Your Practice Is Hiding the Answer: The Internal Audit Method That Exposes What's Actually Blocking Your Growth

[00:00:14] Introduction & Speaker/Topic Setup

Most aesthetic practices are not struggling because of bad marketing or the wrong device mix. They're struggling because the owner has never been taught how to look at their own operation clearly enough to see what is actually in the way. Welcome back to the Business of Aesthetics podcast. I'm your host, Anji.

To help us tackle that problem head on, we're joined again today by Kara McClanahan. Am I saying that right? Kara McClanahan? McClanahan. Very close. McClanahan. McClanahan. All right. We're joined again today by Kara McClanahan. If you caught her first episode with us, you already know she's not here to give you a theory. She's here to give you the exact methodology.

Kara is the managing partner and executive business consultant at Aesthetics Practice Partners, a board-certified medical practice executive, and the sitting vice president of operations at Genesis Lifestyle Medicine. She spent nearly 30 years building and fixing operations inside some of the most complex aesthetic practices in the country, and today she is bringing her Uncovering Excellence audit framework directly to you.

We're talking about how to deep dive into your own practice operations, how to surface the growth obstacles you did not even know were there, and how to turn what you find into a strategy your team can actually execute.

This episode is brought to you by Ekwa Marketing. All right, let's get into the conversation.

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[00:02:01] Why Practice Owners Audit the Wrong Things

So Kara, you have walked into a lot of aesthetic practices over nearly 30 years and every single one of them thought they had a handle on their own operations rather. So when you started developing what you call the uncovering excellence approach, what was the moment that made you realize most practice owners are actually auditing the wrong things?

Yeah, I love that. So I think that it's really hard to look at our own businesses and be agnostic or be very intentional about what we have to look at. So most business owners look at things like revenue, like cost per acquisition, like all of our marketing metrics that are supposed to tell us how well we're doing. But I think when they sit back and look objectively, what we're missing the mark on is how are we actually doing what we're doing, not what is the outcome of what we're doing. So instead of looking at those vanity metrics, we teach practices to look at the processes that produce the outcome.

And I think the turning point for me was having been a practice administrator and an operator myself is we were trained to look at metrics. And those metrics told us how well our businesses are doing. But we were looking, like you said, at the wrong things. We need to be looking at how we're doing what we're doing that produce the outcomes that tie back to those metrics. And it's really just a mindset shift. And I think that that's where businesses really miss the mark when we're looking at assessing how we're doing in our business.

Yeah, and that is the trap because owners are not being careless. They're measuring what is visible. They're looking at the dashboard numbers, the revenue reports, the booking rates. But what your warts and all audit is really doing is going beneath the surface layer into the places the owners walk past every single day without recognizing what is sitting right there.

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[00:04:10] The Three-Part Internal Audit: Patient Journey Mapping

Which brings me to the process itself because I want our listeners to be able to take this and actually run it inside their own practice. So when you teach a practice owner or a manager how to run this kind of deep operation audit on themselves, not hire a consultant, but actually do it themselves, what are the three specific areas inside their own practice they must audit first? And why do those three reveal more than everything else combined?

Yeah. So you start with the patient journey. So process mapping your patient journey and every single touch point the patient has through your practice shows you where there's operational gaps, where there's revenue opportunities, where there's customer service opportunities. If you think about why we're here, yes, we all want to make money. We all want to make everyone look pretty, but at the end of the day, it's outcome-based. And our business should be outcome-based as well.

So the very first thing that I encourage every single practice owner to do is process map your patient journey. So think about every single touch point. When you're marketing, your driving leads to your door, right? So what are you doing to get those leads in the door? You need to start with your lead processes. How quick are you responding to leads? How are you following up with leads that you didn't contact right away? Listening to the reasons why leads maybe didn't book an appointment is just as important as paying attention to the ones that did. Obviously, we're looking at our referral sources because we want to know how our marketing channels are working, what our relationships with other patients look like for referrals.

