mind, if you're maximizing your revenue and you're really taking every opportunity to generate new revenue in your practice, your expenses become less of a problem. Let's grow our way into profitability, not shrink the expenses and shrink our practice.

Robin Ntoh (15:09):
I've seen your presentations and one of the things that you call out is that your expenses will increase as your revenue grows, but are you keeping those percentages in line? I think that's a big call out. You don't just look at the numbers. You're really acutely aware of the percentages of where those fall.

Jessica Nunn (15:27):
And it's percentages of revenue. So if your revenue is a million dollars, what are your percentages? Now what would it look like if your revenue were 2 million and some of your costs don't change? Your rent's the same, right? Your utilities are the same. A lot of your loan payments the same, right? So imagine how much more profitability you have when a large percentage of your costs are fixed and don't change. That is why we dig into revenue. So we're really looking at those KPIs and saying, okay, do we have a utilization problem, which means our schedule isn't full enough, or do we have a revenue per hour problem, which means that our pricing may be too low or our service mix isn't quite right based on the cost of the practice. We don't have a good service mix there. Those are two very different problems with very different solutions, right?

Robin Ntoh (16:09):
Yes, definitely.

Jessica Nunn (16:10):
You're not going to see that in the p and l. You have to look at the KPIs and all the other data to get that.

Robin Ntoh (16:14):
So different than a regular accountant. Going back to the beginning, you had said your accountants aren't going to help them understand this, especially if they don't understand the industry. And that's where this is so critical. And as I'm looking at this floor today, I'm thinking, how many people out there, how many vendors are there that do this? There's not a lot.

Jessica Nunn (16:33):
That do what we do?

Robin Ntoh (16:36):
Okay. Can I say none?

Jessica Nunn (16:38):
People come in all the time. This's just happened yesterday. They're like, who are your competitors? We're like, if you find one, let us know.

Robin Ntoh (16:45):
It's actually a good problem.

Jessica Nunn (16:47):
And you know what? That's fine. There's a place for everybody, and we're not going to come in here and demand everybody work with us, although we believe that they should. But I think that we really take a unique approach because the other thing is we're normal humans. So we have had so many clients that have come to us and said, my accountant, usually when I talk to them, it's a young woman. She owns a practice, she's new in business. Our accountant's like this 55-year-old man, just like he makes me cry. I feel like he's talking down to me. I don't know what he's saying, and he makes me cry. That happens all the time.

Robin Ntoh (17:21):
Wow.

Jessica Nunn (17:22):
Isn't that the saddest thing?

Robin Ntoh (17:23):
It's sad.

Jessica Nunn (17:23):
So sad.

Robin Ntoh (17:24):
It should be fun to go to your accountant.

Jessica Nunn (17:26):
No one ever says that.

Robin Ntoh (17:28):
Okay, well, I'm going to say it here and now. It should be fun.

Jessica Nunn (17:31):
It should be fun, talking about your financials about.

Robin Ntoh (17:34):
You make it fun.

Jessica Nunn (17:35):
My clients will say yes. They'll say you for the first time. I understand you guys break it down. You talk like normal humans, and I actually look forward to my meeting with you every month. It's one of my favorite meetings. And who would've thought? Because the first time we really get into the data the first time, I mean it is a whole realm of emotions. We have had clients stress. We have had clients, they'll say, this is getting naked. I'm revealing everything to you about my business. This is the scariest thing I've ever done.

Robin Ntoh (18:00):
Oh my.

Jessica Nunn (18:00):
Yes. It's a whole thing. We are therapists too, so don't worry.

Robin Ntoh (18:03):
Yep. Aesthetics in general.

Jessica Nunn (18:06):
So anyway, it's really nice to have someone on your team that you can trust. And it's been so great having our clients here at the meeting and they're like, this is the best thing. I love your team. I mean, that is why we do it, right?

Robin Ntoh (18:19):
Oh I love your team. You guys are great.

Jessica Nunn (18:21):
Thank you. We started this to help people. Truly that's where we are. Our passion is to help people. And so it's so cool to get the feedback that we are in fact helping people.

Robin Ntoh (18:30):
It's amazing. I love it. What else do you want to share with our listeners today?

