I recently had the privilege of sitting down with Jared Roar on the Patient Magnet podcast, hosted by Aesthetic Conversion, to talk about something that keeps so many med spa owners up at night: their finances. Throughout our conversation, we covered the common pitfalls I see clinic owners stumble into, the benchmarks that separate thriving practices from struggling ones, and most importantly, the mindset shift that can transform your relationship with money in your business.

Jared made a great point during our discussion: to win as a business owner, you need to get an A+ in three classes—marketing (getting eyeballs on your business), sales (converting those eyeballs into patients), and product delivery (managing your business and fulfilling on your promises). Today, I want to focus on that third piece, because without solid financial management, even the best marketing and sales won’t save you.

If you’re a practitioner who went into aesthetics because you love patient care—not spreadsheets—this one’s for you.

Why Finances Feel So Overwhelming

Here’s a truth I’ve learned after years of working with medical aesthetic practices: most clinic owners are exceptional practitioners. They’re artists with a syringe, masters of patient experience. But running a business? Managing cash flow, reconciling books, planning for taxes? That’s a completely different skill set.

The learning curve is steep when you’re starting out, and even if you have some financial competency, there’s the question of bandwidth. You’re already wearing a dozen hats—practitioner, HR manager, marketing director, inventory manager. Adding “accountant” to that list often means something gets neglected.

In my experience, more than half the clinics we start working with have books that aren’t up to date or haven’t been properly reconciled. The most common scenario? A mad dash at the end of the year before taxes, trying to piece together twelve months of financial activity in a few weeks. It’s stressful, error-prone, and—perhaps most damaging—it means you’ve been operating all year without any real insight into your business’s financial health.

The Foundation: What Every Clinic Owner Should Know

If you’re going to DIY your finances—at least in the beginning—here’s the baseline you need to establish:

Use QuickBooks or a similar system and keep it current. This is step one. You can’t make informed decisions without accurate, up-to-date numbers.

Review your profit and loss statement monthly. My favorite report is the P&L by month—it lets you spot trends and catch outlying issues before they become crises.

Monitor cash flow weekly. At minimum, you need to know you can cover payroll and inventory purchases. Cash flow is the lifeblood of your business, especially for smaller med spas.

Even if you feel overwhelmed, don’t be afraid to reach out to professionals in your community. A local bookkeeper can transfer knowledge and educate you on the basics—how to use QuickBooks Online, how to read a P&L, how to categorize expenses. That foundation goes a long way.

The Benchmarks That Matter

When we analyze a new client’s financials, there are specific numbers we look at to assess the health of the practice. Here are the benchmarks every med spa owner should know:

Payroll: 25-35% of Revenue

Ideally, you want to be in the 25-30% range. But here’s the critical piece that trips up so many owners: you need to include yourself in that calculation. I can’t tell you how many times we’ve seen a clinic that looks okay on payroll percentage—until we factor in what the owner is taking in draws, distributions, or salary. Suddenly that 35% becomes 41%, and the business model stops making sense.

If your payroll percentage is too high once you’re factored in, it usually means one of two things: you don’t have enough revenue being generated, or you’re overstaffed for the volume of services you’re providing.

Cost of Goods Sold: Around 30%

Your COGS—the products and supplies you purchase to deliver services—should ideally sit around 30% or better. This translates to a gross profit margin of 70% or higher. For smaller med spas, hitting that 70% mark can be challenging due to volume, but that’s the target you’re aiming for.

One major cash flow pitfall I see constantly: buying inventory in large quantities to get discounts when you don’t have the patient volume to support it. You end up putting it on credit cards, paying interest rates that wipe out whatever discount you got. Don’t let well-intentioned sales reps pressure you into overbuying. Your cash flow is more important than a 5-10% discount on products sitting on your shelf.

Provider Capacity: 75-80% Before Hiring

We advise clinics to start looking to hire when they’re at 75-80% capacity. If you’re significantly below that—we’ve seen clinics operating at 40% overall capacity—that’s your profitability problem right there. The opposite is also true: don’t hire too far ahead of demand, or you won’t be able to support that payroll cost.

