Selling your practice is one of the biggest decisions in your career. In this episode, Guest Shawna Chrisman, founder of Destination Aesthetics Medical Spa, shares her firsthand experience selling her practice, from strategic and emotional challenges to lessons learned. Tune in to discover how to build a compliant and sellable practice, evaluate private equity opportunities, and know when the timing—and the partner—are right for you. Whether you are planning for the future or just “asking for a friend,” this episode offers an inside look at the experience of selling a practice.
Listen to the full episode using the player below, or by visiting one of the links below. Contact ByrdAdatto if you have any questions or would like to learn more.
Transcript
*The below transcript has been edited for readability.
Intro: [00:00:00] Welcome to Legal 123s with ByrdAdatto. Legal issues simplified through real client stories and real world experiences, creating simplicity in 3, 2, 1.
Brad: Well, welcome back to the episode of Legal 123s with ByrdAdatto. I’m your host, Brad Adatto, with my co-host Michael Byrd.
Michael: As business attorneys for health care practices, we meet a lot of interesting people and learn their amazing stories. Brad, this season’s theme is “Asking for a friend.” We’ll tackle questions that practices are sometimes afraid to ask.
Brad: Now, audience members understand this is a safe place. Everyone knows it’s not you asking the question if you use those magical protective words that say, “asking for a friend.” Now, Michael, I’m super, super excited to bring on our guest for this show.
Michael: Double super?
Brad: Yes, super.
Michael: Oh, wow.
Brad: However, before she joins us, Michael, we have to discuss an extremely important question I have for you today. Have you ever been knocked [00:01:00] out while playing a sport?
Michael: Not while I was typing.
Brad: Okay. By the way, typing’s still not a sport.
Michael: Okay. Yeah. I’m not sure how you define knocked out. As you know, I’m a lifelong competitive tennis player. I have twice been on the receiving end of a tennis ball that hit 80 plus miles an hour to a different body part. And it made me wish I was knocked out.
Brad: Yes. That could make sense.
Michael: How about you?
Brad: Believe it or not – I know it’s hard to believe. I’ve been knocked out more than once, mostly while playing football. The number of times I’ve been knocked out playing football, that was back when they say you got your bell rung. Like, “Oh, just get back up. You just got your bell rung. Get back in there.” So yeah, I could go on and on with the stories.
Michael: I’ve never had more clarity about my partner than right now. Explained so much.
Brad: All right. Well, Michael, back in the old days, like old days being like last year, even if you were [00:02:00] ever knocked out while playing football and including in the NFL, what would they do to bring you back?
Michael: Smelling salts.
Brad: That’s correct. Yes. However, the NFL actually decided just recently to crack down on smelling salts, which they ban from pre-game, which I think is great, and halftime. It seems that smelling salts were kind of – they want to say that’s kind of out of bounds illegal now. In shocking news, it turns out smelling salts can mass symptoms of concussions.
Michael: I’m actually wondering if smelling salts would’ve helped me in my situation.
Brad: No, you were still awake. So the NFL head, neck and Spine committee, which I think is fascinating said, “No more AI Michael” – and not AI like you think. It’s ammonia inhalants for safety, AKA smelling salts – clearly indicating that my AI in football went beyond just picking the best fantasy football team.
Michael: I have no idea what you just said, but I am quite impressed with your vocabulary. [00:03:00] I cannot believe that you actually pronounced ammonia inhalants correctly.
Brad: I’ve been practicing for days for that one. Me too, I’m pretty shocked. I was really worried with it, especially with our guests with all her technical know-how and scientific background.
Michael: I felt the tremor of the collective groan of our audience with your dad jokes. Somewhere in this conversation there has to be some sort of lesson for our health care providers in the audience, maybe about not masking their patient symptoms. I don’t know, it’s a stretch. Let’s bring on our guest before she has her own revelation that she needs to leave. Joining us today is Shawna Chrisman. She’s a longtime friend of both of us. Shawna is a board certified nurse practitioner. Little bit of her educational background; she has her [00:04:00] master’s from University of California, San Francisco in Acute Care Nurse Practitioner. Undergrad from, California State University at Sacramento with a BS in nursing. Shawna is the founder of Destination Aesthetics Medical Spa. She’s also an Allergan Medical Institute educator. She lectures at medical conferences all over the country. She’s got some trophies along the way, business acumen, including being named a Sacramento Top 100 Business Leader, Women who Mean Business Award. And in 2023, Destination Aesthetics partnered with Advanced MedAesthetic Partners. Surprisingly, she is a first time guest on our podcast. Once again, I blame you, Brad, for that. Shawna, thanks for being here.
