If your medspa is profitable on paper but cash still feels tight, the issue is rarely sales.
The real problem is usually where cash gets delayed, tied up, or spent before you realize it. As medspas grow, small timing decisions compound. Individually they feel manageable. Together they create constant pressure.
Case Study: Full Schedules, Empty Cash Reserves
Business: Multi provider medspa generating approximately $2.4M annually
Problem: “We’re booked out for weeks, but cash feels tight every pay period.”
What was happening:
Heavy use of membership plans and package pre sales collected over time
Injector payroll and product costs paid weekly
Minimal follow up on declined cards and failed auto payments
No visibility into future cash inflows
Profitability without collection discipline is like having a fully booked schedule but no show patients. The revenue exists, but it does not fund operations.
Tightening payment policies, improving card on file success rates, and forecasting weekly cash inflows stabilized payroll stress quickly.
Case Study: Owner Draws Outpacing Cash
Business: Single location medspa doing approximately $1.1M annually
Problem: “The business is profitable, but I am constantly using my credit card.”
What was happening:
Owner taking $15K per month in draws
Business generating only about $11K per month in true free cash flow
Expansion investments paid upfront
No separation between owner pay and business cash needs
This was not a profitability issue. It was a cash timing and draw strategy problem.
Capping owner compensation based on cash flow instead of profit resolved the issue quickly.
Case Study: Growing Revenue Tied Up in Inventory
Business: High growth medspa expanding service offerings
Problem: “Sales are up, but I do not have cash to reorder products.”
What was happening:
Overstocking injectables and skincare
Inventory turnover well below industry norms
Capital tied up on shelves instead of in the bank
Equipment financing with minimum cash balance covenants
In medspas, inventory is cash sitting on a shelf.
Excess product does not show up as an expense, but it absolutely drains liquidity.
5 CFO Approved Ways to Improve Cash Flow in Your MedSpa
You do not need a full time CFO to stay ahead of cash flow. These habits take 10 to 15 minutes a week.
Build a 4 week cash flow forecast
Track expected patient payments, membership drafts, payroll, rent, and product orders so problems are visible before they hit.Review failed payments and A R weekly
Declined cards and unpaid invoices add up fast. A simple weekly review improves collections.Monthlyize large expenses
Quarterly taxes, insurance premiums, and device payments should be planned monthly.Set a cash reserve target
At least one month of operating expenses in a separate savings account creates stability.Cap owner draws based on cash, not profit
If your medspa generates $12K in free cash, do not take $15K. Owner pay must support growth.
