Full Transcript for A Simple System For A Consistent Owner Paycheck

bit. 00:02:57.420 --> 00:02:58.780 Uh, or you know, how about this? 00:02:58.860 --> 00:02:59.340 How about this? 00:02:59.580 --> 00:03:03.980 If you need money to cover an expense, then just let us know and we will do that. 00:03:04.140 --> 00:03:05.659 And we'll just go ahead and flip the bill. 00:03:05.740 --> 00:03:12.219 And so, whenever your rent is due, utilities, whatever, just let us know and we'll we'll put enough in your bank account to cover that expense. 00:03:12.540 --> 00:03:13.980 Would you take that job? 00:03:14.140 --> 00:03:15.420 Would you accept it? 00:03:15.740 --> 00:03:17.260 I definitely would not. 00:03:17.420 --> 00:03:27.340 And if the inverse were true, if I was interviewing a CEO for my company and they were like, you don't need to give me a salary, I'll just pull money out of the business whenever I need money to cover my bills. 00:03:27.900 --> 00:03:29.340 I'm not hiring them. 00:03:29.659 --> 00:03:34.300 But here's the problem is that's exactly what we've done to ourselves. 00:03:34.540 --> 00:03:36.620 Most of us have done to ourselves and our business. 00:03:36.860 --> 00:03:54.860 In fact, we have a quiz on our website that over the years has been collecting responses, and we looked through the data just recently, and what we found was uh out of about 491 responses, 56% of people said that their biggest concern was that they want to take home more money more consistently. 00:03:55.020 --> 00:03:57.100 That is the biggest concern, is their paycheck. 00:03:57.180 --> 00:04:00.540 Their number one desire is to get on a consistent pay rhythm. 00:04:00.780 --> 00:04:03.820 So then why is it that we aren't doing that to ourselves? 00:04:04.060 --> 00:04:06.300 We would demand it from someone else. 00:04:06.620 --> 00:04:11.980 So we need to give ourselves the same respect that we would demand from someone else. 00:04:12.140 --> 00:04:23.339 And that means as the business owner, you deserve to be paid the same amount on the same pay rhythm, just like you would expect from someone else. 00:04:23.500 --> 00:04:28.860 You would expect to know when payday is, and you would expect to know roughly what your paycheck is going to be. 00:04:29.019 --> 00:04:30.459 And that's what we're gonna resolve for you. 00:04:30.540 --> 00:04:35.339 So if you're not at that place, then today we're gonna work through how to get there. 00:04:35.579 --> 00:04:42.620 Maybe you are paying yourself consistently, but you just feel like it's not anywhere near what you deserve, or maybe it's not even enough to cover your personal expenses. 00:04:42.860 --> 00:04:44.459 We're gonna work through that today, too. 00:04:44.620 --> 00:04:54.459 And if you are just super happy with where your paycheck is, I say still listen because there's opportunity maybe to be taking home more, because I don't think you should just be getting by or or surviving. 00:04:54.620 --> 00:04:56.779 We want you to be thriving in your personal life too. 00:04:57.019 --> 00:05:02.779 So the biggest mistake we find before I dig into I got four steps on what we're gonna how to walk through this. 00:05:02.860 --> 00:05:07.099 The the biggest mistake that we find is people fall in one of three categories. 00:05:07.339 --> 00:05:13.579 The first one is that paycheck to skip paycheck, you are paid pretty consistently. 00:05:13.659 --> 00:05:23.740 You you you're paid on the same payday as your team is, but when finances are tight, when the bank account is low, you just skip your paycheck, right? 00:05:23.899 --> 00:05:25.579 It's I'm gonna pay run payroll. 00:05:25.659 --> 00:05:28.459 Uh, we got an invoice due next week, or I need to pay off the credit card. 00:05:28.539 --> 00:05:30.139 So uh makes me a little anxious. 00:05:30.219 --> 00:05:31.899 So I'm just gonna go ahead and just skip my paycheck. 00:05:31.979 --> 00:05:33.579 We'll be fine on the personal side. 00:05:33.819 --> 00:05:37.500 So that's the first mistake we see is that we sacrifice our own paycheck. 00:05:37.579 --> 00:05:38.779 It's the first one to go. 00:05:39.019 --> 00:05:39.899 This is a problem. 