Shawna: Hey guys, thank you so much for having me. It is truly an honor to sit at this table with you both.
Brad: Well, we’re pumped [00:05:00] to have you. Like Michael said, it has been way too long. I don’t know why. Again, I blame Michael. But first important question right out of the bat. Have you ever been knocked out while playing a competitive sport, or in Michael’s case, a non-competitive sport?
Shawna: That’s a no. But thanks for keeping my mic on during that question when Michael answered, because I was trying really hard not to. But no. There’s always in the future, and hopefully that doesn’t happen.
Michael: Yeah
Brad: I mean, it’s fun for a moment in time when you’re knocked out, but then when you come back in, not so much fun.
Michael: Okay.
Shawna: I think the biggest thing that I do now competitively is play pickleball. And if I get knocked out playing pickleball, it’s probably my fault. Like I run into a post or something. So hopefully that way.
Michael: There is a no joke on the injury front in pickleball. You got to watch out; the orthopedist are loving it.
Shawna: I have heard. Don’t want to be on that list.
Michael: Stay safe. All right, let’s jump in. [00:06:00] Tell us a little bit more about you and your background.
Brad: Anything that we didn’t cover.
Shawna: Yeah, like you said, I’m a nurse practitioner. I thought my whole life I’d be practicing in critical care medicine. When we talk about acute care specialty, that’s what my specialty was, which was in acute care medicine and critical care. Low and behold, this pharmaceutical called Botox, really just changed my life. I started doing Botox parties on the side, thinking that I kind of wanted to pivot into something that would give me a little bit more of a flexible lifestyle that ended up just completely taking over my world and giving me a completely inflexible lifestyle. So I came into aesthetics really unplanned. Thankfully, it’s the best thing that I’ve ever done for my career because I get to meet people like you, and I get to empower patients and people to feeling like their best selves [00:07:00] – most confident selves. It’s the gift that keeps giving, honestly and that’s what keeps us coming back for more.
Brad: I love the fact that you kind of found it and it wasn’t intentional, yet you’ve created this – which we’ll learn – an incredible career of something you really weren’t focused in on. That’s really cool.
Shawna: Definitely not. I didn’t even go into this career path even understanding what aesthetics was. I truly thought that I was going to age gracefully without Botox and all of the things. I realized that practicing medicine with our hands in an unconventional way is still medicine. So that’s really what pivoted me into aesthetics and discovering my passion.
Brad: So you started doing these Botox parties on the side, but then you start this incredible company or practice; Destination Aesthetics [00:08:00] that then ends up partnering with AMP. Tell us about that.
Shawna: So Destination Aesthetics, the name “destination” came from me doing Botox parties. And the word destination, I would literally go to people’s parties and instead of a Tupperware party, we talk about Botox and discuss Botox. And I know from a compliance and legal standpoint, you guys are just cringing in your seats right now. Like, what’s happening? Are there consents, all the things. I know what’s going on in your head. But I started doing that and realized that I needed a brick and mortar for these people to come back to because people were texting me and asking me if I could come back out to their house. And I’m like, “I have two other full-time jobs working as a nurse practitioner.” So I started a single room medical spa with my medical director who was at the time, a medicinal marijuana prescriber. So we shared an office.
Basically, back then we incorporated in 2011 and started really seeing patients in 2012. [00:09:00] Aesthetics really wasn’t a thing at the time. So I was lucky to get in early. However, the disadvantage is that we don’t have all of the resources that we have now for medical spa practices and owners and providers and clinicians like myself, where you have safety compliance and you have all of those things at your fingertips; business advisors and things like that. So it was really a rough kind of raw start, but I was lucky enough to have a really loyal patient following where I went from one room to two rooms in a studio suite, and then opened up our current Sacramento location that had eight treatment rooms. That was kind of our first real brick and mortar. Then we ended up scaling to a total of five locations. And then, yes, I partnered with Advanced MedAesthetic Partners in March of 2023. So it’s been [00:10:00] about two and a half years now, and it just seems like the biggest whirlwind, all of it from A to Z. Now I’m starting a whole new alphabet with AMP, so Advanced Medical Aesthetic Partners for short.
Brad: And I was going to say when you started off, there really weren’t that many good resources to really help how to build a successful med spa. I can say – I’m sure I won’t put words in your mouth, Michael – that we still talk to people who don’t realize how many great resources are out there. So for our audience members to your point is like they still try to go out and do it on their own and not even realize they could join something like a med spa or go to other conferences and learn about how to do things properly. They just kind of do it themselves and then they realize the whole fact. I had a call today with a nurse practitioner in Illinois who kind of did that to themselves. So I agree. Use those resources that are out there.
