Creating a Stronger Financial Practice in 2026

WEBVTT
00:00:02.879 --> 00:00:13.359
Hello and welcome to the Practice Marketing Podcast, highlighting successful strategies from North America's fastest growing clinics and experts so you can learn from their wins and power your practice growth.
00:00:13.519 --> 00:00:16.480
Hi, I'm your host, Neil Trickett, CEO of Practice Promotions.
00:00:16.640 --> 00:00:23.920
And today we're going to be talking with Eric Miller, the chief financial advisor and co-owner of Economologics Financial Advisors.
00:00:24.000 --> 00:00:30.320
And we're going to be talking about how you can create a stronger financial practice this year in 2026.
00:00:30.480 --> 00:00:42.320
So Eric has spent years helping physical therapy and other healthcare practice owners improve their financial health, increase profitability, and build long-term wealth from their practice.
00:00:42.560 --> 00:00:55.759
And as one of the original advisors at Economologics, Eric has helped guide hundreds of those healthcare professionals through important financial decisions, giving them the tools and strategies needed to create stronger, more sustainable businesses.
00:00:55.920 --> 00:01:03.200
We've worked with Eric for more than a decade now and his team for us ourselves and has helped us with our financial futures.
00:01:03.520 --> 00:01:26.959
And in this episode, we're also going to discuss creating that stronger financial practice for yourself and including common financial challenges that we see clinic owners face, how to improve your cash flow, and how the steps of finance in practice and how you can build a solid financial foundation for long-term success, not just for your business, but also your take-home pay and the life that you want to lead.
00:01:27.040 --> 00:01:28.799
So, Eric, welcome to the podcast.
00:01:29.040 --> 00:01:29.599
Thanks, buddy.
00:01:29.680 --> 00:01:30.400
It's good to be here.
00:01:30.560 --> 00:01:31.439
Good to see you.
00:01:31.680 --> 00:01:33.280
And I'm ready to talk money.
00:01:33.519 --> 00:01:34.000
Let's do it.
00:01:34.159 --> 00:01:36.000
And Eric has a great podcast too.
00:01:36.079 --> 00:01:41.200
He he talks for uh PT practice owners and different practice owners out there.
00:01:41.359 --> 00:01:43.280
So definitely follow him on his podcast too.
00:01:43.359 --> 00:01:45.040
He's got tons of great advice there.
00:01:45.200 --> 00:01:54.959
Um now, as you've coached a lot of PT practice owners across the years, what's been your sound piece of like your number one piece of financial advice that you give them?
00:01:55.280 --> 00:02:09.039
Well, I was gonna say don't borrow a million dollars unless you have a plan to pay it back, but uh I don't think that I mean that is kind of good advice, but I don't know if that's the best advice that I could come up with.
00:02:09.919 --> 00:02:21.120
Um I would say uh look, learn learn to run your household like like a business, I think is always going to be my best piece of financial advice.
00:02:21.280 --> 00:02:38.719
We get so lost in running the practice and become so overwhelming that we we do forget why why we own it and what we're trying to improve, and that's making sure that your household is is well taken care of financially and and never let it be um becoming an afterthought, so to speak.
00:02:38.879 --> 00:02:40.240
So that's the biggest challenge that I get.
00:02:40.400 --> 00:02:54.479
As you know, as a practice owner, you know, you were in the trenches and you're all you're just always trying to run the practice, grow the practice, everything's about the practice, and then our our households just like gets whatever is left over, and we we really try to like make sure that doesn't happen to two PT owners.
00:02:55.120 --> 00:03:11.039
I I would say for me, that was and and and Amy, my wife, I think that was really a critical change in my viewpoint when you told us that like 10 years ago, was that concept of that your household comes first, right?
00:03:11.199 --> 00:03:14.639
That's the that's the bank that gets paid before everything else.
00:03:14.800 --> 00:03:19.199
And then your your practice is the servant to that household, right?
00:03:19.360 --> 00:03:37.680
And usually, you know, we we're in this flipped mindset where you're right, like our practice, we think of it like that's the money machine, that's what's helping us serve people, but obviously at the end of the day get paid, and then you know, like it becomes this snowball where it'll eat all the cash that's going on in it, yeah.
00:03:37.919 --> 00:03:50.719
And then, you know, you're not giving yourself a strong salary, you're not taking dividends, and then you know, you're stressed at home because you don't have good financial income at home because the business is going through whatever it's going through at times.
00:03:51.039 --> 00:04:04.639
Um, but it if you change that mindset, like you taught us, that your house is first and it's that profit first mentality, like how this has a certain cash flow it needs to have, um, including your investments and everything.
00:04:04.719 --> 00:04:10.240
And then your business has to produce that increasing revenue towards the household.
00:04:10.319 --> 00:04:13.840
So I think that that is like the number one piece of advice that that I've got from you.
00:04:14.479 --> 00:04:16.240
And thank you for the title for the book, too, by the way.
00:04:16.399 --> 00:04:18.480
Because I think we took your advice on that as well, right?
00:04:18.720 --> 00:04:19.279
Household first.
00:04:19.439 --> 00:04:20.959
And uh Household first, love it.
00:04:21.199 --> 00:04:23.120
And yeah, look, real simple.
00:04:23.279 --> 00:04:27.439
The the practice makes the money, the household tells it where to go.
00:04:28.800 --> 00:04:29.199
Love it.
00:04:29.439 --> 00:04:30.399
Yeah, yeah.
00:04:30.720 --> 00:04:34.560
Sometimes we get so sucked into the mechanics of all the financial machine, right?
00:04:34.639 --> 00:04:36.319
Like we just forget the big picture.
00:04:36.959 --> 00:04:38.319
Sometimes we do.
00:04:40.319 --> 00:04:40.879
It's okay.
00:04:40.959 --> 00:04:42.160
We can always course correct.
00:04:42.240 --> 00:04:44.959
It doesn't take very long to change the directions on these things.
00:04:45.040 --> 00:04:50.879
There's a little bit of pain in it to start, but you know, once you get going, it's like anything else, automatic and systematic.
00:04:50.959 --> 00:04:59.120
It just kind of runs, and then you look back one day and there's like$200,000 sitting in your in a personal investment, and you're like, oh my god, this is kind of awesome, you know?
00:04:59.439 --> 00:05:03.279
You know, you I mean you've coached so hundreds and hundreds of practice owners, right?
00:05:03.360 --> 00:05:08.000
I I'm curious, have you do you do you find like that's a common thing?
00:05:08.160 --> 00:05:16.399
People coming in, they they want the they're they've heard the one, you know, piece of like they want the shortcut, right?
00:05:16.639 --> 00:05:22.720
Yeah, what's what's the one investment that's gonna make me a million dollars, or what's this one thing that's gonna change everything?
00:05:23.120 --> 00:05:25.439
Uh like is that something that you get commonly?
00:05:25.759 --> 00:05:32.560
It's often that, and I think as as things get harder in in our financial system that we're in, and they are.
00:05:32.639 --> 00:05:41.600
I mean, we have a horrible monetary and financial system in this country, the way it's set up right now, you know, and which we could probably just go off on a tangent in this podcast.
00:05:41.680 --> 00:05:44.800
But you know, it's just that money is being debased every single year.
00:05:44.959 --> 00:05:52.800
Thirty years ago, you and I, you know, could live on a on a hundred thousand dollar salary and feel like we're rich, and now it's just like you can barely get by on that.
00:05:52.879 --> 00:05:55.199
So I get this the struggle for that.
00:05:55.439 --> 00:06:00.720
Um so and I forgot the base of your question, but the uh uh what was that?
00:06:00.879 --> 00:06:03.839
Was it people were coming in like wanting to have that quick fix, right?
00:06:04.000 --> 00:06:06.720
Like the best investment that's gonna give me a 10% return.
00:06:07.279 --> 00:06:12.560
Yeah, the stress the stress is the stress is causing the the thinking of I just need a quick fix.
00:06:12.639 --> 00:06:14.879
I you know, I just need to make a big play here.
00:06:15.040 --> 00:06:25.439
And and I mean you can do that, but I I just think that the way that you handle money uh is always going to be, you know, of of utmost importance.
00:06:25.759 --> 00:06:35.519
And um, you know, I I don't know that there's just like there's not a magic pill for this, but I do I would say this it's it's you have to have alignment.
00:06:35.839 --> 00:06:47.040
And you know, the idea that it's gonna it should take like 30 years for you to be financially independent is a symptom of you not having alignment between the practice and your household.
00:06:47.199 --> 00:06:47.439
Okay.
00:06:47.839 --> 00:06:56.639
If if that's if you're on pace to be financially free in 30 years, then there's misalignment between what the practice is providing for your household.