00:05:39.979 --> 00:05:43.259 Again, you would not let somebody else skip your paycheck if you worked for them. 00:05:43.419 --> 00:05:47.259 You're working in the business, you're busting your butt, getting everything done. 00:05:47.500 --> 00:05:51.659 You deserve to be paid every time and consistently. 00:05:51.819 --> 00:05:53.099 So that's number one. 00:05:53.180 --> 00:05:56.699 The second mistake is that the paycheck depends on the bank balance, right? 00:05:56.859 --> 00:05:58.459 It's how much money do we have in the bank? 00:05:58.539 --> 00:06:00.299 If we have a lot, I'm gonna take a lot. 00:06:00.379 --> 00:06:00.779 Awesome. 00:06:00.859 --> 00:06:01.899 We had a great, great month. 00:06:01.979 --> 00:06:03.099 I'm gonna take extra money. 00:06:03.259 --> 00:06:06.459 And if it's down, if cash is low, then we're gonna take less. 00:06:06.539 --> 00:06:09.339 We're gonna take a little bit, if if anything. 00:06:09.659 --> 00:06:13.019 This rise and fall is truly the feast or famine cycle. 00:06:13.099 --> 00:06:13.819 It's the cause of it. 00:06:13.899 --> 00:06:15.500 It's when money's good, we take. 00:06:15.659 --> 00:06:17.099 When money's bad, we stress. 00:06:17.259 --> 00:06:18.459 So we want to move away from that. 00:06:18.539 --> 00:06:21.180 And then the third one is what I like to call the sticky bandits. 00:06:21.259 --> 00:06:29.099 This is if you've seen Home Alone 2, uh Harry and Marv are the the crooks of the robbers who are always chasing after Macaulay Culkin. 00:06:29.579 --> 00:06:41.500 But in the movie, he wraps uh Marv wraps his hand in duct tape, and as they're walking down the street, he sticks it into the collection bucket and pulls it out, and you know, all the money is stuck to his hand and he takes it and puts it in his pocket. 00:06:41.899 --> 00:06:49.899 How this relates to business is what I find, and

if you can relate to this, you just know you're not alone because it is incredibly common. 00:06:50.139 --> 00:06:53.579 It's when we need money, we just take it from the business. 00:06:53.819 --> 00:07:00.060 If our electric bill was higher than we thought it was going to be, we just pull a couple hundred out of the business. 00:07:00.219 --> 00:07:05.419 If we have to call a plumber to fix plumbing, we just pull a little extra cash out of the business. 00:07:05.659 --> 00:07:17.979 And so instead of having a regular paycheck, it's if I were to look at your business account, there's multiple small withdrawals or transfers to your personal account to cover expenses as they pop up. 00:07:18.219 --> 00:07:21.659 You're sticking your hand in the business and you're pulling money out on a regular basis. 00:07:21.819 --> 00:07:23.899 We want to move away from all of these things. 00:07:24.060 --> 00:07:28.139 Like I said, you deserve to be paid regularly and consistently. 00:07:28.299 --> 00:07:30.939 The first step is, and so let's let's go through the four steps. 00:07:31.019 --> 00:07:34.620 Number one is to get clear on your personal finances. 00:07:35.180 --> 00:07:43.579 Personal finances and business finances are so deeply connected that we need to know what it is you need on the personal side to cover your bills. 00:07:43.740 --> 00:07:50.620 So if you don't have a personal budget yet, I recommend sitting down and doing a personal finance snapshot, is what we call it. 00:07:50.779 --> 00:07:53.099 Uh, we have a spreadsheet uh on our website. 00:07:53.180 --> 00:07:56.779 I'll link it in the show notes below so that you can use it. 00:07:56.859 --> 00:08:01.740 It's gonna have a bunch of different categories that you can fill in and give you an idea of all your expenses. 00:08:01.899 --> 00:08:04.779 But really, the idea is we're gonna enter your income. 00:08:04.859 --> 00:08:06.379 What is your household income? 00:08:06.459 --> 00:08:13.659 That's including your spouse, that's including any other jobs you might have, any other income sources, and then of course what you're paying yourself from your business. 