[00:00:00] Tracey: I’m really kind of digging into my numbers, figuring out what makes sense to be paying my employees, and I want to look at where I can increase revenue 10%, cut expenses 10%, 5%, and kind of get to my sweet spot.
[00:00:29] 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 really working for them in both their private practice and their lives? I’m your host, Lindsay 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 podcast episode is a coaching episode with listener Tracey Steger. Tracey is an acupuncturist. She owns a group practice with two associate acupuncturists. She also has some administrative staff. And today Tracey and I dig into a question that many, many, many of us have asked many times, which is, where is all my money going?
[00:01:12] So, even though Tracey’s business has grown, and they are seeing 65 to 70 clients a week between her whole team, there is not any money to show for it. So today Tracey and I dig into her numbers a little bit, but really at a hundred mile view. We really zoom out on her numbers, look really big picture to understand generally what’s happening with these numbers, identifying places to be curious, places to tweak.
[00:01:36] And something that Tracey and I dig into as well is when we have things not working in our businesses,it’s really easy to fall into these parts of us that are kind of these burn it down parts, right? Like really thinking about our escape fantasy, just burning it to the ground.
[00:01:51] This isn’t working. I should just go back to solo practice. I should drop out of this profession altogether. And something that Tracey and I explore is the fact that her numbers are actually closer to working than she thinks they are. And that’s the case for so many of us is when our numbers aren’t working,
[00:02:06] rarely is it actually the dumpster fire that we think it is. Usually there’s places to make tweaks. Right? Like little changes that will get you to the numbers that you want to see, right? The machine is generally set up well. It’s starting to tweak the way that that machine is working to give you different results.
[00:02:23] So we play with some of that, that curiosity and exploring where she can start to explore how tweaks can be made. A really important skill for all of us as we’re trying to assess what’s happening in our business. Here is my coaching episode with Tracey Steger.
[00:02:38] So Tracey, welcome to the podcast.
[00:02:49] Tracey: Thank you for having me.
[00:02:50] Linzy: Yeah. I’m so glad that you are here. So Tracey, let’s set a little bit of context for your practice and where you’re at, and then we can dig into what’s going to be most helpful for you today. So tell me a bit about your practice.
[00:03:04] Tracey: Yeah. So I own an acupuncture clinic in Maple Valley, which is just like an hour outside of Seattle. I’ve been in practice for 10 years now, and I currently have two acupuncture employees, one office manager, and then another part time front desk. And we see about like 75 to 80 patients a week.
[00:03:28] Linzy: Wow. Okay.
[00:03:29] Okay. Yep.
[00:03:30] Tracey: Quite a few.
[00:03:31] And I feel like as we’ve grown and we’re seeing more and more patients, that I feel like I have more and more expenses. And I’m at the point where I’m like, do I just go back to just me? Because that felt a lot easier in a lot of ways.
[00:03:47] Linzy: Okay. Okay. Yeah. So tell me about what would be helpful for us to zoom in on today. What is not working?
[00:03:52] Tracey: Definitely, like, I feel like we’re seeing more clients. We should be making more money. But then I feel like it’s getting lost
[00:04:03] Tracey: somewhere. There are some leaks somewhere.
[00:04:05] Linzy: Money is disappearing. Because we have this idea, naturally, that as your business grows, more money coming in the door means obviously there’d be more left. There should be more for the business, more for you. But I’m hearing that’s not, not what is happening.
[00:04:19] Tracey: Yes.
[00:04:20] Linzy: And you’re even considering like, should you just go back to just yourself?
[00:04:23] Tracey: I think about it. If I didn’t love my team so much, I would very much consider it because I, I just feel like it was easier and it was like, I see this many people a week. I make this much money and now that’s not the case.
[00:04:38] Linzy: Yeah, yeah, I think we all have our escape fantasies from the business model that we’ve built. Sometimes our escape fantasies are accurate, like it might actually be true that it would be more efficient for you to work alone. Sometimes they’re just like the things we tell ourselves would be better that maybe wouldn’t actually be better.