00:06:56.879 --> 00:07:02.720
Honestly, you should be able to become financially free if you have a fairly viable practice.
00:07:02.879 --> 00:07:06.639
Um, your household should be financially free, I would say, in seven to ten years.
00:07:06.800 --> 00:07:17.680
Okay, where you don't have any debt, where you have plenty of money in reserves, where you have um basically a household that can operate all by itself.
00:07:18.079 --> 00:07:28.319
And, you know, okay, maybe it takes twelve, but it's certainly better than it taking this idea that it's that takes, you know, thirty uh I'm gonna be sixty-five before I'm financially independent.
00:07:28.800 --> 00:07:33.839
So just make sure that there's alignment between those two systems right there.
00:07:34.000 --> 00:07:38.000
And that's where I think a lot of owners don't have good alignment between those things.
00:07:38.319 --> 00:07:38.879
That makes sense.
00:07:39.040 --> 00:07:39.519
That makes sense.
00:07:39.759 --> 00:07:44.959
Do you see also uh just again in creating a stronger financial future for yourself?
00:07:45.040 --> 00:07:49.279
Like what can what can you do this year to to make your your business better, right?
00:07:49.360 --> 00:07:51.759
That's gonna impact your household, things like that.
00:07:52.240 --> 00:08:00.800
Do you see I because you know, being a PT, being a practice owner myself for years, um we're problem solvers, right?
00:08:00.959 --> 00:08:04.000
We love to DIY stuff, we love to try and fix problems ourselves.
00:08:04.160 --> 00:08:08.639
We love to try doing all the marketing ourselves so we don't try and rely on outside help.
00:08:08.879 --> 00:08:11.839
Is this is this like the same symptom in finance?
00:08:11.920 --> 00:08:13.920
Like, oh, I don't need an outside advisor.
00:08:14.000 --> 00:08:19.120
I can kind of figure some stocks or something myself or whatever I need to do financially with my business.
00:08:19.199 --> 00:08:20.879
Is it do people come to you with that?
00:08:21.360 --> 00:08:35.600
I mean, most people will have like maybe a local advisor that they're working with that's helping them with maybe some retirement plans and such, but they really don't have a good system in place of how to manage all of these things together.
00:08:35.840 --> 00:08:46.320
And they don't have like a real plan of like I mean, you know, I'm sure you asked this question, like what ideally what is the what is what is your financial, what's your ideal marketing scene look like?
00:08:46.480 --> 00:08:48.960
Well, I asked the same question on your financial scene.
00:08:49.519 --> 00:08:54.480
And I the answers I get are just like pretty symptomatic of the problem.
00:08:54.799 --> 00:09:00.879
It's not clear, it's not concise, it's there's it's not measured, it's it's it's confused.
00:09:01.360 --> 00:09:16.320
So I I think just getting clarity on some of those things and just like you said, you know, once an owner knows exactly what they need to do and and uh what what that looks like, they'll do it, they'll execute it if they have confidence.
00:09:16.960 --> 00:09:20.320
Um and because you guys are so smart, right?
00:09:20.480 --> 00:09:28.480
PTs are so smart, of course, that they sometimes get in their own way of trying to to do things themselves because you're used to that, right?
00:09:28.799 --> 00:09:44.159
But you you really can't I mean you can do that, you can spend all day on ChatGPT, which is like the worst invention right now for finan for solving financial problems because it just creates like seven pages of like, well, this could happen and that could happen.
00:09:44.320 --> 00:09:44.559
Yes.
00:09:44.720 --> 00:09:48.639
And I can just see now where it just creates so much confusion you know in the phrase.
00:09:48.799 --> 00:09:54.320
There's nothing like good practical experience too in in knowing what's gonna happen.
00:09:54.399 --> 00:09:57.840
It's like if you do this, this, and this, this condition will arise.
00:09:57.919 --> 00:10:00.399
I don't care what Chat GPT says, you know.
00:10:00.639 --> 00:10:09.120
So that's where I think real having you know real world experience and working with families and you know, like we have, like you have, is so invaluable to me.
00:10:09.440 --> 00:10:17.759
What is what does a strong finance um standing look like in a practice?
00:10:17.919 --> 00:10:23.360
Like, like, okay, because we can say, hey, you could have a strong financial practice, but what does that mean?
00:10:23.519 --> 00:10:26.159
Like what what kind of margins are we looking for?
00:10:26.320 --> 00:10:33.840
Like what kind of uh you know returns, what kind of like dividends, those kind of things that that should be coming off the practice into the household.
00:10:34.159 --> 00:10:44.399
Yeah, well, number one, there should be a lot of money uh coming in that is in excess of what the expenses are of that business, whatever it is.
00:10:44.639 --> 00:10:50.480
I mean, we always hear the margins, you know, of what of uh I mean, and they tend to go down.
00:10:50.639 --> 00:11:03.120
You know, I've had I've encountered now recently, maybe this happened about a year ago, uh, talking with some PT owners, and it's so amazing how fast like they'll hear something and then they'll adopt that as their mindset, like that's okay.
00:11:03.360 --> 00:11:10.799
Like saying, like, well, we made like a 7% profit margin, and you know, that's pretty good, you know, considering you know what's going on in the industry.
00:11:10.879 --> 00:11:14.639
And I'm just like thinking, like, oh my God, like what has happened?
00:11:15.039 --> 00:11:28.480
You know, like that's not you can say that, that's great, but seven percent is barely going to allow you to reinvest back into the business, pay your taxes, and maybe there's a little bit left over for you, but probably not.
00:11:28.799 --> 00:11:36.080
So it you know, you have to make sure that this this business is returning, you know, uh 20, 25 percent.
00:11:36.240 --> 00:11:42.320
I mean, let's like let's not cut it short uh with the risk that you're taking to be able to do that.
00:11:42.399 --> 00:11:43.120
Now, is that high?
00:11:43.279 --> 00:11:52.159
Maybe okay, but it certainly would allow you to, you know, I my mantra is build a practice to serve your life.
00:11:52.480 --> 00:12:05.039
And you got to build the practice to serve your life, and that means that the practice needs to produce a certain amount of money to allow your household to um you know be put into position where it's set for life.
00:12:05.279 --> 00:12:11.120
And so going back to your question, you know, I think certainly that profit margin is is really, really important.
00:12:11.679 --> 00:12:15.360
Um I can get into like how much I'd like to have in reserves and all those things.
00:12:15.440 --> 00:12:24.159
I don't know if you want to talk about that right now, but um, you know, that there's there's just certain that money is coming in easily, like there's there's good controls on it.
00:12:24.320 --> 00:12:28.720
You have like policies and procedures of um like approvals.
00:12:29.039 --> 00:12:42.639
There's just like a system like like uh like a CFO would do for a business that is controlling the the financial end uh of of the practice, like profit and loss statements are available uh easily.
00:12:42.879 --> 00:12:45.519
Um you know, there's there's just order.
00:12:45.679 --> 00:12:46.720
There's just order.
00:12:47.120 --> 00:12:49.840
You know, you can't you can't expand on chaos.
00:12:50.240 --> 00:12:54.799
And you know, that's the easiest thing to fix is just putting in good financial order into a practice.
00:12:55.200 --> 00:12:57.120
I think too that comes back to training, right?
00:12:57.200 --> 00:13:10.000
Because so as a when you kind of the typical scene for opening a practice and and even growing it through the years is that you were you were PT, you didn't like where you were working, so you thought you could do it better.
00:13:10.159 --> 00:13:14.639
You open up a business, and now you're treating patients, and then it starts to grow on you.
00:13:14.799 --> 00:13:17.919
You have to have employees, and I have to figure out how to run other people.
00:13:18.240 --> 00:13:22.799
Uh, then you you have the billing and insurance to learn, right?
00:13:22.960 --> 00:13:23.759
And all that.
00:13:23.840 --> 00:13:29.279
And then what took me a long time to to learn, I'm still learning a lot about it, is finance, right?
00:13:29.440 --> 00:13:47.440
Just even the terminology of finance and what was a profit and loss statement, and yeah, you know, what should the margins be, and like, you know, reserves and all these kind of like different, you know, financial terminology that you had to get used to and operate with and get better at and learn the whole skill of finance, right?
00:13:47.519 --> 00:13:48.960
In operating your business.
00:13:49.279 --> 00:13:55.519
You know, I'll say what you want about like corporations and such, but they they do know how to handle money pretty well.
00:13:55.600 --> 00:13:55.919
Yeah.
00:13:56.080 --> 00:13:57.279
And you can learn a lot.
00:13:57.360 --> 00:14:01.279
I have just watching them like buy practices and take over.
00:14:01.440 --> 00:14:03.440
And you know, I'll give you an example.