00:08:13.819 --> 00:08:15.579 We're gonna put that at the top. 00:08:15.979 --> 00:08:31.099 Then we're gonna write down everything we spend money on, whether it's your bills, your rent, your mortgage, whether it's the fun stuff, it's restaurants, it's groceries, it's entertainment, it's kids' sports, it's subscriptions, you name it, we're gonna put it down. 00:08:31.339 --> 00:08:40.620 It might help to get a bank statement and kind of roll through that or a credit card statement and look through to see what are we actually spending money on, where does it all go, and put these numbers down. 00:08:40.779 --> 00:08:45.340 How much does it cost to run our house on a monthly basis? 00:08:45.580 --> 00:08:56.779 Then at the bottom, what you're gonna find is are you does it cost more to run your house than what you're actually bringing in,

or are you bringing in enough to cover the cost of what it takes? 00:08:57.100 --> 00:08:58.860 This is gonna be pretty eye-opening. 00:08:58.940 --> 00:09:01.100 Now, if you are bringing in enough, great. 00:09:01.259 --> 00:09:07.740 If you have extra down at the bottom, you can funnel that towards your debt, you can funnel it towards savings, you can funnel it towards whatever you're working on. 00:09:08.060 --> 00:09:13.980 If it's a negative number, if you're spending more than you're bringing in, then obviously something needs to change. 00:09:14.220 --> 00:09:22.299 Whether that is going through and reducing your spending or telling yourself, okay, this is what my my business, my practice needs to be paying me now. 00:09:22.539 --> 00:09:24.860 Is uh we're in the red$1,000. 00:09:25.179 --> 00:09:31.179 So I need to start paying myself$1,000 more a month to just make sure we balance this whole budget out. 00:09:31.500 --> 00:09:34.539 So getting clear on this is vital. 00:09:34.860 --> 00:09:36.299 Like I said, they're deeply connected. 00:09:36.460 --> 00:09:43.579 When the personal finances are a mess, the business suffers because we're we're draining cash from it to plug holes on the personal side. 00:09:43.819 --> 00:09:51.340 And then when the business struggles, the personal finances suffer because we're not able to pay ourselves enough to live our lifestyle. 00:09:51.419 --> 00:09:58.939 And so we start racking up debt, uh, or we have to sacrifice things we really want or or enjoy to just make ends meet. 00:09:59.179 --> 00:10:01.419 Getting clear on this personal finance number is important. 00:10:01.500 --> 00:10:03.019 So again, I have a spreadsheet you can use. 00:10:03.100 --> 00:10:04.299 You can use budgeting softwares. 00:10:04.379 --> 00:10:09.340 There's like monarch money, there's every dollar, there's you need a budget, uh, there's a ton of options out there. 00:10:09.579 --> 00:10:13.819 Whatever fits the best for you, it could literally be a sheet of notebook paper. 00:10:13.899 --> 00:10:17.980 It doesn't have to be fancy, but getting clear on your personal finances. 00:10:18.220 --> 00:10:20.220 Then step two is to work backward. 00:10:20.379 --> 00:10:26.059 It's here's how much we need the practice to pay me in order to live. 00:10:26.699 --> 00:10:39.100 So if I need$100,000 and we're a million-dollar business, well, then that means 10% of the revenue we bring in needs to go to me as the business owner. 00:10:39.259 --> 00:10:40.539 That's how we're gonna work backward. 00:10:40.620 --> 00:10:41.500 We're gonna start with you. 00:10:41.659 --> 00:10:42.620 What do you need? 00:10:42.860 --> 00:10:43.819 $100,000. 00:10:43.899 --> 00:10:49.500 We divide it by whatever your annual revenue is, and that's gonna give you a percentage after you multiply it by 100. 00:10:49.819 --> 00:10:51.419 That's gonna give you a percentage. 00:10:51.659 --> 00:10:55.259 So whatever that number is, find that percentage. 00:10:55.340