Shawna: Yeah, for sure. [00:11:00] I mean, that was honestly one of the very first things that I did when I started and that’s where I met Alex Thiersch. We kind of started our businesses around the same time. I think I saw him in a bootcamp that was in some janky hotel room or something like that. Again, our beginnings were pretty raw, but I wanted to make sure that I understand the laws will be proud of me for that and all of the regulations because I’m a nurse practitioner. I was not a business entrepreneur at the time. I had no business acumen. I didn’t know what I was doing, let alone from a safety and compliance standpoint. So that was hands down the best thing that I did, and that’s where I got to meet you guys as well.
Michael: Yes. I’m curious too. Going back to the beginnings with Destination Aesthetics. So when you were in your first brick and mortar, did you at some point expand beyond injectables? Or were you focused kind of niche on the injectables practice?
Shawna: [00:12:00] Yeah, that’s a really good question. So I started out myself as a solopreneur doing chemical peels, microdermabrasion, I was doing pixels, injectables. Then I bought my first laser when I was in my one room. And then when we expanded to the current brick and mortar. We did expand into other services like microneedling. We had an esthetician who worked – they’re doing skincare treatments and took it off of the providers such as myself as the injectors, kind of like streamline with the experts, the expert treatments that they do when they’re in their realm. We’re really heavily focused on cosmetic injectables as a foundational revenue stream for aesthetic. It still definitely is the foundation of our practice being always over 80% of our total overall revenue.
Michael: That’s amazing. I’m also curious too, like you go on this journey where you’re kind of stumbling and to opening your own retail as you realize and are [00:13:00] kind of unlocking this passion. What in the world was your vision when you’re like, “Okay, I need to open a second location. That is a big jump?”
Shawna: Honestly, during that time, I was really fortunate that honestly – Like almost on day one when we opened up our eight room treatment facility in Sacramento, we were almost fully booked on every room, every provider from day one. So it got to the point where every single provider was booked out two weeks to two months. So organically the question was, “Where are these people coming from? We need to service them better by opening up a location there.” That’s why we went to Folsom, California. And then from there we went to Elk Grove Roosevelt, El Dorado Hills. So all of the locations are really close in vicinity to each other, probably within like 25, 30 minutes of each other. Because myself being a wife and a mom, having more [00:14:00] locations outside of the Sacramento County area was just not an option for me to kind of go and dig in and manage outside of my little circle.
Brad: And in California, the way I understand it, if it’s 25 minutes away, that’s like a mile and a half. You could either walk there or it takes 25 minutes to drive there or something like that.
Shawna: That is a fact in some areas, for sure. Exactly. So now you know why I chose to keep everything very consolidated.
Michael: Obviously you’ve talked about partnering with AMP and mentioned a new role. Talk about what you’re currently doing with AMP.
Shawna: So when I joined, I was still responsible for my five DA locations, which now seems very easy to do considering my transition in the company. Although I’m extremely fortunate and grateful for the opportunity that I have had [00:15:00] within the family and platform. This last January, I became a managing partner, and I now oversee two additional brands outside of Destination Aesthetics for a total of 12 locations outside of my five. So that was a stretch. But what it did was it reinvigorated my passion for business development because I could go into these other amazing brands together and collaboratively with the resources that AMP has in my past knowledge of scaling destination aesthetics. I was able to go in and help collaboratively make change and that feels good.
Then as of recent, as of about three weeks ago, I became the chief aesthetics officer for AMP. So that is [00:16:00] a new role, but I also like to say it’s a new/ additional role. That’s why I go back to say like, “Oh my gosh, just managing and operating, growing Destination Aesthetics with our five locations now seems very simple, but it’s not. So the opportunity was positioned for me, and what this has done now is giving a glimpse into more of the finance side of M&A, investment banking and all of that. So I’m kind of learning more full circle, I guess, of what all of these mergers and acquisitions are all about instead of just being on the sell side.
Brad: Well, Michael, that kind of reminds me, we kind of need to take a step back. We’re talking about all these things that happened before. So maybe we can ask, going back to what is our theme for the day?
Michael: We have the “asking for a friend,” [00:17:00] and so I’ll pose it almost like a “Dear Abby” type pose. We have a friend that keeps hearing about people selling their med spas and is curious about it, doesn’t understand it. So I’m asking for a friend, Shawna why did you decide to sell your practice? Or using a different word, partner with a private equity backed company?