00:14:03.600 --> 00:14:16.720
One thing, you know, I've I've seen like any corporation that's bought like a PT practice, a big big corporation, you know, they they have like a 10% management fee that goes directly to the parent company, like the parent organization, you know.
00:14:17.039 --> 00:14:30.240
And I was always that was pretty validating to me because I like that's the first thing that I tell a lot of owners to do is to like take the first 10% of profit rev or uh uh revenue of the practice, pay that to your household, first and foremost.
00:14:30.480 --> 00:14:30.799
Okay.
00:14:30.960 --> 00:14:33.919
Uh, because I I learned that that's what corporate America does.
00:14:34.080 --> 00:14:36.159
You know, those are what these big corporations do.
00:14:36.240 --> 00:14:38.720
And you know, they you have to assign money a purpose.
00:14:38.799 --> 00:14:40.480
That's a that is an immutable law.
00:14:40.639 --> 00:14:43.440
If you don't assign money a purpose, it will disappear.
00:14:43.759 --> 00:14:54.159
And uh, you know, if you just understand some of these really simple, simple laws of money uh and you apply that to your practice, then you'll win the game.
00:14:54.399 --> 00:14:56.159
And if you don't, then you won't.
00:14:56.320 --> 00:15:00.720
And um those um those laws really aren't that difficult to learn.
00:15:00.960 --> 00:15:04.000
But um boy, they do what are some of the key ones there then?
00:15:04.080 --> 00:15:06.320
So they say like 10% towards your house to hold the plan.
00:15:06.639 --> 00:15:07.440
That's certainly one, you know.
00:15:07.519 --> 00:15:26.720
I think I I've touched on, you know, the uh, you know, make sure that money has a purpose, um, make sure that you put profit as a priority uh in the organization, make sure that you uh are utilizing um, you know, have the understanding that the practice is just is gonna try to con you talked about this, is gonna try to consume everything.
00:15:26.799 --> 00:15:28.000
It's okay, right?
00:15:28.240 --> 00:15:31.440
But one person needs to be in uh in control of the finances.
00:15:31.600 --> 00:15:38.559
You can't have multi you cannot have uh a financial committee trying to dictate things that that'll that'll break a practice.
00:15:38.639 --> 00:15:40.559
Somebody has to be in charge of the money.
00:15:40.960 --> 00:15:44.080
Um that that is uh that's really important as well.
00:15:44.399 --> 00:15:48.240
And uh just making sure that money has a place to go.
00:15:48.879 --> 00:15:56.080
And when you assign so for example, like you have taxes due every single year, every quarter.
00:15:56.240 --> 00:15:56.399
Okay.
00:15:56.720 --> 00:16:03.279
Like I don't uh I could probably bring up I get 10 new clients this month and I ask them, do you have a tax account?
00:16:03.519 --> 00:16:06.080
How many, you know, how many would probably say I have a tax account?
00:16:07.120 --> 00:16:08.399
Maybe two, right?
00:16:08.639 --> 00:16:08.960
Yeah.
00:16:09.120 --> 00:16:09.440
Okay.
00:16:09.600 --> 00:16:13.440
Like that is that's some that's a reality that you're gonna have to pay taxes.
00:16:13.679 --> 00:16:14.879
Or a reserve account.
00:16:14.960 --> 00:16:23.120
Do you have a business savings account that is there to for a purpose to make sure that this business can stay stable in in hard times?
00:16:23.679 --> 00:16:23.919
Okay.
00:16:24.480 --> 00:16:32.639
So just just setting up really, really simple things that allow money to go to a place and and having that, it creates a necessity.
00:16:32.799 --> 00:16:33.759
I have to pay this.
00:16:34.159 --> 00:16:37.679
I think you'd you'd said something like about like creating a bill.
00:16:37.840 --> 00:16:39.279
Like that's really, really important.
00:16:39.440 --> 00:16:45.759
Uh uh money does operate really, really well when it's when it's needed, when there's a necessity on there.
00:16:46.000 --> 00:16:49.440
And you know, trying to trick yourself into doing those things.
00:16:49.519 --> 00:16:55.120
I I know it's it seems like ridiculous, but you have to do it.
00:16:55.440 --> 00:16:56.159
Yeah, I totally agree.
00:16:56.240 --> 00:16:56.879
I think like so.
00:16:56.960 --> 00:17:06.480
If you want to create, if you're not doing this already for our audience out there, and you want to create a very strong foundation for your practice where you can go this year, like something that's super simple.
00:17:06.720 --> 00:17:12.960
You can, I mean, I read the the Profit First uh book, great book, super simple concept, right?
00:17:13.039 --> 00:17:28.960
Like just and like what you're talking about, which is create go open a few different uh money markets or check-in accounts or whatever you need to open, and just label them like one's a tax account, one's a reserve account, um, and then you have your operations account, whatever.
00:17:29.279 --> 00:17:32.559
And then every month a certain percentage, no matter what.
00:17:32.640 --> 00:17:33.759
Like, and I do it every week.
00:17:33.839 --> 00:17:41.519
So every week, a certain amount goes right in the tax account, it goes right in the reserve account, and then you have your other operating stuff, and you don't think about it, right?
00:17:41.599 --> 00:17:54.960
It's automated for you, and it's just happening, but then you don't like it's such a good feeling when I don't like paying taxes, but I don't have to like no you don't got this tax bill, and then where am I gonna get this money from?
00:17:55.279 --> 00:17:56.799
I never want to go through that again.
00:17:56.880 --> 00:17:59.680
I want to just make sure like there's something always set aside for that.
00:17:59.839 --> 00:18:02.079
Or hey, you know, something happened.
00:18:02.160 --> 00:18:06.240
Um, I mean, we've had practice owners that they had a fire, yeah.
00:18:06.400 --> 00:18:09.279
Their practice burned down, they couldn't operate for six months.
00:18:09.359 --> 00:18:13.359
Like, what do you have to cushion yourself and take care of your business?
00:18:13.440 --> 00:18:14.960
Obviously, insurance and things like that.
00:18:15.119 --> 00:18:22.799
But you know, there you could even you could have a down month, and and how can how can you coast through that if you don't have reserves in place?
00:18:23.519 --> 00:18:28.640
It is amazing to me how razor thin most practice owners are operating.
00:18:28.880 --> 00:18:46.480
And if you're listening to this, and uh I know that a lot of you are, you're razor thin, and you really don't, and you're like, well, we're just getting but we're making it right now, but I'm like, it's you're just you're a what a lawsuit, you're an audit, you are a medical emergency away from you know bad things happening.
00:18:46.559 --> 00:18:51.680
And I don't, you know, I don't like to operate on fear, but I just I I see the unpreparedness so much.
00:18:51.839 --> 00:18:52.160
Yeah.
00:18:52.480 --> 00:18:56.079
And it's really a a spot that you have to fix.
00:18:56.319 --> 00:18:58.480
And um, but it's not hard to do.
00:18:58.640 --> 00:19:02.640
You just have to, you know, put the good uh system in place for it to to rectify itself.
00:19:02.880 --> 00:19:12.319
One thing I've seen too, like once you once you kind of once you look at putting those better systems in place, even simple things like that, like that demand for income changes, right?
00:19:12.400 --> 00:19:21.599
And so you you realize like, oh, my business has to make this amount of money in order for us to fund the tax account in order to fund this on a weekly basis.
00:19:21.759 --> 00:19:24.720
And so this is what we really need to be, you know, earning and making.
00:19:24.880 --> 00:19:34.079
And and I see the the successful practice owners that we work with that we see that are crushing it are the ones that are more financially mindset.
00:19:34.480 --> 00:19:37.359
Yeah, and they also then know their worth.
00:19:37.759 --> 00:19:41.599
So if you know you need to, you got to kind of work backwards from everything, right?
00:19:41.680 --> 00:19:51.440
So, like if you know, hey, I've got to my business has to make this much money to to to bring the percentages into the household, to have enough in reserves, to have enough in the tax accounts.
00:19:51.599 --> 00:19:58.880
I work backwards from that all the way down to what do I need to earn per hour or per visit, right?
00:19:59.039 --> 00:20:00.880
And then then you can know your worth.
00:20:01.039 --> 00:20:14.720
So if if you have to make$65 or$70 per visit in order to have those percentages and cover your expenses and all that kind of stuff, then you're not gonna take that insurance that pays you$50 per visit.
00:20:15.119 --> 00:20:27.119
Like I'm gonna find a way to mark out market them, or maybe I need to bring in some cash lines of service or programs or things like that, or I need to renegotiate certain contracts, or I need to fire this particular insurance company to the network.
00:20:27.359 --> 00:20:29.440
It helps you make better decisions about your business.
00:20:29.759 --> 00:20:34.160
Yeah, and I I think that's it, you know, you have different payers, right?