[00:04:54] I’ve had an escape fantasy before about working at the Costco bakery. I don’t think it would actually be better than what I do but I think it’s a nice place to work. they’ve got great benefits. So yeah, so it’s about, yeah, I’m hearing like your brain is turning to this like maybe I should just go back to how it was before. Yeah, okay. Okay, so 75 to 80 patients a week. So I’m curious, Tracey, right now, how, if at all, are you tracking your numbers? Like where do you know what money’s coming in, what money’s going out?
[00:05:24] Tracey: I kind of track through Jane, and then also in QuickBooks.
[00:05:27] Linzy: Okay, okay, so you’ve got your revenue in Jane then, your income, Jane being practice management software, and then you’ve got expenses in QuickBooks. So we do have those pools of information. How up to date is that information for you? Jane’s going to be up to date because you’re using it with patients.
[00:05:43] What about your QuickBooks?
[00:05:45] Tracey: It’s up to date.
[00:05:46] Linzy: So we have numbers. Do you want to look at numbers together? That would make me so happy. Okay. So you do have the ability to share your screen. you’ll see at the bottom, so you can take a minute to cue up your QuickBooks and cue up your Jane, and then we’ll poke around together.
[00:06:01] Tracey: Awesome. And do you want, like, the last month or year to date?
[00:06:09] Linzy: Let’s look at the first five months of this year. cause you probably don’t have like the month to date is not going to be a complete set of numbers yet. Do you think your main numbers are complete?
[00:06:21] Tracey: I think they are. Yeah, because my bookkeeper… We have closed the books through May.
[00:06:27] Linzy: So let’s look at January through May so we have a nice, like, five month snapshot.
[00:06:31] Tracey: Perfect. January to May.
[00:06:34] Linzy: And you know what? Actually, let’s do December through May, because then we catch the holidays. Let’s look at the low times, too.
[00:06:41] Right?
[00:06:42] Tracey: Let’s do it.
[00:06:43] Linzy: So that gives us a nice six month period to look at.
[00:06:46] Tracey: Cool.
[00:06:47] Linzy: Okay, beautiful. So we’re in your QuickBooks now, which is where your expenses are captured, and we’ve made a six month picture, right?
[00:06:55] We’re looking from December to May, so we’re catching the holidays, right? Like, sometimes we like to exclude the downtimes when we’re thinking about numbers, because they’re not as fun.
[00:07:02] Tracey: I know.
[00:07:03] Linzy: But they are important. They are part of the picture all the way till May. So we’ve got a good six month period, which is, as we’re starting to get to know your numbers, that is a good amount of time to start to look at, to have a zoomed out perspective of like between higher months and lower months, what starts to look normal and average, right? So I see in that time there was 164, 000 of money coming in that quickbooks knows about which is probably going to be money coming in minus like your processing fees for jane like credit card fees
[00:07:32] Tracey: Yeah. There’s all these expenses.
[00:07:35] Linzy: Then there’s all yeah, go and go. Okay, so let’s take a look. We’re gonna do, a bit of an analysis here just to see, yeah, what’s going where from a really big picture perspective, right? Like, these are numbers that obviously are much larger than what you have to look at on a monthly basis, but they let us see Again, between those highs and lows, how do things work out?
[00:07:53] So, that very top number, if you can go to the top again, Tracey, I’m going to grab the number coming in the door. So in that period of time, you had 164,341 in revenue. So that’s money coming in the door. It’s probably after credit card processing fees, but that’s fine. That’s what you have to work with.
[00:08:09] So, Then we’re going to go down. Does that seem low or high? Are you pausing on that?
[00:08:15] Tracey: Oh I was… I think that’s without.
[00:08:18] Linzy: Okay. It’s before.
[00:08:19] Tracey: The way I do it, I add it back in as income and then it out.
[00:08:22] Linzy: Great. Okay. So you’ve got that in there. Okay, great. yeah. So when we go down here, then let’s look at your expenses. So your expenses, we have like supplies, which for acupuncture is something additional. That’s an additional thing that you have to pay for as somebody who uses supplies in your work.
[00:08:39] So we’ve got supplies, advertising. I see that there’s some tax paid there. Like that’s a business, business tax…
[00:08:46] Tracey: you know? Okay. Yeah. We’ve got insurances. Okay. Not a lot though.
[00:08:55] Linzy: This is just like your overall practice insurance. Some interest paid, probably on like a credit card.
