ABOUT THIS EPISODE
As a practice owner, it's possible to manipulate your financials in ways that make the business appear healthier than it really is, often without realizing you're doing it. On this episode, my co-host, Dr. Chad Fleming, and I discuss how decisions like paying yourself an artificially low salary or charging the practice below-market rent can inflate your reported profitability and create a false sense of financial happiness.
We also discuss why practice owners need to normalize their financials, use consistent definitions when talking about profit margins, and understand the difference between profitability and cash flow. If the numbers don't reflect the true cost of operating the practice, you may be making decisions about equipment, hiring, debt, or expansion based on a financial reality that doesn't actually exist.
Our next best step for you is to review your practice financials and ask whether they reflect fair owner compensation, realistic operating expenses, and the true financial health of the business. If you aren't confident in the answer, surround yourself with professionals who can help you establish accurate numbers before making your next major decision.
Have a question for us to address in a future episode? Submit it here!
Resources:
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Simple Numbers, Straight Talk, Big Profits! by Greg Crabtree
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Learn more about Partners in Profit
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Check out Adam's new book: How to Buy an Optometry Practice
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