00:20:34.240 --> 00:20:39.440
I don't know how people like categorize their payers like one, two, or three or a, b, and c.
00:20:39.920 --> 00:20:48.160
And I don't think there's any world that you should be ex accepting, you know, your lower tiers as as any more than 10% of your total reimbursement.
00:20:48.240 --> 00:20:56.400
Like if that's that'd be a good metric, I think, to start to to measure um, you know, whether or not you're gonna be profitable or not.
00:20:57.039 --> 00:21:00.799
Um, but yeah, I mean, everything you said is 100% accurate.
00:21:01.039 --> 00:21:01.440
Yeah.
00:21:01.599 --> 00:21:07.200
Uh so it all all everything you know touches each other.
00:21:07.279 --> 00:21:08.960
So like if you know the finance part of it, right?
00:21:09.039 --> 00:21:15.599
If you got the systems in place, if you know your KPIs, which you have to hit, yeah, then you can make those better decisions down the line, right?
00:21:15.680 --> 00:21:29.839
And one of the things that we see too, again, the real successful clinic owners that have 20% plus profit margins, they're figuring out a way to meet the demand of that per visit hour that they need to make, right?
00:21:29.920 --> 00:21:31.920
Or per like per hour or per visit.
00:21:32.079 --> 00:21:34.559
What is that dollar amount that they really need to make?
00:21:34.799 --> 00:21:38.480
It might be 100, 120 bucks an hour, 150 bucks an hour.
00:21:38.640 --> 00:21:40.000
Okay, now we know that metric.
00:21:40.079 --> 00:21:40.960
How do we get there?
00:21:41.039 --> 00:21:41.200
Right.
00:21:41.440 --> 00:21:45.119
And like I'm gonna like if I I can outmarket that.
00:21:45.519 --> 00:21:51.440
I know I can invest in my marketing, I can get certain kind of uh payer in here.
00:21:51.839 --> 00:21:54.480
Um, I can say, hey, you know what?
00:21:54.640 --> 00:21:59.759
I know that there's these other programs out there that I could sell sports performance, massage.
00:22:00.240 --> 00:22:04.000
Like whatever adjunct services to get that dollar per visit up.
00:22:04.240 --> 00:22:06.559
Like there's a lot of things that you can make better decisions around.
00:22:06.640 --> 00:22:16.000
But if you're if you're going the other direction where you're like, well, let's see how much money we can just make, and then we'll figure out what we got to pay on the other side of it.
00:22:16.559 --> 00:22:20.400
The top 10% of PT owners aren't just surviving, they're thriving.
00:22:20.559 --> 00:22:21.599
But what's their secret?
00:22:21.759 --> 00:22:36.400
Well, Neil Triggett's new Market to Grow book reveals how the top 10% of PT practices leverage marketing systems to simultaneously grow their new patients, attract top talent, and boost profit in their practice.
00:22:36.640 --> 00:22:38.400
You can learn from their secrets.
00:22:38.559 --> 00:22:44.400
Visit practicepromotions.net slash book to claim your free copy of Market to Grow.
00:22:44.559 --> 00:22:45.759
Yes, you heard that right.
00:22:45.839 --> 00:22:50.960
We are shipping a free copy of Market to Grow to all podcast listeners who want it.
00:22:51.200 --> 00:22:55.920
Just visit practicepromotions.net slash book to claim your free book.
00:22:56.079 --> 00:22:57.599
And now back to the show.
00:22:57.920 --> 00:23:05.119
Yeah, working backwards, I think, is so important and it is it is so beneficial to know.
00:23:05.279 --> 00:23:22.240
Uh and it's an it's an eye-opening thing too, because if I if I tell you that your actual make break number is probably about 15 to 20% higher than what you're operating with right now, it's a it's a jolt to the system and it makes you feel like, oh my gosh, like what do I have to do?
00:23:22.480 --> 00:23:34.240
But when you really break it down on a on a I mean we've done this a lot with people on a on a daily basis, it's like, yeah, I know you're short right now, about 10% of what you need to you where you need to be at.
00:23:34.400 --> 00:23:37.359
But when we break it down, it's really not that overwhelming.
00:23:37.440 --> 00:23:38.720
It's really not that much.
00:23:38.799 --> 00:23:44.240
It's just maybe you know, a few more patient visits uh a week or a day or something like that.
00:23:44.400 --> 00:23:48.160
When you break it down like that, it uh it just makes it more palatable for people.
00:23:48.799 --> 00:23:57.680
And so that that 10 or 15% difference you're talking about, like that's their their profit margin or reserves or whatever they need to be putting away, right?
00:23:57.759 --> 00:24:01.200
They actually you you build that into the expense of the business, right?
00:24:01.440 --> 00:24:03.440
It's the expense mindset of the practice.
00:24:03.519 --> 00:24:10.319
Like I need this amount to like survive, and I cannot I cannot accept a dollar less than that.
00:24:10.720 --> 00:24:10.960
Okay.
00:24:11.359 --> 00:24:12.799
That's not how most people operate.
00:24:12.880 --> 00:24:21.440
Most people operate with this is how much comes in, this is how much going out, whatever's left over, I guess I can uh maybe I can take some of that or I'll allocate it from there.
00:24:21.599 --> 00:24:21.839
Yeah.
00:24:22.000 --> 00:24:22.319
Okay.
00:24:22.559 --> 00:24:27.839
The other the other mindset is no, a dollar comes in and I have to give every dollar a job.
00:24:28.079 --> 00:24:38.319
And but the those first, you know, that that first 15 to 20 percent is going into things that are going to allow for the stability of the organization first.
00:24:38.480 --> 00:24:46.799
Because my first responsibility is making sure that this organization can stay in existence and that it can operate and it can operate well.
00:24:46.960 --> 00:25:03.519
And so I have to make sure that that first 15-20% is going into things that I'm dictating it's gonna go into reserves, you know, my household, taxes, reinvestment back into the business, you know, those things that are going to allow for further expansion and growth.
00:25:03.680 --> 00:25:09.279
That's that's a totally different method of handling money than what most PTs have ever been taught.
00:25:09.599 --> 00:25:10.000
100%.
00:25:10.319 --> 00:25:11.359
I mean, I was there, right?
00:25:11.440 --> 00:25:12.960
I did not operate that way at all.
00:25:13.039 --> 00:25:26.160
I the same philosophy that I think most of people that come to see you at the beginning are the same mindset, like, hey, well, my expenses, you know, for every dollar that I make, my expenses are like 95%.
00:25:27.200 --> 00:25:27.519
Yeah.
00:25:27.759 --> 00:25:35.519
I think 95 cents, or I spend 95 cents on the dollar with paying staff and everything else that rent and everything else I have to do.
00:25:35.680 --> 00:25:40.000
And then yeah, I got five cents left over at the day, and I, you know, I kind of take that home.
00:25:40.240 --> 00:25:54.079
But it's very different when you say, well, no, you know, you've got you've got 15 cents of that dollar is actually gonna go towards your household and your reserves first, and then the other 85 cents is what you get to work with.
00:25:54.400 --> 00:25:55.200
Figure it out from there.
00:25:55.440 --> 00:25:55.839
Figure it out.
00:25:56.160 --> 00:25:58.000
Yeah, you know, make more from there.
00:25:58.079 --> 00:25:59.599
Yeah, trim some expenses.
00:25:59.920 --> 00:26:05.279
And look, it and it's it's gonna it's gonna confront all the things in your practice that are wrong.
00:26:05.440 --> 00:26:16.960
It's gonna make you confront unproductive people, it's gonna make you confront ineffective marketing, it's gonna make you confront um bad payers, it's gonna make you confront a lot of these things.
00:26:17.200 --> 00:26:23.039
It will uncover the camouflaged hole that you have in your business once you do that.
00:26:23.279 --> 00:26:24.319
And it's okay.
00:26:24.480 --> 00:26:26.400
It's like, you know, things are gonna break.
00:26:26.480 --> 00:26:33.759
It's all right, but I'd rather that you uh I don't I don't want you to operate like that for 10 years and just think that that's normal.
00:26:33.920 --> 00:26:34.640
It's not.
00:26:35.359 --> 00:26:38.160
So that's why we have to change it so radically.
00:26:38.319 --> 00:26:41.119
And you know, some people can do it, some people can't.
00:26:41.440 --> 00:26:48.880
And if those of you that are able to like, okay, great, this this is what the ideal should look like.
00:26:48.960 --> 00:26:53.119
I'm not gonna accept anything else, they end up winning, you know.
00:26:53.599 --> 00:27:02.160
And the ones that don't just can, I mean, you've talked to them, they just they're it's just bad news and rainy and and terrible every single time you talk to them.
00:27:02.400 --> 00:27:07.279
Yeah, you can either be at cause over in practice, or you can be the effect of it, right?
