Meet Carla Titus

[00:00:00] Carla: As a business owner, there are things we do because we need to have a viable long-term business that we think about strategically managing to performance goals. And then we have a business where we also can, you know, take care of our people and afford to do so because now we have the profit to do it.

[00:00:30] Linzy: Welcome to the Money Skills for Therapists podcast, where we answer this question: how can therapists and health practitioners go from money shame and confusion to feeling calm and confident about their finances and get money working for them in both their private practice and their lives? I’m your host, Linzy Bonham, therapist turned money coach, and creator of the course Money Skills for Therapists. 

[00:00:50] Hello and welcome back to the podcast. Today’s guest is Carla Titus. Carla is from Wealth and Worth Within. She is a fractional CFO, so she brings her chief financial officer knowledge and skills to folks in the health field, including group practice owners. And today, Carla and I dig into the financial complexities of group practice.

[00:01:16] Questions like how you compensate your team well, while also being profitable. How do you get your team on board with being responsible for the results of the business while also making sure that they are feeling taken care of and equipped, you know, to help with the project of making the business work? You can feel Carla’s financial background and expertise coming through in this conversation. And even if you’re not a group practice owner, I would encourage you to check out this episode to get an understanding of the different things that we need to be thinking about in terms of having a financially sustainable and healthy business. And one of those things that Carla talks about in this episode quite a bit is margins.

[00:01:56] She uses the term margins, referring to profit margins, like what is the extra money that’s there? And I know as therapists, that’s something that sometimes we shy away from, we don’t want to think about, especially when it comes to group practice. I see group practice owners… you don’t want to think that you’re profiting from others.

[00:02:11] And so I do want to remind everyone who’s listening that the profit in a business, like that extra, that is the oxygen, that is the stability. Carla and I talked today about the change in healthcare cyber-attacks a little bit, and what happens when money stops coming into a business. And you’re a group practice owner who has a bunch of folks to pay, the reality of that kind of financial disaster really, and it is by having extra money in the business that you actually can build a buffer to ride out those kinds of times, right?

[00:02:42] To make sure that everybody’s okay, even when things don’t go as planned. So, there’s lots of discussion on how to make numbers work. We talk about if you realize that your numbers aren’t working in your practice, where do you start? How do you start to create some of that profitability? So, you have that oxygen.

[00:02:59] In your business. Here’s my conversation with Carla Titus. 

[00:03:18] Linzy: So Carla, welcome to the podcast.

[00:03:20] Carla: Thanks so much for having me. So excited for our conversation today. We’re going to hit some big topics.

[00:03:26] Linzy: Yes, we are. I’m excited to have you as well because I think that you and I support, I think, the same kinds of humans. I’m getting that impression as we’ve been chatting off-mic. But you are coming to it from a bit of a different grounding than I am. So, I’m super excited to hear. How you work with group practice owners.

[00:03:44] So I will say for folks who are listening, we are going to be digging into group practice today, but I think all the same principles that make a group practice healthy and successful also apply to solo practice. So solo practitioners do know there’s going to be a lot here in this conversation for you as well because good financial strategy and balance apply in all situations.

[00:04:03] But yeah, I want to start with this piece, Carla. So. I was just saying to you off mic that I teach a course as well for group practice owners and the people that I like to attract to my course are the people who really, really care about other humans and probably what is not working for them is they’re giving so much to their team that the business is not working.

[00:04:24] Right? I want to work with those folks who tend to be too nice to other people, not not nice enough. And then we start from there. And then we look at getting them into a more sustainable place. So, I’m curious, from your perspective, how can practice owners navigate that emotional piece of being competitive, giving people what they need and what they want, and giving their team the benefits that they want to give them, but also making sure that they’re not doing that at their own financial expense.

[00:04:55] Carla: Yeah, it’s such a great question because what I see often is this business owners who are therapists. You folks are just so compassionate and giving and generous to your team. And that’s where I sometimes have a problem with it because I think as a business owner, you are taking the risk. You could be working a day job and making a lot of money and creating a lot of wealth for yourself and your family.

[00:05:18] But you’re giving that up because you’re trying to accommodate everyone in your team, which is such a noble thing to do, but it will get you out of business really quickly because you will be resentful. You will be. Like this is just not worth it and why am I working so hard for everyone else to get paid, that’s where we lose that momentum you had around helping more people than just you could yourself alone because you decided to bring in other clinicians to create a group practice so you could help more people have a bigger impact.