--> 00:10:57.419 And that means open a bank account. 00:10:57.500 --> 00:11:00.220 If you don't already have a bank account, nickname it owners pay. 00:11:00.299 --> 00:11:07.579 And every time money gets deposited into your bank, you transfer that 10% or whatever your percentage is into that bank account. 00:11:07.740 --> 00:11:12.379 Money is intentionally being set aside for you to make sure you are paying yourself. 00:11:12.699 --> 00:11:13.819 That is key. 00:11:13.980 --> 00:11:19.740 So working backwards, figuring out that number, that percentage, and then intentionally setting that money aside. 00:11:23.019 --> 00:11:32.779 If you're a therapist or a practice owner, you probably didn't get into this work because you just love thinking about SEO, Google ads, website conversion rates, or digital marketing. 00:11:33.019 --> 00:11:37.579 And chances are no one taught you how to market your private practice in grad school either. 00:11:37.740 --> 00:11:40.379 That's where Rex Marketing and CX comes in. 00:11:40.620 --> 00:11:47.179 Rex is a marketing agency that specializes in helping therapists, mental health practices, and healthcare organizations grow. 00:11:47.340 --> 00:12:00.139 They help with everything from SEO, Google Ads, website design, content marketing, and growth strategy so that you can spend less time trying to figure out this marketing thing and more time focused on your practice and your clients. 00:12:00.299 --> 00:12:06.939 And because they work extensively in mental health care, they understand the unique challenges that come with marketing a therapy practice. 00:12:07.179 --> 00:12:16.699 If you're ready to get more of the right people finding your practice, visit rexmarketingandc.com to learn more and schedule a free consultation. 00:12:16.779 --> 00:12:21.259 That's rexrexmarketingandc.com. 00:12:21.419 --> 00:12:27.259 My listeners also receive a 10% discount on their first month, so reach out to them today and learn more. 00:12:30.460 --> 00:12:32.539 Then step three is to create a pay rhythm. 00:12:32.699 --> 00:12:35.899 So making sure you're paid the same amount on a regular basis. 00:12:36.059 --> 00:12:45.819 If you're putting 10% into that bank account, that just means, as we as we know, if you're a million-dollar business, that doesn't mean you make$83,333 every single month of the year, right? 00:12:46.059 --> 00:12:47.899 It's you have rise and fall. 00:12:48.059 --> 00:12:52.379 You're gonna have some months where you're you bring in 50 and you have some months where you bring in 100. 00:12:52.539 --> 00:12:53.980 So there's that up and down. 00:12:54.220 --> 00:13:01.419 By putting 10% in the bank account, that means every single month, some months you'll put more in, some months you'll put less. 00:13:01.740 --> 00:13:09.659 But by saying I'm taking a consistent paycheck, I'm not gonna take every single dollar I put into that account every month because that's again, that's that feast or famine. 00:13:09.819 --> 00:13:11.419 If there's a lot of money in there, I take a lot. 00:13:11.500 --> 00:13:13.179 And if there's not much, I take less. 00:13:13.340 --> 00:13:17.819 It's I need$100,000, that's$8,333 a month. 00:13:18.059 --> 00:13:24.139 So once a month, I whatever's in there, I take$800,$8,333. 00:13:24.779 --> 00:13:32.299 If there's$10,000 in there, then that means I'm just leaving the leftover in there for next month because maybe there we don't bring in enough to cover it. 00:13:32.379 --> 00:13:37.980 So it kind of you build that cash cushion to use the good months to fund the down months. 00:13:38.139 --> 00:13:41.179 That way we're not riding that roller coaster with our own paycheck. 00:13:41.259 --> 00:13:42.620 We want to move away from that. 00:13:42.860 --> 00:13:48.939 And then step four is this is just a recommendation on the personal budget, and it's to create two different budgets. 00:13:49.179 --> 00:13:50.379 And I guess really it's three. 00:13:50.460 --> 00:13:53.419 You have your regular one right now, and we're gonna create two more. 00:13:53.500 --> 00:13:56.059 And one of them is called the Thrive budget. 00:13:56.379 --> 00:13:58.539 This is what is your ideal lifestyle? 00:13:58.779 --> 00:14:01.179 Are you currently living your ideal lifestyle? 00:14:01.259 --> 00:14:09.659 And this is just you and if you're married, your spouse sitting down and saying, What are things we wish we could do more of if we had more money? 00:14:09.980 --> 00:14:11.100 Is that travel? 