00:27:07.440 --> 00:27:12.480
Yeah, I'm sure that most people who went into business wanted to be at cause uh over it.
00:27:12.640 --> 00:27:25.759
And but they get beat up over time and they again don't know some of these financial principles, so then you know they're working very hard, but they're not really they are they're they're not seeing the fruits of of what all the effort that they're putting.
00:27:26.000 --> 00:27:29.440
Like I could just I could just be a PT somewhere else and make the same amount of money.
00:27:29.599 --> 00:27:46.000
Yeah, and that's that's a pretty glaring indicator that you have a wrong, you're doing things incorrectly if you're in that condition where um I'm just I seem to be money's going in, money's going out, I take leftovers.
00:27:46.240 --> 00:27:47.359
That's a bad indicator.
00:27:47.759 --> 00:27:52.240
And have you seen too, I mean, we work with a lot of multi-location practice owners, right?
00:27:52.319 --> 00:27:56.319
And so obviously they're scaling up to one, two, three, four, five million dollars.
00:27:56.559 --> 00:28:02.000
The sophistication of finance becomes higher and higher, obviously, the bigger the revenue uh in there.
00:28:02.160 --> 00:28:17.440
But are there any like certain mistakes that you start to see those type of practice owners make that you know, I don't know, maybe they overextend themselves or are what could they be doing better to be stronger financially in their business?
00:28:17.759 --> 00:28:18.400
I think they do.
00:28:18.480 --> 00:28:22.240
There is some level of the reporting, maybe gets a little bit more sophisticated.
00:28:22.400 --> 00:28:28.720
I don't know that the that the rules of money change too much, even in that one to three to five million dollar range.
00:28:28.880 --> 00:28:30.960
Uh the same principles will apply.
00:28:31.119 --> 00:28:34.720
The business will try to spend everything that it makes and then some.
00:28:34.960 --> 00:28:36.640
So that's always going to be true.
00:28:36.720 --> 00:28:48.640
And you know, there's definitely a a uh trying to expand too fast, I've seen, uh, and without getting, you know, like one location up to a certain level of stability.
00:28:48.720 --> 00:28:50.799
You know what that is, you know, I'll leave that up to you.
00:28:50.880 --> 00:28:58.400
I like to see it at least getting up to about I don't know, maybe 90% of its of a capacity before I'd start looking at other locations.
00:28:58.640 --> 00:29:01.440
But you know, I get yelled at all the time by people on that one.
00:29:01.519 --> 00:29:03.359
So I don't know.
00:29:03.519 --> 00:29:10.000
But like I mean, people will uh chase chase the status of I'm a multi-location.
00:29:10.640 --> 00:29:11.680
I have multi-locations.
00:29:11.839 --> 00:29:12.240
I know.
00:29:12.319 --> 00:29:19.200
I I'd rather have one big big location that's super profitable, gotta be a lot easier to manage, wouldn't it?
00:29:19.279 --> 00:29:21.519
Yeah, than than having the multi-location thing.
00:29:21.599 --> 00:29:24.720
But there is a status of like we're a multi-location PT practice.
00:29:24.799 --> 00:29:25.839
So I go, that's fine.
00:29:25.920 --> 00:29:30.000
But I've had people have 10 multi multi-praxes at a 3% margin.
00:29:30.079 --> 00:29:37.680
Like you just have a you have 10 headaches that are you know, and this and no value.
00:29:37.839 --> 00:29:38.160
None.
00:29:38.319 --> 00:29:39.440
There's no value there.
00:29:39.680 --> 00:29:45.440
Like, and then you're now you're just running, but you do have multi- you do have multi-location, so congratulations.
00:29:45.759 --> 00:29:49.039
But like there's that is that the result that you're really looking for?
00:29:49.119 --> 00:29:52.079
So it just goes back to like what result are you looking for?
00:29:52.319 --> 00:29:57.920
You know, and that's why you just it's so important to measure the financial progress of your household.
00:29:58.400 --> 00:30:01.680
And don't forget that, you know, and that's how I was like so happy.
00:30:01.759 --> 00:30:06.480
Like when you guys paid off your house, you know, it was like, God, that's such progress.
00:30:06.559 --> 00:30:07.279
I feel so good.
00:30:07.519 --> 00:30:07.839
Yeah.
00:30:08.079 --> 00:30:10.400
You know, like it's it's an amazing feeling.
00:30:10.559 --> 00:30:11.039
Yeah, absolutely.
00:30:11.200 --> 00:30:12.880
So there's got to be progress at the household.
00:30:13.119 --> 00:30:13.680
Yeah, yeah.
00:30:13.839 --> 00:30:25.279
Cause I mean, that's you you have to think about it too, like you know, with your partner, your spouse, usually, you know, having kids, there's a lot of demand for income, right?
00:30:25.519 --> 00:30:34.559
And I think the worst place that I I've been in too, like in in certain years, is when you're struggling at home with finding a job, right?
00:30:34.640 --> 00:30:42.160
And you're like, God, you know, I'm putting all this effort into this business, it's sucking all these hours away from my family, and you get frustrated, right?
00:30:42.240 --> 00:30:48.160
You get this frustrated point because the business is not producing for the home, right?
00:30:48.240 --> 00:30:55.359
The lifestyle that you're supposed to achieve because of all this you know, hard work and extra effort you're putting in as an entrepreneur.
00:30:55.759 --> 00:31:05.119
And so I think that's you know, again, for our audience out there, thinking with the household first, the house is better protected, right?
00:31:05.279 --> 00:31:05.680
Yes.
00:31:05.920 --> 00:31:13.839
And your family will be more on your side, they'll understand the commitments that come from the entrepreneurial lifestyle, right?
00:31:14.000 --> 00:31:14.720
That are needed.
00:31:15.039 --> 00:31:20.880
And at times there's more bloodsweat equity that needs to be put into the business to get it to that next level, right?
00:31:21.200 --> 00:31:21.599
There is.
00:31:21.839 --> 00:31:24.799
And look, there there's risks of ownership, of course.
00:31:24.960 --> 00:31:30.400
There's risks of not ownership, you know, and you gotta choose what your risks are gonna be.
00:31:31.119 --> 00:31:37.839
And uh I I I would choose ownership and all the responsibilities that come with that.
00:31:38.079 --> 00:31:45.440
Um but just knowing that you do have some control over your outcome and it's not an unwinnable game.
00:31:46.000 --> 00:31:58.079
And that I think that's you know, probably the one area that I I'm starting to see people succumb to the fact that they think it's a bit of an unwinnable game right now.
00:31:58.240 --> 00:31:59.039
And it's really not.
00:31:59.200 --> 00:32:04.559
It really I mean you got you got plenty of I have clients, you have clients crushing it.
00:32:04.720 --> 00:32:06.960
Yeah, crushing it, you know.
00:32:07.200 --> 00:32:07.519
Absolutely.
00:32:07.759 --> 00:32:09.200
And so it can be done.
00:32:09.359 --> 00:32:09.839
It really can.
00:32:10.319 --> 00:32:19.920
We I'll tell you one thing, like you got the pessimists out there that all reimbursement with decline, you know, we can never get out from underneath this, the student loan debt.
00:32:20.079 --> 00:32:20.960
Yeah, there's problems.
00:32:21.119 --> 00:32:21.599
I get it.
00:32:21.680 --> 00:32:27.119
Yep, but like you said, we have people that we know clients that are crushing it, right?
00:32:27.680 --> 00:32:29.200
And they're evolving.
00:32:29.599 --> 00:32:33.359
You know, we're in a we can't do business like you did 10 years ago, right?
00:32:33.440 --> 00:32:37.119
You you you can't operate a PT practice like you did 10 years ago.
00:32:37.279 --> 00:32:38.640
You have to be dynamic.
00:32:38.720 --> 00:32:44.960
You have to there's but we we've never had more opportunity now than than ever before.
00:32:45.119 --> 00:32:56.000
And we've got a three trillion dollar health and wellness industry that needs our help, that are so willing to pay for the services that we can provide them.
00:32:56.319 --> 00:32:58.400
And what are you doing to tap into that?
00:32:58.480 --> 00:33:00.400
That's my question to all the practice owners.
00:33:00.559 --> 00:33:06.400
What are you doing to tap into that massive market because someone else will, right?
00:33:06.480 --> 00:33:25.359
You know, your your gyms, your health spas, your, you know, your athletic trainers, your gyms, you know, you've got sports performance, you've got people that want to pay cash for alternative medicine help, they want to be fit, they want to be well, they want nutrition, they want to have weight loss.
00:33:25.440 --> 00:33:33.680
I mean, there's so many avenues that we could incorporate into our practice that people are willing to pay for, that have great profit margins.
00:33:33.920 --> 00:33:36.079
You just have to think outside the box, right?