So when you break it down, now you're looking at they've made their appointment. When they've made their appointment, what happens? Are you sending them a welcome email? Do they get the warm and fuzzies the minute they made that appointment? Is there an introduction to what's going to happen when they come into the clinic? Do they fill out their intake forms via a portal? If they fill them out via a portal, are you missing information that you need to deliver a great experience? Or are you waiting for them to come into the office and fill out old school forms?

Look at those processes and every single touch point tells you what you can do better or what you're doing really well already operationally so you know what those gaps are. Look at your customer service at your front desk when a new patient walks in the door. What do they see, feel, hear? What is that experience? And then continue that patient process mapping all the way through treatment, consultation. What happens after treatment? What is the post-treatment experience? Does the provider call them two days later and ask them how they're doing? Are we checking in to make sure that they're using their post-treatment serums? Are we checking in two weeks later to make sure that they have their next appointment booked?

So quite literally, process mapping down to the very, very minute detail every single experience a patient has with your office. And when you do that from lead to post-treatment and how you're following up on them, you're going to see those blind spots that we don't see every single day. You know, I give the example when I'm consulting with a practice or even 15 years ago when I ran a practice myself, I walk in the front door every single day, even if the back door is more convenient. And I walk the journey the patient is going to walk from the front door to check in to the treatment room before I sit down because I want to see what my patients are going to see. Look, you know, what are they going to see if they're standing at the front desk? Can they see behind the front desk and there's a lot of sticky notes and mess and clutter? Or is it nice and neat and pristine and organized? These little details we miss unless we're analytically looking at it every single day, because when they're in our own practice, we just grow blind to it.

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[00:08:19] Pillar Two: Know Your Numbers

These are the number, the biggest thing that is going to tell you where you have gaps, but you have to look at it objectively. That's only one thing. That's the first part of the internal audit. The second is dive into your numbers. And I know that everyone says that, but it's not enough to run a sales report. It's not enough to know what your revenue goal is. You need to know your profit margins. You need to know your cost of goods on every single treatment. You need to know your overhead percentage to your operating costs.

So the second thing that I think is most important, and I think that practice managers and owners are getting much more savvy today because there's a lot of education out there like Business of Aesthetics and other organizations where they can get these insights. But I can't stress enough how important it is for business owners and managers to know their numbers.

And I say business owners and managers very strategically because oftentimes our business owners, our practice owners know their numbers or they at least know their high level numbers, but then they expect someone else to manage their business without the transparency of those numbers. And so I think it's really important if you're an owner operator, obviously you have to know your numbers. But if you're an owner and you have somebody else as an operator manager, there needs to be transparency and understanding of those numbers as well. And I think that's also a big miss for a lot of practices I work with today. So the number two step is know your numbers.

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[00:09:46] Pillar Three: Understanding What Drives Patients to Specific Services

And then third is understanding what's driving patients in your practice, not just your marketing dollars, but what treatments are they requesting? What are your highest profitable services that your providers are doing on repeat? What are the services that we forget? Are there items on your service menu that you're just not moving? Are you not moving them because your providers need to be re-educated on clinical processes? Do they not believe and trust in the outcomes or are you not marketing those services?

So to recap, your question was, what three things do practice owners need to look at? Process mapping your patient journey, understanding your numbers, and then third, understanding the drivers of service in your clinics.

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[00:11:01] Recap & Transition to the People Side of the Audit

That is such an interesting answer and it was so clear as well, I love that answer. So what I love about the framework also is that it's not theoretical, it is a sequence and what you're really saying is that the audit is not a one-time event, it is a skill, it is something the owner has to develop the discipline to do repeatedly. And Kara, you're doing this right now in real time as VP of Operations at Genesis Lifestyle Medicine. You're not advising from the outside, you're inside a live operation. So I want to push into the people side of this because that is where I know the audit gets the most uncomfortable.

So in your experience running operations at the enterprise level, when a practice owner does a genuine warts and all audit of their people and their leadership, not their systems, not their numbers, but their actual team performance, what is the single hardest truth that almost always comes up and why do most owners keep avoiding it?

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[00:11:45] The Hardest Truth: People Problems Are Leadership Problems