00:14:11.340 --> 00:14:21.740 Is it being able to go out to nicer restaurants or uh be able to buy healthier foods or the more expensive organic foods, whatever it is? 00:14:21.980 --> 00:14:22.939 What would we like to do? 00:14:23.100 --> 00:14:27.819 Are there kids' sports or activities that we've had to say no to in the past that we would love for them to be able to do? 00:14:27.899 --> 00:14:31.259 Uh we wish we could enroll them in private school instead of public school. 00:14:31.500 --> 00:14:35.100 Go through all of these things and create what we call a thrive budget. 00:14:35.259 --> 00:14:42.220 And that is adding these things in and figuring out what do I need to make in order to make this a reality? 00:14:42.460 --> 00:14:45.659 Because I think everybody should be thriving, not just getting by. 00:14:46.299 --> 00:14:55.340 Then you can reverse engineer it again, take whatever that number is, divide it and say, what does the business need to, what percentage would it need to pay me in order to make that a reality? 00:14:55.579 --> 00:14:58.539 If the business can afford to do it now, awesome. 00:14:58.779 --> 00:14:59.659 Jump to it. 00:14:59.740 --> 00:15:01.579 Uh if not, then that's okay. 00:15:01.740 --> 00:15:10.620 What you'll find is you can figure out, okay, as the revenue increases, then that percentage will get smaller, and then you'll get to a point where you can afford to do it. 00:15:10.860 --> 00:15:14.860 But getting

clear on what do I need to make it kind of gives you that goal line. 00:15:15.100 --> 00:15:18.299 Then the other budget I want you to make is what we call a survive budget. 00:15:18.379 --> 00:15:20.059 It's the other end of the spectrum. 00:15:20.460 --> 00:15:25.740 How much does it cost to keep our house afloat if emergency struck? 00:15:26.059 --> 00:15:32.059 And the way I like to think of it is if if all income sources stopped, how long could you make it? 00:15:32.220 --> 00:15:35.340 How much would it cost uh to get through? 00:15:35.500 --> 00:15:40.299 And what I mean by that is if all income sources stopped, that means all extra spending stops. 00:15:40.460 --> 00:15:45.899 So creating a survive budget really is um figuring out how much does it cost to survive. 00:15:46.059 --> 00:15:55.579 This is to keep a roof over our heads, to keep some kind of food on the table, and to make sure that we can get to and from work, right? 00:15:56.139 --> 00:15:57.980 Just the bare, bare essentials. 00:15:58.139 --> 00:16:14.299 We're getting rid of restaurants, we're getting rid of the extracurricular stuff, all the excess stuff, and it's just what does it cost for us to get by so that you don't go into foreclosure on your home because you didn't want to give up soccer for your for your nine-year-old, right? 00:16:14.539 --> 00:16:16.539 So what does that cost? 00:16:16.699 --> 00:16:28.460 Um, and that's gonna give you an idea of if everything gets terrible or something happens and on one end or the other, you have an idea of what needs what it costs to keep you afloat. 00:16:28.939 --> 00:16:31.419 You can also take this number and work backwards. 00:16:31.500 --> 00:16:36.620 And if your business can't afford to pay even the survive budget, then then something needs to change. 00:16:36.699 --> 00:16:39.259 And so you either need to cut your expenses. 00:16:39.340 --> 00:16:54.299 Uh uh, well, um let me start with the per since I'm saying survive, there's not really a whole lot of uh sort of expenses you can cut out of the personal side, but on the business side, you can cut some expenses so that you can allocate more percentage points to the personal finance side. 00:16:54.460 --> 00:16:59.179 Uh, if it can't afford the survive one, you you you're gonna have to supplement the income somehow. 00:16:59.340 --> 00:17:09.259 Um, and so that might mean getting a second job, that might mean uh doing some contract uh therapy for somebody else on the side while you're running your business. 00:17:09.420 --> 00:17:19.019 Um, there's a lot of different ways to approach it, but you might need to find side income sources so that you can bridge that gap by doing that on the personal side. 00:17:19.180 --> 00:17:27.180 Then your personal life is less dependent on the practice for now until it can get to that number, the where you need it to be. 00:17:27.420 --> 00:17:29.660 Okay, so supplementing the difference. 00:17:29.900 --> 00:17:40.380 And then on your