Jessica Nunn (18:36):
I would say it's been a tough time in aesthetics. Back a couple of years ago, the rising tide was lifting all boats. Everyone was doing really well, we felt, and now we're really seeing what's pulling apart the practices that are really intentional about knowing where they're headed, knowing where they are today, and the gaps that they have, and the ones that are just flying by the seat of their pants. So I would say, figure out which camp you're going to be in, and then if you're ready to grow, if you're ready to really become profitable and separate yourself from the rest, you got to take that next step.

Robin Ntoh (19:06):
You said something interesting. Practices will say, I don't want to grow. Okay, that's great. Nobody says you have to scale up. Nobody says you have to have five locations or even two locations. You don't have to have another provider. But do you want to be more profitable?

Jessica Nunn (19:21):
Yeah, that's so true too. And there's a difference between, we say, wanting to grow and take over the world. We always start meetings with where do you want to be in three to five years? Where's your long-term goal? 10 years? Are you on a beach or are you managing five locations? We need to plan another way depending on where you're headed here. And a lot of people really want to maximize what they have, but they really want to enjoy their life while they're doing it too. So they want a really nice work environment where they really have the opportunity to go in and take care of patients and focus on that. But they're not trying to necessarily take over the world with their business. So we support that too. Our practices that we work with aren't big. We have practices that have 2, 3, 4 providers, and that's it. And they don't have a desire to have more than that, and that's great. But what we want to do is make sure you're maximizing that because it's still a business. It's still a business.

Robin Ntoh (20:14):
Well, I think people are scared of understanding what the margin means. What does that mean? Is it going to impact what I do and how I actually enjoy my day? But at the end of the day, the freedom it brings.

Jessica Nunn (20:24):
Well, oftentimes what we're trying to do is have that owner not be the main provider because it's still a business. So you need to have some time to run the business, even if it's not huge, even if it's small. You need to have at least a half a day a week to focus on looking at your numbers, running your payroll, spending time with your team, growing your team, doing reviews, making sure your marketing is working, all those hats that you're wearing as a business owner. Don't make that happen on the weekends. Set aside an admin day or an admin half day work on those things. But to do that, you can't be the only one. If you're trying to run a business like that, you can't be the only one. You need to have other folks seeing the patients and making sure that their schedule is full and all that.

Robin Ntoh (21:07):
Most definitely. Listen, there is so much more we could talk about. I mean, we talked about some of the core things, but then I think about other things I'd love to get into. So we're going to definitely do part two on this.

Jessica Nunn (21:19):
Sounds good.

Robin Ntoh (21:19):
I'm excited. Where should people find you follow? How do they follow you?

Jessica Nunn (21:23):
On Instagram, we're at Maven Financial.

Robin Ntoh (21:26):
Love it.

Jessica Nunn (21:27):
Our website, Maven FP like financial partners.com. And on that, there's a contact us form if you'd like that complimentary financial assessment. We'd love to review your financials with you, but otherwise give us a follow. We're doing all kinds of videos and content, or we talk about these things that we're seeing in practices.

Robin Ntoh (21:42):
I love it. And again, that complimentary assessment that you're offering. Love that you have those tools in place so that it feels welcoming to people.

Jessica Nunn (21:51):
And if people are scared to have the conversation, we do have our book on Amazon.

Robin Ntoh (21:56):
That's right.

Jessica Nunn (21:56):
Med Spa Profitability.

Robin Ntoh (21:58):
Love that.

Jessica Nunn (21:58):
So give that a look if you'd more information about how to understand your financials, things that we're seeing in practices today.

Robin Ntoh (22:03):
Love it. You know what, it's been so much fun to do this podcast with you.

Jessica Nunn (22:07):
Yes, thank you.

Robin Ntoh (22:07):
It should be fun. Kind of like financials, right?

Jessica Nunn (22:09):
Just right. Yes, of course.

Robin Ntoh (22:12):
All right. Well, thank you so much for joining us today, and I will look forward to part two.

Jessica Nunn (22:16):
Thank you.

Announcer (22:18):
Thanks for listening to Aesthetically Speaking, the podcast where beauty meets business, presented by Nextech. Follow and subscribe on Apple, Spotify, YouTube, or wherever you like to listen to podcasts. Links to the resources mentioned on this podcast or available in your show notes. For more information about Nextech, visit nextech.com. Or to learn more about TouchMD, go to touchmd.com. Aesthetically Speaking is a production of The Axis, theaxis.io.