The Aesthetic CEO: Secure, Empowered, Covered
As a business owner in the Aesthetics Industry you went into business probably because of the following reasons.
1) You wanted to be your own boss and create a lifestyle and perhaps you were burnt out in the hospital
2) You have a true passion for aesthetics and you enjoy making women and men feel their best and you achieve this by continuously investing thousands of dollars a year in education to bring your patients the best techniques
3) You want to create stability and legacy for your family and create opportunities for others
Disability. What comes to mind when you think of this? You are probably thinking of a broken hand, a debilitating illness such as multiple sclerosis, or someone who is has lost a limb in a car accident. Are these all disabilities? Yes they are, however, there are a myriad of disabilities that you can suffer in your lifetime.
Here are the most common forms of disability:
1. Musculoskeletal disorders (27.6%)
2. Cancer (15.0%)
3. Injuries such as fractures, sprains, and strains of muscles and ligaments (12.0%)
4. Mental health issues (9.3%)
5. Circulatory (heart attack, stroke) (8.2%) **(1)
Are you prepared for cash to stop if you can no longer work due to one of these illnesses? How would this affect your earning potential? The earning potential of your business?
Now let us say that you are 40 years old now, you have been in private practice Medical Aesthetics for a few years, things are going well. Did you know that if you are taking home a salary from your Medspa business of $175,000 and only give yourself a 5% raise each year your cumulative income earning potential is $8.4 million dollars by the time you are 65?
Hypothetically speaking, if you were that Medspa owner taking a $175,000 a year income with 5% increase year over year, could you afford to lose that tomorrow?
In my practice, the #1 asset that people say they have is their home. However, please don’t tell me that your greatest asset is your house (unless you have an 8.4 million dollar house paid off in cash, then this article is not relevant to you).
Your greatest asset is your ability to work and ideate plus the expertise you bring to your business every single day! If your practice is currently bringing in $1 million dollars of revenue a year, just an increase of revenue by 20% year over year would have your practice earning potential at $66.4 million over the course of 30 years. Will some practices make more and some less? Yes, however we are using a lower than average scale for Medspa revenue since Amspa’s annual report says that the average revenue of a Medspa is $1.5 million.
According to a 2019 study of bankruptcy filings it found that 77.8% of debtors cited income loss as a reason for becoming financially insolvent. 44.3% of these people attributed their work loss to a medical condition. **(2)
My own brother-in-law was 45 years old, and just 7 months ago had a stroke that he never recovered from. He was in the nursing home recovering we thought and his condition got progressively worse. My sister ran out of savings after a few months and subsequently he passed away leaving a bigger gap as they had just bought a home before he got sick.
Do I tell you this for sympathy? Absolutely not. My brother-in-law was sent back to the energy that gave him life and he had a wonderful life here and was a beautiful partner to my sister and father to their children for 20 years. I share this story to say...it can happen to anyone.
As a business woman, you have a lot more at stake. You have your family livelihood, your employee livelihood, your brand livelihood on the line if you don’t have a protection plan in place.
Over the next few weeks in The Aesthetic CEO newsletter, I will be sharing with you case studies and actionable steps that you can take in order to make sure that you are planning for these risks that are ever present.
I believe that you want to be a SECy woman. Secure, empowered and covered.
Tracey Donavan Insurance & Retirement Services
Sources 1. Integrated Benefits Institute, Health and Productivity Benchmarking 2019 (released September 2020), Long-Term Disability, All Employers. Condition-specific results. https://files.ibiweb.org/uploads/general/Sample-Reports.zip. 2. David U. Himmelstein, Robert M. Lawless, Deborah Thorne, Pamela Foohey, Steffie Woolhandler, “Medical Bankruptcy: Still Common Despite the Affordable Care Act,” American Journal of Public Health 109, no. 3 (March 1, 2019): pp. 431 – 433. See Table 1. Free access available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6366487/