[00:08:58] Tracey: Yes, that’s another…
[00:08:59] Linzy: Okay, yep, yep, that’s in the mix. Okay, so I’m going to pull those expenses out separately from payroll because then we have payroll down below, right? So if you scroll down to the bottom of this
[00:09:09] section, there we go, total expenses. So I’m just going to take those total expenses, and looking at that number, I can see why money’s not feeling great because this is a bigger number
[00:09:19] than the number at the top. So we’re going to look into that in a second. So it’s 172, 325. I’m just going to subtract what I see there as your staff expenses, right? because you’ve got those in a separate little section. So I see here that your operating expenses, like the money to run the business, is 50,693 for that six month period.
[00:09:42] Your payroll expenses are 121, 623. Okay, let’s just scroll down and just see if there’s anything else on here.yep, so it’s showing a net loss in that time of 8, 000. Does that ring true? Is that your lived experience?
[00:10:01] Tracey: It is, and this, like, December, January, February, I actually had, let go of an employee and hired somebody else in November and it took us like four months to get her credentialed with all of our insurance panels, so things are looking brighter currently, but, this is still…
[00:10:23] Linzy: This captures that period of time where there was a new practitioner that you were building her caseload. Okay. Okay.
[00:10:29] yeah, Okay. So when we look at this, just to give a general sense of numbers, again, this is a nice zoomed out perspective. It’s good to hear that you know your numbers are trending in a better direction now.
[00:10:39] But let’s just take a look at… to answer this question. Where’s the money going? Why does it feel like you have no money? So when I take your operating expenses and I divide it by the money coming in the door, your revenue, your operating expenses are about 30, I’m going to say 31%, it’s 30. 8%. So 31 percent for OPEX is pretty good.
[00:11:00] Like that’s pretty typical, for operating expenses. Do you have a space that you rent? I would assume so, yes. Virtual acupuncture, not a thing. Yeah.
[00:11:08] Tracey: Not a thing.
[00:11:09] Linzy: Okay, yes, okay, So including all of that, when I look at your staff expenses, I see 121, 623. I’m going to divide that by the number coming in the top, and I see that that’s 74 percent.
[00:11:24] Tracey: Mm hmm. And that includes myself on payroll as well.
[00:11:29] Linzy: Yeah, so that’s you, too.
[00:11:30] So, that’s that 8, 000 loss is that in period time. It’s like you spend 105 percent of what came in the door in this particular period. That happens sometimes just to put that in context, like there’s going to be periods in the business where more is going out the door for various reasons rather than coming in.
[00:11:46] But in the six month period, that’s how those numbers shook out. So let’s zoom in on staff. and your staff expenses. Tell me more about how you’ve structured your, payroll.
[00:11:58] Yeah. So my employees… Well, the office manager and the front desk are paid hourly.
[00:12:06] The acupuncturists are paid a base hourly rate plus a bonus per patient.
[00:12:13] Linzy: Okay. So tell me about their base rate and the bonus per patient.
[00:12:17] Tracey: So, for the acupuncturist, it’s 20 base rate. I just felt like, you know, if there’s cancellations I felt weird about people being in my office without being paid if they’re, even if there wasn’t patients. So that’s our base. And then for, first acupuncture visit, it’s 40 as a bonus.
[00:12:38] And then for return visits, it’s 25.
[00:12:41] Linzy: Okay.
[00:12:42] Tracey: Bonus.
[00:12:43] Linzy: Okay. So the 20 base rate, is that an hourly rate? Is that what you mean?
[00:12:47] Tracey: Yes.
[00:12:48] Linzy: So like if I’m in the office for five hours, I’m going to get a hundred dollars for being there.
[00:12:53] Tracey: If nobody shows up.
[00:12:53] Linzy: Even if nobody shows up. Okay. Okay. So, I’m curious, like, tell me what led you to set up that particular model. I’m hearing you felt bad.
[00:13:03] Tracey: Yeah, I set it up that way because I did, and I haven’t really done this, but if there was downtime to then have other tasks that they could do, if that makes sense. And then also to have time, so like they could, spend 30 minutes finishing up their charts at the end of the day and still have that as part of the payment.
[00:13:24] Linzy:Okay.
[00:13:24] Tracey: The idea then is you’ve built a base rate so that they could be doing other things. It’s like you don’t want them to be like, wasting their time, hanging out at the office, I’m hearing. but that this hasn’t necessarily always happened that that other work has been found.