00:33:36.160 --> 00:33:42.480
And I'm such a big proponent for the future of our profession that we can't be an insurance model anymore.
00:33:42.720 --> 00:33:52.559
Like that could be part of what we do, but the clinics that I see that are crushing it are bringing 15-20% of what they make in as cash, service lines.
00:33:53.119 --> 00:33:54.160
I was just gonna mention that.
00:33:54.240 --> 00:33:56.079
I think that's another metric you can look at.
00:33:56.160 --> 00:34:04.000
Like, I don't think any if you're at least 10% of your overall revenue should be coming from non-reimbursed services at this point in time.
00:34:04.079 --> 00:34:05.359
And if it's not, okay.
00:34:05.519 --> 00:34:17.199
That's an area you can get into, and it will help with cash flow, you know, but by doing that, it'll certainly should drive up your you know your uh per person reimbursement rate by doing that.
00:34:17.599 --> 00:34:19.760
And there's plenty of services that you can do.
00:34:19.920 --> 00:34:21.280
I mean, I'm a financial advisor.
00:34:21.440 --> 00:34:29.519
I mean, I can uh you guys know better than I do the the things, but I I know that there's plenty of things that you can you can do to drive that number up.
00:34:29.679 --> 00:34:32.400
See, there's so it's you can win.
00:34:32.639 --> 00:34:33.199
Absolutely.
00:34:33.360 --> 00:34:35.519
Yeah, it's huge, huge opportunities right now.
00:34:35.599 --> 00:34:39.280
And again, like the we have clinics that are absolutely crushing it when it comes to this stuff.
00:34:39.440 --> 00:34:42.480
They're great at marketing, they're great at selling within the clinic.
00:34:42.719 --> 00:34:48.000
Those are the I'd say those are two critical skills that you need to develop in your business right now.
00:34:48.159 --> 00:34:57.039
If you're gonna survive and thrive into the future, the better that you get at marketing your business and branding it and and capitalizing on all these markets out there, you're gonna win.
00:34:57.199 --> 00:35:05.119
The better you train your front desk and your therapists on how to sell additional services, which they never really were good at before, right?
00:35:05.199 --> 00:35:10.800
We had it cushy because a doctor would send us a referral and you know, we're just gonna treat you.
00:35:11.039 --> 00:35:15.679
But you gotta like every other profession has to sell their services.
00:35:15.920 --> 00:35:16.880
Yes, right.
00:35:17.199 --> 00:35:20.480
Um, you know, so like we just got to get better at that.
00:35:20.559 --> 00:35:21.599
It's just training, right?
00:35:21.679 --> 00:35:29.440
You just gotta train your team better and find the right people that fit that model that can sell well and communicate well with patients.
00:35:29.599 --> 00:35:31.760
Um, and selling is a good thing, right?
00:35:31.840 --> 00:35:38.880
It's not and people like think of it as bad, it's a very good thing because you're helping someone get what they want to accomplish, right?
00:35:38.960 --> 00:35:45.679
So they want to get out of pain or they want to be faster, fitter, they want to live longer, they want to have a greater quality of life.
00:35:46.000 --> 00:35:47.440
Sell them that, right?
00:35:47.599 --> 00:35:53.599
You have the you have the skills, you have these incredible services that you can offer them.
00:35:53.840 --> 00:35:57.599
I mean, just think about, I mean, we we have clients that are doing medical wellness.
00:35:57.840 --> 00:36:04.239
So all the people that are overweight, they have heart conditions, they have diabetes, just that right there.
00:36:04.400 --> 00:36:11.599
There's so many people that could be living a better life if we were part of their solution, and they will pay for that, right?
00:36:11.679 --> 00:36:16.960
Because the medical system is broken and it's not helping them get better, it's just making them sicker.
00:36:17.119 --> 00:36:28.880
So, again, we have these incredible opportunities, but again, you just have to look at that as part of your business's ability to generate revenue towards the household, right?
00:36:29.119 --> 00:36:30.719
Which again comes back to what we're talking about.
00:36:31.039 --> 00:36:38.559
Uh, Eric, just um keeping along these lines of creating a stronger business, you get what you measure.
00:36:39.440 --> 00:36:46.239
So, from a financial metric standpoint, what are some of the key things a PT owner should be tracking regularly?
00:36:47.679 --> 00:36:49.920
Uh, from a financial perspective, yeah.
00:36:50.159 --> 00:37:00.400
Um for well, uh look, I mean, I think certainly uh a reserve amount in the business is is a good metric of how much I should be how much I should have in reserves.
00:37:00.480 --> 00:37:07.280
I like to see people have at least two months of business reserves sitting in in a money market account of some kind.
00:37:07.440 --> 00:37:13.519
I think that's certainly a um a valuable uh uh metric that anybody can do.
00:37:13.760 --> 00:37:21.199
You know, as far as debt is concerned, you know, I uh having business debt is I'd like to see that at zero.
00:37:21.360 --> 00:37:22.320
I know it's required.
00:37:22.400 --> 00:37:32.880
This is not like real estate, but certainly, you know, I don't want to encumber too much of the cash flow towards um towards just paying things off every single month.
00:37:33.360 --> 00:37:40.480
So not having a a huge amount of uh loan overhead, I think is a is an important metric to look at.
00:37:40.639 --> 00:37:43.760
You know, how much how close are you to having the business completely debt-free?
00:37:43.920 --> 00:37:50.159
You know, if you bought a practice and you're paying it off, I understand that, but you know, just not overburdening the the practice.
00:37:50.480 --> 00:37:53.440
Um what are some other metrics that that we can look at?
00:37:53.679 --> 00:37:58.880
I think I'm mostly on the household side, we certainly look at like um tax rate, effective tax rates.
00:37:58.960 --> 00:38:00.320
How much are you keeping?
00:38:00.480 --> 00:38:09.440
That's a really, really key one uh because sometimes your financial team you know isn't being very proactive on minimizing your tax liability.
00:38:09.599 --> 00:38:21.599
Taxes can be a big expense, especially in states that have both a big state tax and you know you're in that federal income tax bracket where you know you're probably creeping up to 30, 35 percent somewhere around there.
00:38:22.320 --> 00:38:28.639
So measuring that total amount is you gotta be aware of that so that you can do some proactive things there.
00:38:28.880 --> 00:38:31.360
We pray for our California practices out there.
00:38:32.079 --> 00:38:34.480
We do we do pray for our California practices out there.
00:38:35.679 --> 00:38:43.280
We pray for California, we pray for Minnesota, we pay for New York, we pray for soon to be Virginia, I think it is right right there.
00:38:43.519 --> 00:38:43.760
Thank you.
00:38:43.920 --> 00:38:44.400
Yeah, I know.
00:38:44.880 --> 00:38:47.119
Yeah, we we pray for all of you.
00:38:47.360 --> 00:38:56.480
Uh but uh you know, those are those are I think some really, really key metrics to that that you can look at, you know, internally in the practice.
00:38:56.639 --> 00:39:12.079
I think a marketing one, I mean you tell me, you know, I'd like to see you know uh new patients coming in, and and there should be like a ratio of like the new patients you're bringing in, should like 70, I don't know, maybe it's 70 percent, seven out of ten should be new new patients, you know.
00:39:12.559 --> 00:39:28.400
Yeah, actually, you know, so so one thing that we try to uh really encourage uh practice owners to to look at, and and this has gotten way better over the years, but um you you want to just like smart financial decisions, you want to diversify where your income comes from.
00:39:28.639 --> 00:39:36.719
So if you have income from one source, you're always at trouble of that one source breaking or something happening, and then you're having trouble, right?
00:39:36.960 --> 00:39:38.320
Same thing with like marketing.
00:39:38.480 --> 00:39:54.239
So you want to make sure that I would say at least 50% of the people that are new people or people that are coming in for new services with your business are actually um within your customer profile, right?
00:39:54.320 --> 00:39:56.800
So that you're basically your past patients.
00:39:57.360 --> 00:40:11.920
If you get your clinic into a position where you have about 50% of them coming in for repeat services and sending a friend and family member to replace themselves, you are in an incredibly strong position there.
00:40:12.000 --> 00:40:17.599
And that's where a lot of practices can be very successful just in that alone.
00:40:17.840 --> 00:40:25.679
And there's other practices which don't do much with their patient marketing, so that that number is small and they they kind of have to keep working so hard to get new patients in the door.
00:40:25.760 --> 00:40:47.679
But 50% or more should be past patients and referrals from those patients coming in, and then getting your your where you can have direct to consumer marketing, bringing in say about 40, 35, 40 percent of your new patients coming in, and then 10, 15 from referral sources, whether that's physician groups or networks that you're part of, something like that.