[00:05:47] That doesn’t happen if you don’t have the money to do it. And so, where we want to refocus our conversation and intention is if we were for a second, just to remove the names of the people we have in the compensation strategy we’re trying to create. Okay. And this is a really easy exercise you can do because it helps you remove the emotion, and it gets you to an objective place first.

[00:06:11] Then we take into consideration the people, the emotions, and all the things that go with setting a compensation structure that works for both the business and the individuals working in the practice. And what I say is changing the compensation model is not an easy thing. First, we do not encourage you to just suddenly say, here’s a new way, and good luck, because you will probably lose everybody.

[00:06:32] So we don’t encourage that, but we encourage you to go through that exercise and I start to understand what a competitive rate for that type of position in my area is. Because you might find you’re overpaying some people. You might find that maybe the roles and responsibilities are larger than the compensation you’re giving them.

[00:06:50] So you might be in the opposite way, which then is a different problem to solve. And we will talk about profitability as well. But you need to start to go through that exercise without the people’s names because then you’re trying to accommodate well, I like this person that they’re good at their job.

[00:07:06] They’re an over-performer. And then you’re trying to add more money to it. But maybe money is not what they’re looking for. And this is another piece of it is maybe time off that they want. Maybe it’s setting their schedule. Maybe it’s deciding how many clinical hours they want to have, and then we set a compensation that aligns with those needs for the practice, with an affordability target in mind, which is why we care about margins and start to talk about more in-depth on that, you know, what is the calculation after they generate revenue, and you pay for them, and their total compensation costs?

[00:07:41] What is left behind? And that is your margin. Managing for that going forward is going to set you up on a path of sustainable success, long-term, where you do have enough profit, not only to pay yourself but also put profit left behind to potentially bonus some of the people in your team to maybe you do something meaningful. 

[00:07:59] For them in the way that they find, you know, it’s meaningful. And then also have profit left behind to grow the business to continue to support the business needs and have the cash flow necessary to be in business long term. So, this kind of all comes together in this way, which is why it’s so complicated, and why it’s so emotionally charged.

[00:08:18] Linzy: yeah. So, taking the names out of it… Because I see this with group practice owners, especially when you’re earlier in practice and you have your original people. And often when we’re in group practice, too, like some of the first people we have, it’s like, it’s our friend that we worked with in community mental health, and they came to work for us, and it’s our friend that we did our master’s with.

[00:08:33] And so sometimes there’s also other kind of dual relationships happening here, where it’s not just your first employee, but you also have some sort of other relationship with them. So, it’s very hard to think about their position. Instead, you’re thinking about, like, Jessica, or you’re thinking about, like, LaShawn.

[00:08:46] You’re not thinking about this is my full-time therapist position, and this is my part-time therapist position. So, I’m hearing that kind of personal piece out of it, and think about it as a position, because then you can start to compare it to what else is out there. And see are you offering more or maybe less than the other choices that they would have,

[00:09:03] Their other options are out there.

[00:09:06] Carla: Yeah. And the other element to this is, can you afford to pay at that rate? And that’s the thing that we have to come to, you know, consensus on as a practice owner, like, can we afford these roles? And if not, what can we afford? Answering that question, it’s hard because you might still want to keep all these people you started with but

[00:09:25] You might not be able to afford to go forward if the revenue they’re bringing in is not superseding their costs, right?

[00:09:31] And it’s, it’s hard to go there because you’re like, well, but I like them. I want to keep them. But then it’s a conversation. It’s a, hey, for us to compensate you and give you a raise, we need to see this kind of metrics come through for you. And then you agree that that is the right metric for them, that it’s working for them as well, and that they will

[00:09:52] do everything they can to meet those metrics. And then you work on progress together, and then you coach them, and then you get them to a point where everybody’s happy. They’re getting compensated for what they want and need, and you are getting the performance you need out of them to be able to stay in business long-term and continue to hire and grow.

[00:10:07] So it doesn’t have to be a win-lose battle. It could be a win-win. We just need to be okay with having that conversation, holding that accountability, and looking at the metrics together to figure out a way that we can make it work.

[00:10:19] Linzy: Mm Yes. Yeah. I think you are kind of speaking to my own business right now and some things on my mind in terms of team because it’s like when you bring folks on board, especially when you’re a very relationally focused person, which I am, and which the folks who are listening are as well…

[00:10:32] Yeah, we love the people who work for us, right? And like, we want to take care of them, and we know their story, and we know their partner, and but yeah, that, that other piece of the equation I’m hearing is, their position is sustainable if they’re performing. If they’re making the revenue come in that you need to have from their role, then it can be sustainable, right?

