Chiropractic Practice Rescue, Volume 3: Fixing Your Finances

Chiropractic Practice Rescue, Volume 3: Fixing Your Finances

*The following is an actual transcript for Chiropractic Practice Rescue, Volume 3: Fixing Your Finances. We do our best to make sure the transcript is as accurate as possible, however, it may contain spelling or grammatical errors.*

Chiropractic Practice Rescue, Volume 3: Fixing Your Finances

Hello everybody. And welcome to Thrive in Five I’m Dr. Dennis Perman, and I’ll be your chiropractic coach for today. The content of this Thrive in Five is practice rescue volume three, fixing your finances. Now, as you probably already know, I spend a good chunk of every day talking to doctors on the phone and a very common challenge that many doctors are having is finding a way to be profitable. Now, chiropractic is the greatest business in the world, but it is a business and we have to treat it like a business. So it’s very important that you understand that the foundations of business principles, the sound business principles that make any business thrive are gonna be just as important in a chiropractic practice. So there are a couple of basic concepts that we’re gonna be covering here today. And in fact, it wouldn’t shock me if over the next several thrive and fives, we went to practice rescue volume three, a three B three C, et cetera, because fixing your finances is a tall order, but there are some very basic ideas that if you have these in place, it’ll be easy enough for you to get yourself back on course.

So let’s begin first. You must make more than you spend. Now, this sounds very obvious, but you have no idea how often doctors forget about this really important basic concept. You have an overhead, your overhead is the technical business term for what it costs you to run. That would be your rent or your mortgage, your salaries, your office supplies, your equipment. Somebody’s gotta pay for that. And guess what tag your it. So you wanna make sure that you understand what your overhead is because your overhead is going to tell you a lot about the way you have to run the business of your practice. It’s gonna tell you how profitable you already are. It’s going to tell you what fee you need to charge. It’s going to tell you what you may need to underemphasize or reemphasize in order to have the practice be what you want it to be. So it’s really important that you understand your overhead. The first order of business is going to be for you to write down everything. It costs you to run everything. It costs you to operate your practice because this number is gonna turn out to be a foundational number for us to recognize what it’s gonna take for you to be truly profitable and make the money you want. Now you can

Consider your overhead in a variety of different ways. You can consider it by the month and that’s the way most people do it. The problem is it’s a very unwieldy number when you’re thinking in terms of 12,000 or 15,000 or 30,000 or whatever it costs you to run. It’s kind of an unreal number, cuz it’s so large. It may make more sense to you to boil down your overhead in terms of what it costs you to run per week or what it costs you to run per day. Or if you’re, if you’re willing to try it, what it costs you to run per hour. Now, why is this important? Because we understand what it takes for us to have a profitable hour, but we don’t understand what profit means. If we don’t know what our overhead is. So let’s say for the sake of argument that you work 30 hours a week and you work four weeks, each month, that’s 120 hours.

And let’s just say for the sake of argument, it costs you $12,000 to run. That means it costs you a hundred dollars an hour for you to operate your practice. Now, a hundred dollars an hour. It sounds like a lot of money in a wheelbarrow, I guess it is. But remember in that hour you could see one office visit or you could see two office visits or three or four office visits or six or eight office visits or 10 or 12 office visits. It’s up to you. But watch, if you see somebody every 15 minutes, a very leisurely paced in my book, but many doc, many doctors do it and you charge $50 for a visit. If you see four visits per hour, then for those hours that are filled with four visits, you make 200. If it costs you 100, then you’ve made a hundred dollars for the hour.

But watch the expenses of the hour remain the same. If instead of seeing four people an hour, you see six. Now you make 300 at the same averages of $50 a visit. And instead you’re making $200 an hour. Could you dare? I say it. Could you see eight people in an hour, two, every 15 minutes, many doctors do. And then some in that case, you’re making $400 an hour spending 100. So now your profit is $300 an hour. Now why is this important? Because in order for you to understand your own profitability, you have to realize the relationship between your overhead and your profit. So for this very first, this very first effort on talking about how to fix the finances of your practice. The first order of business is gonna be for you to figure out what your overhead is, figure out what you’re making per hour. See how many people you can see in an hour, multiply that by your office visit fee. And that tells you what your hourly profitability will be. If this is a very satisfying number, great, let’s fill your practice. If it’s not we’ll, then something has to give.

And that’s the purpose of these Thrive in Fives. Practice rescue is about understanding where your practice needs to be rescued. For those of you who have issues with your finances, this is an important first step for you to take. Now in understanding your finances, you may want to use the practice growth calculator. The practice growth calculator is a tool that we developed that you can get to simply by running your scanner or your, your phone camera over that QR code in the corner there. And it will tell you what your current statistics are after you feed in a couple of very simple numbers. The reason this is so valuable is because it gives you the insight that we just spoke about, about how many people can you see in an hour and how much money can you make in an hour. When you bounce that off your overhead, you’re taking a bold stride in the direction of being a competent chiropractic entrepreneur in future in future thrive and fives. We’re gonna be talking about stuff like this more, but for now I hope you’re able to use this information on overhead and profitability to your advantage, to help more people and to make more money. This is Dr. Dennis Perman from The Masters Circle Global signing off for Thrive in Five.

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