[00:13:38] Yeah, I mean, they’ve been consistently busy enough
[00:13:44] to where that, hasn’t been an issue, yeah, and I think the, one of the bigger, like, overarching issues is, like, me wanting to pay a living wage, and we’re 75 percent
[00:13:56] insurance. And just declining reimbursement rates.
[00:14:00] Linzy: Because this is what I’m wondering is, how do these numbers shake out? Like what, do you get reimbursed by an insurance company for an acupuncture session?
[00:14:08] Tracey: I mean, on average, for a return visit, so I averaged, like, all of the visits for new and return all together, it’s 100 per visit.
[00:14:17] Linzy: Okay.
[00:14:20] Tracey: If they see people back to back, they can see three people in one hour.
[00:14:26] Linzy: So it’s a hundred dollars a visit and they could have up to three visits in an hour.
[00:14:32] Tracey: Essentially there is, yeah. So it ends up being like, I think like two and a half in one hour. Cause we see people on the 20.
[00:14:40] Linzy: Yes. Okay. Okay. Yes. So yeah, two and a half in an hour. So like, it sounds to me like there’s actually pretty high earning potential for folks if they’re full. Yeah. So I’m curious then, with this, like, have you run the numbers to see for one of your average employees, how much they end up bringing in in say a month and then how much gets paid, first of all, directly to them.
[00:15:02] Tracey: I haven’t done that.
[00:15:05] Linzy: Because with this, what I’m hearing, Tracey, and this is something that I so appreciate and admire and also very much relate to, is like, you don’t want to be an exploitative employer. Right? And I don’t want you to be that either. Right? So you’ve set it up to try to
[00:15:17] make sure that you are thinking about the value of your folks’ time and making sure that they are getting paid a living wage, not just like a scraping by wage.
[00:15:25] And that is totally doable as long as the money coming in the door can cover that, right? And so like, generally speaking, when we’re looking at group practices, for the wage, like for the payroll for your employee, we usually don’t want to see an employee’s payroll being more than like 55-60 percent of what they are bringing in.
[00:15:50] Right. So that’s a guideline. That’s not a hard and fast rule, but it’s like a starting point. Like if you run the numbers and it’s 75%, then we know like, okay, this is where the problem is because the money that they bring in the door, it has to pay them, but it also has to pay for expenses in the business.
[00:16:05] And then there also has to be something left over to pay you and your administrative staff is part of that business. Right. So you also have an administrative team. So it’s kind of like with that one person’s wages,, our general focus as an employer is making sure that they get paid, but also your admin team needs to get paid.
[00:16:23] The bills need to get paid. And you need to get paid for your leadership work, right? Like for that CEO, hopefully CFO, chief financial officer work that you’re doing that you’re not getting paid to see a patient because you are working on running the clinic instead, right? So there’s like a lot of work that those dollars have to do. And something that i’d be curious about is right now what work are those dollars doing, right?
[00:16:48] So taking time to look at your employees. This is a complicated equation. I’m going to tell you that. We have a tool in Money Skills for Group Practice Owners, which is our group practice course, which is extremely robust and complex that helps you think through, like, okay, this is how much the overhead is for everybody.
[00:17:05] We’re going to divide it between all the employees. So, each employee, if they are paying in equally, has to cover like 600 bucks to run the office before anything else even happens, right? And then they have to pay 500 towards the admin team wages, right? And then the money that’s left gets divided between them and some profit going back to the business, which is the oxygen of the business, right?
[00:17:27] And so when we set up our numbers, it’s not easy to think it through this way, and it’s not fun, but this is the work that these dollars have to do, right? So I’m thinking, for you, that would be a next step. Another wondering that I have is your admin team overhead. Like, how much is your admin team costing per month?
[00:17:45] How much are those folks getting paid?
[00:17:48] Tracey: My office manager is getting paid 27 an hour and then the other, like, front desk super part time is 23 an hour.
[00:18:00] Linzy: And so how many hours a week are those folks working, or how much are you paying them a month?
[00:18:04] Tracey: That’s a good question. Maybe like 30 hours a week.
[00:18:08] Linzy: Okay. For your, your full time admin or between both? Okay. 30.