[00:10:52] But they’re responsible, too. You’re not the only one who’s responsible for the business being successful. So, there’s an accountability piece there, I’m hearing. And I’m curious when you’re trying to build that accountability in your team, like, to be like, hey, I want to give you a raise, I agree, but you’re going to have to see 18 clients a week to do that…

[00:11:11] How do you start to shift to have your folks in your team take responsibility and accountability, if maybe that’s something that they haven’t been doing before? Maybe they haven’t been tracking their numbers or thinking that they’re responsible for their numbers. How do you work through that with team members to get them, basically get them on board with the project, basically of making the business work?

[00:11:30] Carla: Totally. You want buy-in from your team. You want to help them understand why this is necessary and why this is important. For you to be able to keep the roles for a long time and be able to provide for your team in that way, I always say like, it’s hard to explain to an employee what it’s like to be a business owner.

[00:11:47] So don’t attempt to do that, but just attempt to show them the data and say, we’re going to start by looking at the data, not judging, just looking because we want to understand where we are at, what’s our starting point, what is our baseline. And then we are going to track progress towards hitting those goals that we’re trying to achieve.

[00:12:04] And we’re going to come together and define what that reasonable timeline is to get to those goals. You can’t tell your people, well, you’re not meeting performance and you’re not hitting your goals if you’re not giving them new patients as leads. So that also falls on you as a business owner to produce the necessary patients and clients to be able to meet the goals that you’re asking the team to meet.

[00:12:24] So it goes both ways because then they’re going to come back to you and say, well, I don’t have enough clients. So when you give me enough patience, then I’ll be able to meet the goals. So, we have to be realistic too. We have that side of accountability. Assuming that that’s handled, and you got that under control,

[00:12:39] Then you can go to your team and say, hey, in the next three months, I would like to see some progress towards achieving these goals. We’re going to work together. We’re going to share what’s working, and not working well. How do we help, you know, with retention and making sure that everybody has what they need to be successful in the role?

[00:12:55] Do you all agree that these are the right metrics? Are we all bought into this and the why behind, you know, being able to hit these metrics is going to help us to stay in business long term? And if the team rallies, you know, on that, then suddenly you have all this buy-in and this positive energy that you’re working with the team on.

[00:13:14] I’ll be honest. A lot of times accountability does bring up the people that are not bought into this, and they might choose to leave. They might choose like; this is not the right place. You’re focused on metrics. I can’t talk about numbers. I’m out. So I do want to prepare owners that, if they push too hard too soon, this might backfire.

[00:13:34] So be incredibly careful in your approach by starting with, let’s look at the data together. What are you all noticing? Are these the right goals? Maybe people want to adjust their goals, and they never had a chance to talk to you about it because they were afraid, or they were not sure that they could. So right now, you’re opening a door to have those conversations that maybe better suit their lifestyle or their needs and now they feel heard.

[00:13:56] So now this could be another opportunity for you to establish an even closer relationship with your employees and clinicians by meeting their needs through this, you know, looking at the data together. So, it can bring up a lot of things but just be prepared that some people might not like it.

[00:14:12] And as a business owner, there are things we do because we need to have a viable long-term business that we’re thinking about strategically managing to performance goals. And then we have a business where we also can, you know, take care of our people and afford to do so because now we have the profit to do it.

[00:14:30] Linzy: Right. Yes. Something that I have found working with group practice owners… one way that I think about it is there’s going to be the number of clients that folks see each week that kind of covers the running of the business, right? Like there’s a certain amount of money that must go out the door just because the business exists, right?

[00:14:47] And there’s going to be like the rent, there’s those fixed expenses, then there’s like the next little layer of variable expenses that are, you know, higher because somebody’s there. And it’s only the money that they bring in and leave in the business after that, that is that profit margin, right?

[00:14:59] That is the oxygen for business. But that’s also where I think folks tend to like a flag and whereas, business owners, we sometimes have a hard time like pushing somebody to be like, “Hey, you’re supposed to do 14 and you’re only doing 11,” because like that last three, that’s the difference between there being extra money in the business, some like profit, some oxygen.

[00:15:17] Or not, right? But I think that that can be a tricky conversation for people to have with their employees. Because you’re asking them to work a little bit harder, and as you say, they don’t have that perspective of being a business owner, right? They’re in it to see clients.

[00:15:30] So this, this piece about buy-in, I think is really important. And I see it as sometimes a tricky line for folks to walk is helping your therapists understand this is what needs to happen for the health of the business, but also helping them feel supported. Like you’re creating the container where they just have to show up and do clinical sessions, but also, we’re all responsible for this thing thriving.