main budget, the original one you wrote of what your life looks like now, if the business cannot afford to pay that, then you might need to go in and cut back on your personal spending. 00:17:40.460 --> 00:17:42.059 Because that means your business can't afford you right now. 00:17:42.220 --> 00:17:50.779 And that could be where all this financial stress and strain is coming from, is you've been paying yourself something your business can't sustain. 00:17:51.019 --> 00:17:56.460 And so we need to go through the personal expenses and reduce, find things that we can cut back on, reduce. 00:17:56.619 --> 00:17:58.139 Uh, same with the business. 00:17:58.220 --> 00:18:10.539 Like I said, you can go through there, find expenses that maybe you could cut back and reduce, and really work on bringing bridging that gap so that by reducing our expenses, that means we can allocate a little bit more to our paycheck. 00:18:10.619 --> 00:18:14.220 And by reducing our paycheck, that means we need less from the business. 00:18:14.539 --> 00:18:19.980 Regardless, uh, wherever you are, I recommend you start paying yourself something on a regular basis. 00:18:20.220 --> 00:18:24.779 So that just means even if it's 200 bucks every week, then do that now. 00:18:24.859 --> 00:18:26.539 And we're gonna work on increasing that. 00:18:26.619 --> 00:18:33.019 But get yourself to a place because if you're like my bank account is literally$10 in it, you're like, I can't pay myself a paycheck this week. 00:18:33.180 --> 00:18:34.379 Start paying yourself something. 00:18:34.460 --> 00:18:42.700 Get in the habit of paying yourself regularly on a regular basis, and then work toward that number that you need to pay yourself. 00:18:43.180 --> 00:18:45.660 This is how it works bridging that gap. 00:18:45.819 --> 00:18:51.740 We got to start on the personal side first, work backward, figure out what the business needs and can do to pay you. 00:18:51.900 --> 00:18:57.019 If you need any help with this, number one, I like said there's a spreadsheet I'll put in the show notes below that you can use. 00:18:57.660 --> 00:19:09.259 If this has been a pain point, like the 56% of business owners that we we got responses from on our quiz on our website, that you're not paying yourself regularly or consistently. 00:19:09.420 --> 00:19:10.700 That is what we solve. 00:19:10.779 --> 00:19:11.980 That's that's our bread and butter. 00:19:12.139 --> 00:19:13.740 That's we eat that stuff for breakfast. 00:19:13.900 --> 00:19:30.220 So if you need help with that, I will also always, there's a link to a to schedule a consultation with our team, meet with one of our coaches, uh, they'll get to know you, get to hear a little bit more about what's going on, and then share how our coaching program can help you, uh, which I know it can. 00:19:30.299 --> 00:19:31.259 That this is what we do. 00:19:31.339 --> 00:19:43.339 We help practices just like yours pay themselves what they deserve on a regular basis and create a practice that can afford to hire and scale and grow, but not at the sacrifice of you, the business owner. 00:19:43.500 --> 00:19:45.259 So schedule a link, get some help. 00:19:45.420 --> 00:19:50.460 Otherwise, you can tackle that spreadsheet on your own and good luck figuring it out, working backwards. 00:19:50.619 --> 00:19:52.779 Let me know how it goes, shoot me an email. 00:19:52.859 --> 00:19:55.660 Uh, I would love to hear how your numbers turn out. 00:19:56.299 --> 00:19:59.099 Thanks for joining us on the Therapy Business Podcast. 00:19:59.339 --> 00:20:04.139 Be sure to subscribe, leave a review, and share it with a practice owner that you may know. 00:20:04.379 --> 00:20:12.859 If your practice needs help getting organized with finances, or just growing your practice, head to therapybusinesspod.com to learn how we can help.