00:40:47.840 --> 00:40:51.760
I think that gives you a real good diversification and where you get new patients in the door.
00:40:52.000 --> 00:40:52.320
Yeah.
00:40:52.400 --> 00:40:53.119
Um like that.
00:40:53.360 --> 00:41:00.960
And you can it's scalable that just grows your business, it grows your business, and and you can do that across, you know, it's harder when you start a new location because you're brand new.
00:41:01.039 --> 00:41:06.960
You don't have the the patient base yet to put to build upon, but you can do that relatively quickly.
00:41:07.039 --> 00:41:14.159
So you do have to invest more to get that new location up and running with new patients, but then they should start to repeat, right?
00:41:14.239 --> 00:41:15.760
And bring in friends and family.
00:41:16.000 --> 00:41:16.559
Yeah.
00:41:16.800 --> 00:41:24.400
And then look, I think the collection, obviously, you have to collect money and you can't be afraid to get it in the door, and you have to be dogged about it.
00:41:24.559 --> 00:41:30.000
And that's where I think a lot of people also like I mean, like uh Erica, how much should I collect?
00:41:30.079 --> 00:41:31.679
I'm like, all of it.
00:41:32.400 --> 00:41:33.519
Absolutely.
00:41:33.840 --> 00:41:34.719
You did it, right?
00:41:34.800 --> 00:41:39.440
You worked for like well, it's like 90% good.
00:41:39.519 --> 00:41:40.320
I'm like, no.
00:41:40.559 --> 00:41:41.760
Like, how about 95%?
00:41:41.920 --> 00:41:43.599
I'm like, no, like a hundred.
00:41:43.760 --> 00:41:58.400
And I know okay, it's not always realistic, but let's let's make sure, like, where our our viewpoint is no, um you're paying your co-pays, you're you're paying for the service, and we're not giving it away uh for whatever reason.
00:41:58.639 --> 00:42:04.320
And that I think that's where training your people, you know, and having that viewpoint is really, really key as well.
00:42:04.880 --> 00:42:06.719
Like, hey, your pay is tied to this too.
00:42:06.800 --> 00:42:11.679
I can't give raises, I can't, you know, do fun things for the organization if money's not coming in the door.
00:42:11.760 --> 00:42:14.800
Yeah, so bonus your building people, bonus your front desk.
00:42:14.960 --> 00:42:15.280
Yeah.
00:42:15.440 --> 00:42:21.199
That to for on collections and and uh you know um appointments held, things like that.
00:42:21.599 --> 00:42:28.800
I you know, I think that's a key thing for for for for any business is to really bonus your staff uh on performance, right?
00:42:28.880 --> 00:42:38.719
But especially, I know a lot of practices don't do that, they're just kind of straight salary, but think about it, like even for those key positions that on collections, right?
00:42:38.800 --> 00:42:40.400
So front desk is on collections a lot.
00:42:40.480 --> 00:42:46.639
Sometimes you have a billing person that's helping out with collections, but they don't, you know, it doesn't have to be a big bonus, but it could be enough.
00:42:46.719 --> 00:42:49.199
Just what what's the incentive there for them to perform better?
00:42:49.360 --> 00:42:59.920
And and gosh, if you go from 90% collections to 95% collections, that's and you paid a hundred bucks extra, you know, uh a month or a week, whatever you want to give them.
00:43:00.159 --> 00:43:04.639
That's that's you know, that's money that was never gonna be collected before, but now you got it.
00:43:04.800 --> 00:43:05.199
Yeah.
00:43:05.440 --> 00:43:09.760
The biggest expense you have is money that you should have made and you didn't.
00:43:10.239 --> 00:43:13.199
And that is a another fact.
00:43:13.360 --> 00:43:13.599
Yeah.
00:43:13.760 --> 00:43:15.119
That a lot of people kind of forget.
00:43:15.440 --> 00:43:22.159
Let's talk about that for a second, because that's something that I learned from you um also a long time ago.
00:43:22.320 --> 00:43:27.280
And that's um say that say that sentence again for me, because it was it's huge.
00:43:27.840 --> 00:43:32.239
So the big so the most people when I ask them their biggest expense, they're oh that's easy.
00:43:32.320 --> 00:43:33.840
My payroll is my biggest expense.
00:43:33.920 --> 00:43:38.239
It's 70% and you know, or whatever, uh, you know, overhead.
00:43:38.320 --> 00:43:48.239
Or I'm like, well, uh, you know, in all actuality, you know, you can make an argument that the biggest expense you have is money that you should have made and you didn't.
00:43:48.480 --> 00:43:48.800
Okay.
00:43:49.519 --> 00:43:59.760
So uh, you know, all of most of you own uh have a facility that has a certain amount of square footage, and you can see so many people.
00:44:00.239 --> 00:44:01.280
You have so many slots.
00:44:01.360 --> 00:44:03.360
However, you decide that you want to do that, right?
00:44:03.440 --> 00:44:05.119
You have so many slots in a day.
00:44:06.159 --> 00:44:12.159
What is your capacity level right now compared to where it should be for it to be at pretty close to full?
00:44:12.400 --> 00:44:12.639
Okay.
00:44:13.119 --> 00:44:35.760
And the difference between where you're at right now and what it should be at at near full capacity is an expense because that's money that for whatever reason, bad marketing, not hiring enough people, not being able to keep enough people, bad onboarding, um, losing people all the time, whatever.
00:44:36.239 --> 00:44:36.559
Okay.
00:44:37.519 --> 00:44:56.800
That that sweet spot right there, you know, is the difference between people that are um flourishing in their household, have you know retirement set, are paying off debt faster, have nicer cars and homes and all these things, is that that sweet spot right there.
00:44:56.960 --> 00:44:57.920
So fix that.
00:44:58.079 --> 00:44:58.400
Yeah.
00:44:58.559 --> 00:44:58.880
Okay.
00:44:59.119 --> 00:45:02.239
And and and once you do, uh great.
00:45:03.039 --> 00:45:04.639
Your life just gets infinitely better.
00:45:04.719 --> 00:45:05.760
But it is a big expense.
00:45:05.840 --> 00:45:17.679
You know, if I have a practice that should be doing$150,000 in revenue a month or has the potential to do that, and I'm doing$75,000 or$100, you know, that's a$50,000 loss.
00:45:18.000 --> 00:45:22.719
Now it doesn't, you can't write it off at the end of the year, but it's a loss.
00:45:22.880 --> 00:45:23.280
Yeah.
00:45:23.519 --> 00:45:25.199
So just think with that.
00:45:25.360 --> 00:45:25.519
Yeah.
00:45:25.760 --> 00:45:29.679
And I think once once you do, you'll you'll try to fix it as fast as you can.
00:45:29.840 --> 00:45:33.199
Yeah, and I love it because it's a totally different way of looking at things, right?
00:45:33.280 --> 00:45:39.519
Because and we encounter this all the time when trying to help someone understand like the benefits of of investing in their marketing, right?
00:45:39.679 --> 00:45:49.039
Because have you really calculated out what your whole practice space should be making, right?
00:45:49.119 --> 00:45:52.239
Because a lot of times they'll be like, hey, I've got a 3,000 square foot facility.
00:45:52.320 --> 00:45:54.880
I've like, I got four providers in it.
00:45:55.119 --> 00:46:01.599
Okay, well, if you had more providers and you're completely full, like what could the facility produce, right?
00:46:01.760 --> 00:46:05.039
And they're, oh, well, yeah, but my therapist can be busy with what they have.
00:46:05.199 --> 00:46:07.920
Like, well, couldn't you hire three more therapists and fill that space?
00:46:08.079 --> 00:46:08.960
Yeah, yeah, I could do that.
00:46:09.039 --> 00:46:16.480
Well, so that's that's revenue that you could be making if you had everything working towards it, but you're not, right?
00:46:16.559 --> 00:46:19.440
And so that that's that's a key thing, too.
00:46:19.679 --> 00:46:27.679
So um here's a here's a number for our audience that can be very helpful, and that is just it's it's just a roundabout number, it just gives you an idea.
00:46:27.920 --> 00:46:33.280
It can depend on your model of how your practice operates, what how efficient you are.
00:46:33.599 --> 00:46:40.880
But typically around a hundred patient visits um per week per thousand square feet.
00:46:41.119 --> 00:46:48.480
So if you have a 2,000 square foot facility, you should be making over 200 patient visits per week.
00:46:48.639 --> 00:47:02.000
And let's just say you have two therapists in there, maybe they're doing 100 patient visits, but you could probably get another, you know, two therapists in that to get you up to that 200 patient visits, you know, per week that are needed in that space.
00:47:02.159 --> 00:47:08.800
So I think that's a great way to look at the potential for your practice, your business, and where you need to be going towards.