[00:18:13] Tracey: Kind of between both. My super part time just restarted and she’s taking some hours from the other admin.
[00:18:20] Linzy: So she’s taking some work off their plate. Okay.
[00:18:25] Tracey: Maybe 30, 35 hours a week total.
[00:18:29] Linzy: So would we say 30 is for your main admin and then five for your front desk, something like that.
[00:18:35] Tracey: We could say that for now. Yeah.
[00:18:37] Linzy: Cause this is another piece for us to look at, right, is, these support teams are so important, and also, they add up, right? And so it’s just making sure that we’ve built the numbers away, that there’s enough money for them to get paid.
[00:18:49] So, 30 hours a week at 27 hours, if I multiply that by 4 weeks, and I’m doing 4 instead of 4. 33 to make it more conservative, assuming that they’re sick sometimes, or they take a day off. So your admin then would be, her base wage is 3240 a month before any taxes. Is she a contractor or an
[00:19:09] Tracey: employee?
[00:19:09] Mm hmm.
[00:19:11] Linzy: Okay, yeah, so before those extra, taxes that you pay, and any other benefits you have for her, and then your front desk at 23 hours a week, times 5 times 4, is 460 a month. So those two positions together are, 3240, 3700, and between taxes and benefits, I would probably add another, 10 percent to that, So if we do that just for So you’re probably looking at 4, 070 a month for your admin team.
[00:19:42] Tracey: Okay.
[00:19:43] Linzy: Does that number make sense?
[00:19:45] Tracey: Yeah, that feels right.
[00:19:47] Linzy: Yeah. And if we just look at that number, like I’m just going to take that number. You can really dig into your real numbers and really see. I’m kind of trying to get like that zoomed out.
[00:19:55] We’re getting the hundred mile view, right? So if I look at over six months, you’d be paying your admin team 24,420. If I divide that by your revenue for a six month period. Then your admin team is about 15 percent of your expenses.
[00:20:13] Tracey: Okay.
[00:20:14] Linzy: Which I would say is a bit high.
[00:20:17] Not that you can’t stay there, but it does make me wonder about what would happen to your numbers if you were able to add another practitioner.
[00:20:25] Tracey: Yes.
[00:20:26] Linzy: The beauty of an admin team is they allow practitioners to be supported and just focus on their work and like they run the show. And when you add another practitioner, chances are that’s not going to mean you have to add many admin hours if any at all, right? Just adding one more person, but you’re adding one more person into the team to generate that revenue to pay for everybody, right?
[00:20:47] It’s kind of like your group practice together. It’s like you’re all pulling money into a pot that has to take care of everybody. It’s kind of like you have to tip out the kitchen, right? Like if you work at a restaurant. That’s kind of like your admin team. They’re doing that behind the scenes work, but enough money has to be getting generated that they are also getting paid.
[00:21:02] Paid, right? And there is sustainability there. So
[00:21:05] Tracey: Yeah. That makes sense.
[00:21:06] Linzy: As I’m thinking about this, Tracey, like there’s numbers here for you to run and play with. Something that I’m curious about is as you’re thinking through this, like, what are you noticing about thinking about like diving into these numbers in a more focused way and seeing what’s happening?
[00:21:21] Tracey: Yeah, I am kind of excited to see, I think, I mean, adding another practitioner would be great. It’s more of like a timing of, you know, we only have so many rooms, so really only one person can be there at a time, but that doesn’t mean we couldn’t have, you know, hours into the evening if we wanted to expand there a little bit. And also, maybe this is different for a therapist, but I feel like 15 percent sounds pretty good. Like, just knowing everything that my office manager does, you know? Like, laundry, insurance billing, you Yeah, for sure. Yes.
[00:22:05] Everything. So that actually, like, to me, I’m like, okay, that makes sense.
[00:22:09] Linzy:Yeah, and with these numbers because like, as we look at this, there’s ranges on what a healthy practice’s numbers look like, right? But generally speaking, your staff is more around 65%, right? You’re at 74 percent right now. Your OpEx could stay about the same, frankly. But it’s like, We look at what tweaks to get you to that place where it’s just like that little bit more breathing room because right now I’m hearing you don’t have breathing room.