[00:15:51] There’s like kind of like a balance point that has to be reached there.

[00:15:55] Carla: Yeah. And what I find often when we even start up those conversations is therapists will bring up what are some of the issues or barriers on why they’re not able to achieve their goals. And suddenly it becomes a great opportunity for you as an owner to coach them or give them some support or advice or ways that they can overcome some of those barriers where before maybe that conversation wasn’t even happening.

[00:16:17] And so it’s not always all bad. Sometimes it does reveal, oh, well, they are struggling with retention. I have 10 ways that you can work with clients to help with retention. Let’s talk about them and share and make them a better clinician because now they’re able to start and complete a treatment plan that before maybe wasn’t being completed because clients thought it wasn’t important and they just like forgot, or whatever 

[00:16:40] happened. They’re able to emphasize the importance and to finish that treatment plan for the patient, which leaves them better off, which then the clinician feels more satisfied with their job and they’re not struggling in silence and feeling like, Oh my God, I’m never going to be able to hit that metric.

[00:16:56] Now we’re talking about it and helping them achieve the goal.

[00:16:59] Linzy: Yeah. And that coaching piece I think is so important, and I’ve noticed that as having a company now, most of my energy goes towards helping my employees rather than serving clients in the intensive way I used to do before is like, yeah, you have the opportunity as a leader to coach folks, but there needs to be a container where these conversations are happening.

[00:17:19] Right. And it’s easy to not have these conversations and it’s easy for issues to be kind of festering under the surface like you’re talking about. Somebody’s struggling with something, but there’s no way for them to come and tell you about it. So they’re just kind of carrying it by themselves. And they’re not feeling happy or satisfied.

[00:17:32] Their clients are not feeling happy or satisfied. You’re not feeling happy or satisfied. But nobody’s talking about it. So, like I’m hearing that, you know, actually bringing your team on board with metrics and being like, hey, this is what we need to hit. This is our plan to hit it is an opportunity to improve their work experience and improve the work that they’re doing.

[00:17:49] Carla: And. Yeah. One thing I’ll add is that there are expectations we set whether intentional or unintentional in our practice today as it is. And so, if you’re intending to change your people that you already had and have let them get away with whatever, or, or had this behavior or tone, and all of a sudden you’re changing it, this could be rough, right?

[00:18:08] So maybe you encourage new folks to set new expectations as you’re bringing in new hires. You set these new expectations that are clear, that are kind, that you expect of them. So, it becomes a bit of a shift in culture over time rather than a shock to the system. So just kind of the approach you want to take here is not suddenly:

[00:18:27] Now we’re numbers focused. Everybody must hit their goals like good luck or you’re out or you know, not really, but gently be like, hey, let’s start looking at the data together. What questions do you have? You know, should we hit your goals? What’s getting in the way of it? And then with every new hire, you set a new expectation and the new expectation is that we will provide enough patients to hit your goals.

[00:18:46] You let us know when you need help. Otherwise, we’ll assume you’re performing to those metrics, and we’ve aligned on compensation for those metrics. And then we don’t need to have this discussion. We were just going to keep measuring and be okay with that. But I always caution like being gentle in the approach of bringing this up because a lot of people just feel.

[00:19:05] Like that is not what they want to be talking about or like they don’t want to be held accountable and that’s okay because that is probably the culture you said in the first place, so it won’t be easy to change. Because it was unintentional, right? As business owners, we unintentionally do things and forget to emphasize the need for this profitability aspect of the business so that we can all win.

[00:19:27] Yeah, because that culture changes piece, like it takes a long time to change culture, right? And so I think that’s a really helpful way to name it. There are expectations that you’ve set. There’s a culture there. This is a decision I see sometimes folks making in Money Skills for Group Practice Owners,

[00:19:42] My course, is when they have identified like, oh my gosh, the expectations that I’ve set with my first three employees don’t work, they’re not working for the business. Yeah. Then they must decide, okay, how rapidly do I change these expectations? Do I leave these relationships the way that they are?

[00:19:59] Do I hire new people? And what I have observed is often once folks identify what they do need to make the practice sustainable, make it work, make it profitable enough, it’s a relief when you hire those new people and you’re setting the expectations right from the beginning. Because you’re like, okay, I’m not going to make the same mistake this time.

[00:20:15] So I’m going to say that, too, to folks listening. I think sometimes when group practice owners, especially if they’ve started more casually. Like, again, you hire your friend because they’re looking for a position, and you have more clients than you can handle. Suddenly you have an accidental group practice.