The Equipment Question: A Word of Caution

We touched on something important during the podcast that I want to address directly: equipment purchases. I love what lasers and energy-based devices can do for practices and patients. But I’ve seen too many clinic owners get pressured into buying expensive equipment on the promise that it will “save” their business.

Here’s the reality: the equipment itself doesn’t generate revenue. Patients do. Those ROI projections your rep shows you? They only come to fruition if you’re bringing patients in the door to utilize that device. If you’re buying equipment hoping it will magically fix your patient acquisition problem, you’re likely taking on debt for an asset that won’t deliver returns.

The smart approach? Survey your existing patient base before making the purchase. One clinic owner Jared mentioned on the podcast sent a mass text to her audience asking which type of device they’d be most interested in. She bought based on actual demand, offered early adopters a discount, and had the equipment paid off within months. That’s strategic purchasing.

Year-End Tax Planning: Strategic Moves to Make Now

As we approach year-end, there are several tax strategies every med spa owner should consider:

Pay quarterly estimated taxes. If you’re a profitable spa, you should be paying quarterly. We evaluate this regularly with our clients to ensure they’re positioned well come April. The alternative—a massive tax bill in April—is far worse than planning ahead.

Take advantage of equipment depreciation. You can take 100% depreciation on new equipment in the year you buy it—this was just re-extended in the bill that passed this summer. I wouldn’t recommend buying equipment solely for the tax deduction, but if you’re already in need of purchasing equipment, it’s a powerful way to defer your tax bill.

Maximize your retirement accounts. This is an easy one with a double benefit: you get a deduction, and you’re putting away money potentially tax-free.

A word of caution on common deduction attempts in our industry: home office and auto deductions are tough to justify in many cases due to how the tax rules work. Just because someone says “buy a car and write it all off” doesn’t mean it’s compliant with IRS code. Commuting to and from your practice doesn’t count as business use.

The Mindset Shift: You’re the Momentum Driver

Jared shared something during our conversation that really resonated with me. He talked about how your job as a business owner is to build momentum—to create speed in your business. Everything you do should either drive that momentum or support someone who does.

Managing your books is critically important. But it’s not a momentum driver. Marketing, sales, patient care, strategic planning—those are momentum drivers. Your financials are the tool that allows you to make decisions for that momentum. Without accurate, timely financial information, you’re flying blind.

This is why I believe so strongly in outsourcing your accounting function. You didn’t go into aesthetics to become an accountant. Every hour you spend reconciling transactions is an hour not spent on the thing that makes you money and builds speed for your business.

The Value of a Specialized Partner

At Liguori Accounting, we’ve built our entire practice around serving medical aesthetic providers. That specialization matters. We understand the nuances of your industry—the service mix considerations, the MSO structures, the seasonal fluctuations, the specific KPIs that indicate practice health.

Our approach brings everything under one roof: a designated bookkeeper you work with daily, tax professionals who understand med spa-specific strategies, and fractional CFO support for when you’re planning big moves. We’ve designed our tiered service offerings to allow business owners to scale services to their needs, providing professional outsourced bookkeeping while allowing the opportunity to add on tax and CFO services.

We’re proud to be recognized as a preferred vendor by the American Med Spa Association (AmSpa) and Aesthetic Medical Providers of NH. Our team is 100% based in the USA—no outsourcing overseas, no waiting days for responses. White glove service is our standard.

Take the Next Step

If you’re feeling uncertain about where your practice stands financially, I want to help. We offer a free KPI benchmarking tool that compares your numbers to industry standards—think of it as a financial health check for your practice. It’s like going to the doctor and getting told whether your vitals are good or whether there’s something you need to address. You can find it on our website at liguoricpa.com.

Remember: your financials aren’t something to fear. They’re a tool. When you have accurate numbers and someone who understands your industry helping you interpret them, you can make confident decisions that build momentum and grow your practice.

Here’s to your financial peace of mind.