By Kendall Reed, Maven Financial Partners

Are you a medical spa owner wondering if your practice can afford or even needs a new provider? In this article, you’ll find a few things to consider when determining the best time to bring on a new provider for your aesthetics practice.

Provider’s capacity percentage

The first thing to consider when deciding to bring on a new provider is the utilization of your current staff. A good way to know if your providers are full is to look at their capacity percentage. This metric can be calculated by taking a provider’s hours available divided by their hours worked. It’s important to take into consideration blocked time and subtract that out, as a provider isn’t available to see patients during blocked time. (This is an important consideration when calculating capacity percentage—If a provider is on a break, they are not available to see patients. For example, if Nurse 1 works nine to five but has a one-hour block for lunch and a 30-minute break, their hours available for the day would be six and a half. You should remove blocked time from their schedule, as that is time they are not actually available to see patients.) Your EMR can be an awesome tool in helping pull this data. If you don’t have an EMR that has good reporting capabilities, it may be worth considering investing in one.

At Maven, we say that 75% to 80% capacity is as full as a provider should ideally be. If your providers are consistently below the 60% to 65% range, there may be opportunities to fill out their schedules. On the contrary, if providers are pushing 90%, that means they’ve got back-to-back-to-back appointments all day and could burn out over time. These are all important considerations when considering whether to bring on another provider.

Service mix demand

Another thing to consider is the service mix that this new provider will bring in and if there is a high demand for those services. For example, if many of your injectors are full or at maximum capacity, it might be worth hiring another injector to carry some of the weight for your current staff. One area you could look at to determine service mix demand is how many new patients you’re gaining monthly by service type. It’s important to consider if the provider you’re bringing in can help add value to the service mix you already provide without cannibalizing your current staff’s production.

Payroll

Another factor you’ll want to consider is what you will pay your new provider for the services that they’ll be performing. If you find yourself in a cash crunch, it may not be the right time to hire. However, if you’re paying a provider a healthy percentage of the revenue they’re bringing in, it may only drive up your top-line revenue. On average, you’d like to see a 25% payroll percentage, meaning that a provider is keeping 25% of the revenue they’re generating for the practice, leaving the other 75% to pay for the practice overhead, including consumables.

Small business owners are hands-on participants in their businesses. That doesn’t give them much time to track and sort financial data, let alone use it to make financial decisions. Meet Maven Financial Partners. Maven’s team of experts take a monthly deep dive into your financial data to understand what’s driving your business. They break down services by profitability, revenue by provider or expenses to prioritize in your budget. Consider Maven your on-the-ball CFO, empowering you to make the best decisions for your business.