[00:20:28] And then you realize, like, oh my god, I’ve set this up to fail. Like, these numbers do not work, and they will not work. Sometimes what folks do I think they have to do is throw the baby out with the bathwater, and just shut it down and give up. But yeah, you can set these new expectations with new folks, and it is… Once you know what you need to do, it’s easy to make new hires and be clear with them about, exactly.

[00:20:49] As you said, like, this is how many folks you need to see. This is what I’m going to do. This is what you’re going to do. This is how we’re going to communicate around this. It’s a relief once you are clear with expectations because your folks will be happy to meet them if they understand what they are, right?

[00:21:03] But it’s, it can be hard to change them with the folks you already have.

[00:21:07] Well, for this audience, you know, clear is kind, like Brené says, so we are going to go with that. And with the existing team, we’re almost kind of rewarding that loyalty long-term. They’ve been with us since we opened or started, and that’s okay to have exceptions. I always say they must be made intentionally, though.

[00:21:24] So we’re going to choose the first two, three people. You know, we did what we did. We didn’t know it was fine, whatever. It works. We don’t want to change it. We don’t want to break it. We don’t want to, you know, separate from anyone who has helped us build this far, but going forward, we have an option to change it and set a new intention with profit in mind and purpose still, so we can have the impact we want to have for the long term.

[00:21:49] And that doesn’t happen if you don’t have a profitable practice. And that’s paying you as well.

[00:21:54] Linzy: Yes. Yeah, because another point that I see folks struggle with, Carla, is like the insurance versus out-of-pocket piece, right? So, there’s another piece where it’s about like we want to take care of folks, right? How do you suggest people navigate this question of whether to take insurance in the group practice, whether to take private pay, you know, like how those fit with the numbers?

[00:22:19] How do you suggest that people think and work through this question?

[00:22:24] Carla: Yeah. So, I mean, we all know private pay. You know, margins are higher. Room for errors is higher, is what we always say, because you can get away with a lot of things that when you have panel insurance, you cannot. Insurance dictates rates, insurance can lower your rates unexpectedly. And if you have a large carrier, they get to control whatever they want to pay.

[00:22:45] And you don’t get to change that just because you don’t like it and whatever cost structures you set, don’t change just because the insurance rate changes. So be careful with how much room you have in your reimbursement rates, understanding what are your reimbursement rates, month over month, year over year, and how are they changing.

[00:23:03] How dependent are you on one carrier versus two or three, what are the top carriers that you have? And make sure that you’re paneling your clinicians based on the type of carriers you want to continue to work with, and, you know, that pay you fairly and that you feel like you can compensate your clinicians accordingly because of that insurance rate.

[00:23:22] It’s going to be a key aspect of what we evaluate when looking at growing through insurance. The process is long. The process is tedious, and once you get credentialed, then you’re good because you know, you’re going to get reimbursed a certain rate per session and it’s really all about the insurance billing follow-up and making sure you get that cash in the door because what changes is you used to collect upon service.

[00:23:48] Now you’re waiting 30, 60, sometimes even 90 days for insurance to pay you. So, if you haven’t factored that into your cash flow, meaning the cash you have in the bank to cover your bills today… Because guess what? Payroll doesn’t stop just because you’re waiting for insurance payments. So now you must factor that into your timing of cash going out the door versus coming in.

[00:24:09] And that sometimes throws practices off for a loop because they’re just like not prepared financially to make that change. And they’re just out of desperation, because their private page dried up, decided to take on insurance, and had no idea the time it takes to recoup. Also, you’re adding billing costs because now you need to have a biller who knows what they’re doing and following up.

[00:24:28] Okay. And making sure that, you know, the denied claims or rejected claims are followed with, and that insurance does not sit on your money for longer than they need to. And if you’re not aware of that process or familiar with it, it could hinder your practice. And now you’re going to see yourself in need of a line of credit or something to hover you over till the time that those checks get deposited.

[00:24:48] Once it gets going, it’s a little bit easier because now you have a recurring stream of income from insurance Payments, sometimes some lump sums, which is kind of nice, but sometimes insurance also has its cycles. They decide, you know what? We want to make our numbers look better by the end of the year.

[00:25:02] So we’re just going to pause payments until the beginning of the year. And then people are not prepared for that. But then we see that in the seasonality of their business, where we know that this is a trend, and we prepare for that downed, you know, number of payments that we were not going to get just.