Shawna: That’s a great question. So there are four things that really happened in my life that kind of led me to that. I never in a million years thought that I would ever sell destination aesthetics. But I had a close friend, who unfortunately tragically passed away in a plane accident. And I think when those kind of things happen, we all kind of take a pause as like, how are we spending our life? How are we spending our time? [00:18:00] And what truly matters? The second thing was I found a full sibling biological sister on ancestry.com, we’re both adopted from Korea, had no idea that each other existed. I had an instant sister and when she told me that she was going to move to California from New York, that’s where she lived and grew up, I honestly had to take a pause and ask myself, “If I had time for this new relationship that made me so bad because I was so busy.”
My husband worked for family business all his life. They actually sold their business right before COVID. He was working in DA kind of as like helped me, but it wasn’t his passion. So I kind of wanted to release him to kind of do something for himself and to find his own passion. Then also finally, my daughter was suffering from a lot of mental health issues at the time and she was getting ready to [00:19:00] graduate high school, and I just needed to be more present for her. So all of that led to me just asking the question of like, “Hey, what does this look like?” So I worked with Skytale to kind of help bring me to market and kind of get me there and give me a plan of what this looks like.
I would probably say one of the biggest things that I hear from people that are practice owners and are thinking about maybe selling in the future is that they say, “I’ll be ready maybe in like two to three years.” And I’m like, well, you really need to kind of think about this now.” It was really interesting. There was someone on social media that posted about all these people selling their practices and selling out. It honestly hurt my feelings because people don’t know what’s going on behind closed doors. It’s really quick for people to think that people [00:20:00] just want a fast pay out and that they don’t want to be in the industry anymore, that they don’t care about their teams and all these things. And honestly, every situation is so different. There’s not one person that I know that just honestly wanted to sell out, get out, be out. Everyone still wants to be in the industry. Everyone still wants to make sure that their team is taken care of and nurtured and continues to grow.
Brad: Yeah. So then, all great reasons. I mean, everyone’s going to have their own reasons, but I love that you have four of them, and each one seems to have its own powerful meeting. So then you decide that you will sell. What was it like going through that sales process?
Shawna: Well, it was indescribable. How’s that? But I can tell you, I was thinking about it this morning knowing I was coming on this podcast. [00:21:00] There’s not one day that goes by that I regret my decision. When you go through, the reason it was so hard is because all of the blood, sweat and tears you take in putting your entire heart into this business and to the people, you just want to make sure that that continues, that the partner continues to align with your core values. My biggest thing was making sure that my team was taken care of. It wasn’t about who brought the most money, who brought the best terms, all of these things. It was really like, “Who’s going to continue to align with our core values?” So that being said, I am so grateful that I chose to exit when I did, and I’m extremely grateful that I exited who I partnered with.
Brad: Well, that’s a great takeaway just in general because a lot of people, they’ll have multiple offers sitting in front of them and they focus on the in number versus [00:22:00] what you just described. Which is what’s the one that I’ll be best to partner with because they understand what I’ve built here and they can work with me on that piece. That’s a really good takeaway.
Shawna: Yeah. I mean, you have your merit. Basically this partner for however long your employment agreement is. You better make sure that you chose a partner that you can continue to align with.
Michael: Was this the biggest professional decision that you’ve ever made, was when you were making that decision of selling and who to sell to?
Shawna: 100%.
Michael: And I’m guessing, because we try to describe – I mean, it’s funny you use the word indescribable because we have not sold ourselves, but we’ve been alongside for so many and we try to describe just the fact that you’ve got this really big decision [00:23:00] that you’re making. The biggest decision on the business front and you’re marrying that with a lot of emotion and of the emotional rollercoaster in this compacted time. It is difficult to explain that journey.
Shawna: It’s very difficult. But my biggest recommendation for people who are considering it is do your due diligence. Make sure that your valuation is accurate, obviously, and make sure that you are aligned with the plan forward.
Brad: Yeah. So now that we hear how well you’re happy and how indescribable, if someone’s thinking about going through this process, what challenges or friction moments should they expect? Not saying that everyone will have that, but just kind of giving them some ideas about going back to the process. Like what were some big challenges that maybe you went through or now that you’re on the [00:24:00] other side that you see other people going through?
Shawna: For me, the timeline was most stressful because it’s kind of like building a house. Your contractor comes with you and they’re like, “Hey, Brad and Michael, your house is going to be done from start to finish. You’re going to be able to move into this house fully furnished in six weeks.” So for me, in partnering with AMP, they at the time of my acquisition were acquiring…it seemed like M&A as you guys probably remember. So many PE groups and family offices, like the biggest land grab ever. So they were integrating so many partners at the same time and so I kind of kept getting pushed back on the waiting list, I guess you could say, and that made me nervous.