00:47:08.880 --> 00:47:18.960
And that helps you make better decisions again, like, oh, I need to increase my marketing so that I can drive more new patients in, or I can attract more therapists here, and then I can maximize my space.
00:47:19.119 --> 00:47:26.639
I can maximize the efficiency, the labor ratios within this space, and then that's gets me closer to that earning potential.
00:47:26.880 --> 00:47:29.760
Yeah, it will help all your ratios when you do that.
00:47:30.159 --> 00:47:30.719
It really will.
00:47:30.880 --> 00:47:36.079
It'll it'll everything will balance out as it should, you know, once you get to that number.
00:47:36.320 --> 00:47:36.800
Yeah.
00:47:37.039 --> 00:47:41.920
Um, one other thought here that I again I I learned from an accountant.
00:47:42.079 --> 00:47:46.400
Um, he wrote a great book called Simple Numbers, uh, Greg Rabtree.
00:47:46.559 --> 00:47:49.679
And uh it's your labor efficiency ratio.
00:47:49.920 --> 00:47:58.880
And he did a a lot of stuff is calculated off sometimes bigger corporations and how they operate, which is very different than a small business runs, right?
00:47:59.199 --> 00:48:10.400
And so he actually did a lot of study over hundreds of small businesses, and what are some of the key factors that make those businesses highly profitable?
00:48:10.719 --> 00:48:18.639
And the key one, especially for us in physical therapy, is that we we're very heavy on high uh professional labor, right?
00:48:18.719 --> 00:48:21.280
And then the support of that high professional labor in there.
00:48:21.440 --> 00:48:41.199
So your labor efficiency ratio is a key metric for you to understand, the the higher that labor efficiency ratio is towards the number two, and there's there's formulas and how to do it in his book and everything, but the higher you are to the number two, uh, the more profitable you're basically gonna be.
00:48:41.280 --> 00:48:50.800
And so when a business gets very low on their labor efficiency ratio, getting down to like 1.5 or lower, that's when they really are struggling financially.
00:48:51.119 --> 00:48:56.719
So that's a key thing for you to be looking at is your labor efficiency ratio uh in your practice.
00:48:57.039 --> 00:48:58.880
So great book, simple numbers.
00:48:59.679 --> 00:49:00.400
Very cool.
00:49:00.639 --> 00:49:01.199
Yeah.
00:49:01.440 --> 00:49:06.320
Um, so kind of wrapping up and tying things together here, uh, Eric.
00:49:06.400 --> 00:49:13.119
So just kind of what are some key things that a a practice owner needs to be looking at here over the next 12 months?
00:49:13.440 --> 00:49:14.960
Where where could they basically start?
00:49:15.440 --> 00:49:22.079
Yeah, let's um you know, I think the first thing to do is just get a hold of uh all of your numbers.
00:49:22.239 --> 00:49:31.199
And what I mean by that is just can try to try to just make sure that you bring some semblance of order to your finances.
00:49:31.519 --> 00:49:40.159
And that just means that from a household perspective, you know, if you haven't like done a net worth statement in a while, like do one.
00:49:40.400 --> 00:49:42.400
You know, like let's look and see where you're at.
00:49:42.480 --> 00:49:46.480
Like how much do you have in assets, how much do you have in liabilities, what does that look like?
00:49:46.800 --> 00:49:53.840
Okay, and at least it gives you a grasp of um where I stand financially for sure.
00:49:54.079 --> 00:49:57.199
I think on the practice side, you know, I would I would do the same thing.
00:49:57.280 --> 00:50:05.519
You know, we went over some metrics today, and you know, let's let's take a look at you know, maybe that uh uh that employee ratio.
00:50:05.599 --> 00:50:06.400
Where where are we?
00:50:06.480 --> 00:50:12.639
I mean, how much of our money is going towards things that are that are going to produce more value for the business?
00:50:12.800 --> 00:50:18.159
And really, really, you know, really, really get granular on that.
00:50:18.320 --> 00:50:23.599
Like like I said this before, you got to give every dollar a job when it comes in.
00:50:23.840 --> 00:50:32.159
And make sure that that that dollar is going to create something more valuable for your practice and that it's going to good use.
00:50:32.239 --> 00:50:34.719
And just be really, you know, be mindful of that.
00:50:35.039 --> 00:50:38.000
And don't be so carefree of of money, you know.
00:50:38.079 --> 00:50:46.400
And I don't want you to like sit there and nitpick every single expense that you have, because uh you cannot expense your way into prosperity at all.
00:50:46.559 --> 00:50:47.280
You just can't.
00:50:47.360 --> 00:50:49.360
You can try, but you can't do it.
00:50:49.519 --> 00:50:57.519
Um, but you do have to be mindful of things that are creating an enormous amount of value for yourself, both on a household level and at the business level as well.
00:50:57.760 --> 00:50:58.239
Awesome.
00:50:58.400 --> 00:50:59.599
Great advice there, Eric.
00:50:59.840 --> 00:51:08.320
And so I know you have um tons of free training and other trainings, right, to help practice owners uh with their financial condition.
00:51:08.480 --> 00:51:12.719
So, what's some of the best ways for a practice owner to get some of your training?
00:51:13.280 --> 00:51:16.800
Well, they can certainly go to our website, Ecologics Financial Advisors.
00:51:17.039 --> 00:51:20.000
And we have, I mean, I just wrote a book called Household First.
00:51:20.079 --> 00:51:22.480
Uh, you can certainly go to, and I think it's on Amazon right now.
00:51:22.639 --> 00:51:24.159
I'm assuming it's on Amazon right now.
00:51:24.239 --> 00:51:25.920
If it's not, I got a big problem.
00:51:26.239 --> 00:51:29.119
Uh and you can get a you get you can get a copy of this.
00:51:29.199 --> 00:51:34.079
We this one is for veterinary practice owners, but we have one for physical therapists as well.
00:51:34.400 --> 00:51:37.280
So uh that would be uh a great way to do it.
00:51:37.440 --> 00:51:42.079
And then we do a podcast called the Financial Beast Podcast, which of course you'll be on, I think, next week.
00:51:42.400 --> 00:51:52.639
And then we do, you know, we'll do webinars and you know, we go to conferences, we're going to TherapyCon in a few weeks, and of course we'll be at PPS.
00:51:52.719 --> 00:51:58.800
So we're in the we're in the industry, we know the industry, and you know, uh we love PTs.
00:51:59.039 --> 00:52:02.400
You know, you guys make people's people free of pain.
00:52:02.559 --> 00:52:02.719
Yeah.
00:52:02.880 --> 00:52:05.440
So we're trying to free your financial pain.
00:52:06.400 --> 00:52:06.960
I love it.
00:52:07.039 --> 00:52:08.480
Yeah, we love PTs too.
00:52:08.639 --> 00:52:13.679
Uh definitely check out econologics, financial uh advisors.com.
00:52:13.840 --> 00:52:15.519
That's where you get a ton of the free training on there.
00:52:15.679 --> 00:52:18.079
Like I said, follow Eric on his podcast there.
00:52:18.239 --> 00:52:19.519
Um get his book.
00:52:19.679 --> 00:52:20.960
All that stuff is free.
00:52:21.199 --> 00:52:22.000
Great stuff.
00:52:22.159 --> 00:52:31.440
Uh, you don't have to work with Eric, but I highly encourage you to take a look at them because they've they've helped us tremendously in our business and in our household, too.
00:52:31.599 --> 00:52:37.039
So super um, super powerful group there to get to know and definitely have some awesome training.
00:52:37.119 --> 00:52:38.880
So thanks, Eric, for being on the podcast.
00:52:39.039 --> 00:52:39.920
Much appreciated.
00:52:40.159 --> 00:52:40.880
Thanks, buddy.
00:52:41.119 --> 00:52:45.119
Always great to have you on here and get your advice uh to our audience out there.
00:52:45.199 --> 00:52:47.039
I hope you got a lot out of today's podcast.
00:52:47.119 --> 00:52:54.320
Don't forget to like and subscribe to our podcast, as well as our YouTube channel where you get all these videos of our podcasts as well as free advice.
00:52:54.400 --> 00:52:59.679
And of course, on practicepromotions.net, we get tons of free marketing advice for your practice.
00:52:59.760 --> 00:53:05.199
So, this is Neil Trigott from the Practice Marketing Podcast, wishing you much success in your practice.
00:53:09.840 --> 00:53:15.840
A free way for you to support our show is by leaving a five-star rating and review on Apple Podcasts.
00:53:16.000 --> 00:53:21.199
It's a chance for you to tell us what you love about the show, and it helps others discover it as well.
00:53:21.360 --> 00:53:25.519
Just scroll down to ratings and review on your phone and click write a review.
00:53:25.760 --> 00:53:26.559
Thanks.