[00:25:17] right after the first of the year because it happens, and that’s how insurance works. And so being aware of those variables is going to be key in managing not only your profitability and margins but also your overall cash flow needed in the business.

[00:25:30] Linzy: Hmm. Yeah, because, you know, I think that it’s easy to take on insurance panels, and this conversation is about American therapists… Canadian therapists will recognize that this is a different system than ours, but I think that folks take it on because it seems like it’s going to be easier.

[00:25:45] It’s the easier way to get clients, but what I’m hearing from you is financially, it’s much more complex, working with insurance. Right? And like that delay you’re talking about I’ve seen play out in people’s numbers, as I’m sure you have many times, where it’s like, yeah, you saw $10,000 of clients this month and payroll has to come out, but that $10,000 isn’t going to show up for three weeks or four weeks, which is a huge delay.

[00:26:09] So yeah, that all must be taken into consideration as you’re planning the way that the money works in your practice. 

[00:26:15] Carla: Yeah, it’s a shift in business model and I think people don’t recognize that. And they again, out of desperation or need, or even just out of diversification, which we’re all about, by the way… Diversify the type of clients, the price point, the type of insurance, like where you get your clients from, all the things…

[00:26:33] They just don’t factor in the impact they can have on the overall financial health of the business. And they don’t properly prepare ahead of making this decision to ensure that they can live through it and switch to the side where now you’re seeing recurring payments coming, and it’s a little bit easier to weather.

[00:26:49] Linzy: Yes. Because then the other thing that just happened, recently, you know, was the, the change healthcare crisis. We also know and I think that was a massive shock, for everybody to realize how much dependency there is in that system, right? Like something can happen that has nothing to do with you, nothing to do with the quality of your sessions, nothing to do with like, anything to hazard you.

[00:27:12] And yet your group practice, or this happened for solo practitioners, too, your solo practice is a hundred percent impacted, right? Like I, I know some folks where it’s basically like almost all their money stopped for this long period while people went and worked away on things, maybe not as quickly as they could.

[00:27:30] Who knows? Um, yeah. You really kind of are at the will of this really large system.

[00:27:36] Carla: Yeah, that’s why again diversification of ways that you get paid, who you get paid from, and all that, is super important but that is a very unexpected one-time event that can throw your business and put you under, like completely out of business. And what I tell folks is like we always want to have just enough room between something happening, and we having to panic. Because we want to buy that luxury of time to think and react. Because it’s not about fixing the problem. We can’t fix what happened to change health care, right?

[00:28:05] And then they got attacked again, and it’s just like been like a series of issues from there on, and the fact that some of the You know clearing houses or EHR systems didn’t have a backup tells me a whole different issue, you know. And the system is broken and they should have come to the rescue much sooner than they did to avoid businesses going out. But you know, in any case, we don’t have control over that. What we have control of is creating a cash runway to allow us to have not that panic button sit in, but have that time to react, and decide: What are we going to do about this?

[00:28:36] Okay. And it should, we should have had a line of credit or something available to us where, if something happened, we had a way to cover that cost, either the cash profits you saved in the business or a, you borrow debt in some way, temporarily short term. And I know there were some loans given out for that, too, to kind of help.

[00:28:52] It took a minute. By the time you did that, you probably had one or two payrolls that you had to run at that point. So just again, we want to always be prepared for the unexpected. We don’t want to wish upon the unexpected, but we need to be financially prepared for what could happen. It could be just, you know, a bunch of people just don’t pay us on time.

[00:29:10] Like it could be as simple as that. It could derail. Because I find a lot of business owners are living in this paycheck-to-paycheck cycle of business ownership. And it’s like, they’re just one paycheck away from going out of business. And it’s such a dangerous place to live in when you not only are taking care of yourself, but you’re also taking care of others.

[00:29:27] Other clinicians rely upon you to pay them on time to pay their bills and make a living. So as a business owner, I think we have a responsibility to, over time… and I’m saying like, this is good financial habits to start to work towards. So, if you’re not there today, do not judge yourself.

[00:29:43] This is not the point of this. This is a point of like where you get to learn what’s needed, and you start to implement that action in your business. So put aside a percentage of your profit every month. And if you’re not profitable today, craft a plan towards profitability with all the things we talked about today and start to map out when can you start to see positive results so you can afford to have a cash runway, you can put a little money aside every month that will save you from that unexpected.

[00:30:09] And that unexpected could be maybe you being sick. It could be anything. Right? And you want to have that luxury of time the cash in the bank buys you. So, you can have a moment to think, a moment to reassess, and then decide what’s the next best course of action. And when you have that in business, you sleep better at night and then your people know that you’re taking care of them because they don’t have to worry about, oh, am I going to get payroll next month or not?