It really was a capacity integration thing. I know that now, but at the time it just felt like, “They don’t want me, they don’t care” and all these things. It absolutely wasn’t that. [00:25:00] So of course, I probably brought the additional drama factor there and I didn’t need to. Sorry for all the people who saw the tears regarding that, but it really was just that you want this house built, and you want to move into the fully furnished house in six weeks, and that doesn’t happen. So that, I, would probably say was the biggest point, is be patient with the timeline because things happen and you don’t really want to push things through if not all the “i’s” are dotted and crossed.
Brad: So when they kept telling you, it’s not you, it’s me, you just didn’t believe them?
Shawna: I didn’t.
Michael: Okay. Final question, final asking for a friend question. This time I’m asking for a friend and his name is Brad.
Brad: I don’t know that guy.
Michael: How do you think the aesthetic industry’s changing?
Shawna: Well, I feel like it changes every day. The caddy [00:26:00] part of me will say that I feel like it’s becoming a little bit of a social club and I feel like it maybe is veering away from the professional medical industry that we technically really are. That being said, I do love how it’s flourishing and kind of developing its identity, I guess in the medical professional world. We’re very flamboyant. We definitely have a lot of smart, brilliant people in the space. There’s a lot of innovation, there’s a lot of money and pharmaceutical companies that are injecting money into research and development. So I honestly feel that we’re just getting started in all of the anti-aging wellness capacity and it’s invigorating to me.
Michael: Totally agree. Yeah. [00:27:00] It’s like that seems like the next wave of all the anti-aging related stuff. That’s great. And I do agree, I think you meant that Brad’s flamboyant when you said that, but yes, I agree.
Brad: Maybe a little.
Shawna: Yeah. On a scale of one to 10.
Michael: Yes, exactly. Well, believe it or not, Shawna, we’ve run out of time. Thank you so much for joining us on the Legal 123s with Byrd Adatto. We’re grateful for you and our friendship. We’ll go to break next and then we’ll have a little legal wrap up when we get back. But appreciate you coming on.
Shawna: Perfect. Thanks guys.
Access+: Many business owners use legal counsel as a last resort, rather than as a proactive tool that can further their success. Why? For most, it’s the fear of unknown legal costs. ByrdAdatto’s Access+ program makes it possible for you to get the ongoing legal assistance you need for [00:28:00] one predictable monthly fee, that gives you unlimited phone and email access to the legal team so you can receive feedback on legal concerns as they arise. Access+, a smarter, simpler way to access legal services. Find out more, visit byrdadatto.com today.
Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host, Brad Adatto, with my co-host, Michael Byrd. Now Michael, for those who don’t know this season, our theme is “Asking for a friend.” We had a real good friend come on and join us and Shawna really dropped down some serious knowledge about really what the process looks like to sell a practice and what you have to go through. But she also had some really good takeaways about just starting a new practice, in her case aesthetic practice. What were some of the takeaways you had, Michael?
Michael: Yeah, I mean, I noticed her talking about, at the beginning not having any resources and she kind of bashfully saying she was having Botox parties and knew that she may not have been dotting i’s and crossing t’s because she didn’t know about compliance and all the rules. [00:29:00] And despite the fact that there are so many resources available today, not to mention this podcast, by the way. We talk about pirate mode. When people are starting a practice or often they just get off and are running in their practice, they don’t pause and realize that there’s this other side, this compliance side. So we would just encourage anyone in the audience if you are feeling that weight that you have started and haven’t looked at this or have been running your business for a while and kind of put this on the back burner there’s a real risk in being a medical practice that you want to make sure that you look at these details. That it’s not just a matter of protecting your business, but you’re also creating value in your business so that if you ever are like Shawna and decide to sell, you actually have a sellable business.
Brad: [00:30:00] Absolutely. Well, audience members, unfortunately, it’s all the time we have today, but we’ll continue this journey of asking for a friend when we bring on two friends of ours, the “Ryans” with V/O, who we’ll ask about the idea of starting your own franchise or running a franchise. Thanks again for joining us today and remember, if you like this episode, please subscribe. Make sure to give us a five star rating and share with your friends.
Michael: You can also sign up for the ByrdAdatto newsletter by going to our website at byrdadatto.com.
Outro: ByrdAdatto is providing this podcast as a public service. This podcast is for educational purposes only. This podcast does not constitute legal advice, nor does it establish an attorney-client relationship. Reference to any specific product or entity does not constitute an endorsement or recommendation by ByrdAdatto. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. Please consult with an attorney on your legal issues. [00:31:00]