[00:30:34] Like, should I be worried? Should I be looking for another job? Like you do not want that on yourself, or that stress on your clinicians.

[00:30:40] Linzy: No, yeah. And I mean, that’s such a good point because I was thinking, where do people start, right? If they’re listening, and they’re like, I have none of this, you know, like, oh my gosh, I have all these hard conversations to maybe have with my team, and I need to figure out what I even am.

[00:30:53] And I’m hearing the starting point is like, first, find a way to become profitable, right? If your numbers are not working now, figure out what that way is. And like, thinking about what we’ve talked about, it could be setting clear expectations for how many clients, you know. Probably just folks filling in the contracts they already have with you and seeing the amount that they need.

[00:31:11] Carla: That’s a great starting point.

[00:31:12] Linzy: And it is one though where I do see lots of folks not work to, you know, have their, their clinicians uphold because they’re like, well, they’re pretty close or like, Oh… They blame themselves or, you know, whatever. So, I’m hearing that. Where else do you tend to see spots where there’s an opportunity for folks to create profitability,

[00:31:30] Have that extra money, that oxygen in the practice? Where should they be poking around if they know that this is a problem for them?

[00:31:37] Carla: They should be researching their pricing across the marketplace. You’ll be surprised how much inflation has driven costs up and that you maybe haven’t been keeping up. And if you haven’t increased your rate in the last one or two years, you should be looking at that. And even requesting increases from insurance, even if they deny it, you keep 

[00:31:53] asking. Because I find that sometimes they will say yes, or they were like, oh yeah, we forgot, and it’s been three years, and we should have given you one, but you just never asked, so we never gave it to you. So, we’re always asking for an increase, or we’re always planning some kind of yearly increase in our prices. Because more revenue doesn’t fix the problem.

[00:32:10] If you have a margin, it’s just going to magnify the problem and get you further into the whole. And people think, oh, I’ll just make more money, do more sessions, and then everything will be fine. No, you’re just compounding the issue you already have. So, until you fix the structure and the underlying problem, you’re going to continue to have that problem.

[00:32:27] And then the next piece is looking at, how many clinical billable sessions the practice needs to have and are close to meeting that or not. So that’s talking to your folks inside. And then next you need to look at your cost. Maybe you’re just spending too much in some areas and get where can you be more efficient, save some time, maybe you pay for a tool that saves you time or not having to do that, you know, task the clinicians are tasked with, or something that saves you time, or you’re paying money for something, maybe you’re not getting the benefit from it anymore.

[00:32:56] Like it was benefiting you in the past, but it no longer serves going forward. Reassess that. Maybe it’s combining 10 tools, and buying one that actually does all 10 things, and then costs you less. It could be… you know, whatever those changes are small, could add up over time. And then sometimes you maybe just need to invest more in marketing.

[00:33:14] You know if you are profitable, but not too profitable, but you have the right margins and you have the right profits about scaling and growing and doing more billable sessions, bringing in more clinicians. Again, that is if you’re already having some sort of profit and success there. If not, we have to get you to profit first by lowering costs, increasing margins, or increasing a price point and bringing in more revenue without adding additional time costs to your team.

[00:33:38] And those are the levers we can pull to be able to shift the narrative on profitability.

[00:33:44] Linzy: Yeah. And you know, as you’re talking about that, it’s making me think about my analogy for group practice when I talk to folks is group practice is like a machine, and it’s a complicated machine, right? And often group practice owners build that machine kind of haphazardly where they’re like, oh, I’ll just set the rate that I charge.

[00:33:59] I guess that’s what you charge. And we’ll work with this insurance because I already know them. And like we end up kind of accidentally making these decisions that have large financial consequences. Yeah. And as you say as your business grows, the consequences also grow, right?

[00:34:11] So like if it’s not working and you have more clinicians on their model that’s not working, it’s going to not work even more rather than fix it. So yeah, it’s really, bringing home to me this piece of this is a complicated machine group practice, but there’s also a lot of spots for opportunity to make improvements.

[00:34:28] Carla: Another one that came to mind was this office space discussion, right? There’s been a lot of push for hybrid and telehealth. People are used to it at this point with COVID. Maybe you love it, or you hate it. Whatever it is, it’s based on demand. If your people want to be seen in person, then they might be driving you to have more office space, and you just must do that to satisfy your clientele.

[00:34:49] But maybe some clients are more flexible and allow you to do telehealth and hybrid. Yeah. Then maybe you don’t need so much office space. So just kind of considering those models and making the decisions that are right for you and your practice and your patients that you’re serving is going to be key.

[00:35:03] But sometimes I think we’re afraid to ask the question and what we say, explore all the options. You do not have to decide today. Just talk about them; analyze the options. See which one sounds best for both the business and what feels right for you. And also from the profitability standpoint, you know, we might make some recommendations that are a little bit different than what you thought the direction would be and be open-minded about considering it.

[00:35:28] We’re not saying you must do it. We’re just saying, let’s talk about it. Is there a middle ground we can get to where we can make the changes necessary without too much impact? And then you still feel good about your practice because, at the end of the day, it is your business. You get to decide, and you get to do what’s right for you and your employees and your patients.

[00:35:43] Linzy: Yes. Great. So, Carla, thank you so much for joining me today and bringing this CFO expertise into this conversation about group practice. For folks who are interested in hearing more from you, can you tell us a little bit more about what you do and where people can find you?

[00:35:58] Carla: Yeah. We have joined your leadership staff team at the executive level to run and lead the finance function of the company. So, if you today have maybe a bookkeeping staff or accountant, but they’re not answering your money questions, and you’re like, what about all the scenarios and all this accountability and all these clinical metrics I need to hit, and how do I get profitable,

[00:36:19] and you’re not sure who to turn to, that’s where you need the help of a fractional CFO. And we come in and again, lead that function to make sure that it’s handled, monitored, and controlled, and giving you those opportunities and options to assess as you’re making the decisions that are right for your practice.

[00:36:36] So if you need that kind of help, and you’re ready to work with a fractional CFO, you can book a call on our website at wealthworthwithin. com. We would love to have a conversation about your needs and how we might be able to support you and meet them. If not, you can follow us on our newsletter on our website as well.

[00:36:51] We share a lot of information about what we are working on with clients. Like how are we helping them drive profitable businesses? And we’ll put a lot of educational content out on social media on Facebook, LinkedIn, and Instagram, at Wealth Worth Within.

[00:37:06] Linzy: Wonderful. Thank you so much for joining me today, Carla.

[00:37:09] Carla: Thanks for having me. 

[00:37:25] Linzy: I know in this conversation with Carla today, there were a lot of technical pieces, lots of financial language that might be new to folks who are listening. And I want to encourage you if you were listening and you know that there are things to look at, the biggest part of starting to understand your numbers is just to be with them.

[00:37:46] Right. So just that starting point of starting to look at, okay, you know, if you have a group practice, how much money is coming in from this certain clinician? How much money are they getting paid? How much money does it cost me to run the practice every month? And when you look at all these things together, how much money is being left behind, right?

[00:38:03] Is this position profitable for you? I know I have tools that help folks figure that out in Money Skills for Group Practice Owners, because there is a complexity there, but also just sitting down and being with your numbers is a starting point. Getting curious, and starting to poke around with the numbers in your business, whether it’s solo practice or group practice can help you start to see what is not working.

[00:38:24] Linzy: Right? And that’s where we can make change. But if we fall into that mentality that Carla mentioned of just like, just seeing more clients, or just hiring more clinicians, you can just end up doing more of what is not already working. So, if you feel like the numbers are not working in your practice before you use that knee-jerk reflex and just start trying to get more

[00:38:46] clients, just look at your numbers and just be curious to see what your numbers need to look like to make them work. And then you have an actual goal to work towards rather than maybe actually just amplifying something that already is not working in the practice that more is not going to fix.

[00:39:01] So a helpful distinction that Carla made here today. You can follow me on Instagram at money nuts and bolts. And if you are enjoying the podcast, please do tell a friend about it. Maybe a group practice owning a friend. Maybe they want to check out Carla at, wealth worth within. Com, wealth, and worth

[00:39:22] Within is her business. Or maybe they want to learn more about Money Skills for Group Practice Owners, which we’ll be opening again in the fall. They can always come over to my website, moneynutsandbolts. com, and click over to our page for Money Skills for Group Practice Owners, or maybe you are a group practice owner who wants to get your numbers working.

[00:39:39] You can check out Money Skills for Group Practice Owners. We’ll put a link in the show notes for the wait list for that course. Group practice… We need folks who love humans in that work. I’ve said this before in the podcast, and I will say it again. So, if you know someone or if you are someone who loves to lead others and wants to create great work environments for therapists, folks like Carla and I are here to support you in being able to do that.

[00:40:03] Thank you so much for listening to the podcast today.