[00:22:36] Linzy: There’s nothing left over. In fact, it’s been the opposite where you’re actually losing. So all this money is coming in the door, but it’s actually going out faster than it’s coming in. So I can completely understand why you have this thought of going back to solo practice where it’s simple.
[00:22:51] Because with group practice, what I have found, Tracey, is there’s these sweet spots. There are certain sweet spots where a certain combination of numbers works and it’s not always necessarily more is better, right? Because as you say, if you brought on three more practitioners, you would run out of space.
[00:23:05] Right. Right. You’d have to move into a bigger office. Right now we’re looking at more expenses, and you would probably have to bring on more admin team. So it’s like, as you say, it’s like the revenue goes up, but your expenses would also go up, right? So it’s looking at where you are right now, what are some of the tweaks that you can make to bring up that revenue a little bit or bring down some of your team expenses a little bit, you know, without doing anything kind of drastic?
[00:23:30] Are there some little tweaks you can do there?
[00:23:33] Tracey: I mean, definitely considering, I mean, not with the contracts that are in place now, but if I was to hire another person…
[00:23:40] Linzy: Mm hmm. Yes.
[00:23:41] Tracey: like instead of just making up numbers that I decide I’m going to pay them to actually look at the numbers and maybe go just based on a percentage of what they bring in.
[00:23:52] Linzy: Mm hmm. Yes.
[00:23:54] Tracey: Versus the hourly plus the bonus.
[00:23:56] Linzy: Because sometimes, too, what I notice is like when we have these more complex systems, it’s like we’re really trying hard to be fair. Right? Like you’ve really thought about how to be fair. Like you want to make sure they’re not wasting their time. You want to make sure they’re rewarded for a new client.
[00:24:10] You want to make sure that they’re also paid for everybody they see. So you’ve got this blend of like a base rate, so there’s a bottom that’s safe, but also they’re getting rewarded for working more, which speaks to, you know, you really being thoughtful and trying to really set up a system that takes care of your team.
[00:24:27] But sometimes at the end of the day, a simpler system actually just works better. Right? In terms of even for them.
[00:24:33] Tracey: Yeah.
[00:24:34] Linzy: Because I’m curious for you, what kind of bandwidth is involved in running payroll and keeping track of who’s owed what?
[00:24:42] Tracey: Yeah. I mean, I have a system down now with a spreadsheet and I just go through the Jane schedule and kind of count up the different types of appointments.
[00:24:51] Linzy: Okay.
[00:24:52] Tracey: And it’s not
[00:24:53] too bad.
[00:24:54] Linzy: You’ve got a system. Music to my ears. Yes, yes. So as we’re thinking about this, like what I would be curious as you’re looking at your practitioners is, is there a way for revenue to go up like 10 percent in the practice, right? That would be one place where if you have wiggle that creates that profit, right?
[00:25:12] Is there a place for expenses to come down a little bit? A little bit of wiggle. Is there a spot to add another practitioner? Now adding practitioners also adds more of what we call like, base expenses, right? So when you add somebody, for instance, you’re using Jane, which I love very much. So you are going to have to add another user on Jane, right?
[00:25:32] And like, you’re gonna have to pay for another person on your payroll. So there are expenses that show up as soon as we hire somebody, regardless of how much money we make. And this is why onboarding. can be costly, right? So it’s thinking about this, too. It’s not always necessarily adding a new person that actually tends to be the more expensive option when you already have a team.
[00:25:49] But it’s like, yeah, is there a little bit of wiggle room there, where you can encourage folks to take one more client or you make a new partnership and you maybe change the schedule around a little bit. So there’s room for a couple more clients a week, just starting to be curious as to where there’s a little bit of room because your, your numbers, they are not working now.
[00:26:07] But also they’re not like dumpster fire numbers. You know what I mean? Like they’re close, they’re close to working. So it’s starting to be curious about what are the little things you can do to tip them over to that point where you are now profitable. and right now it’s like, you’re off by, basically you’re off by 15%.
[00:26:24] Right. Cause you like, you had like a minus 5 percent over that period of time. We want to see a plus 10%. So you just need to be 15 percent more efficient.
[00:26:33] Tracey: I think kind of going after the patients that owe us
[00:26:38] Linzy: money
[00:26:38] Mm hmm.
[00:26:39] Tracey: more aggressively. I struggle with that a lot. And then I think maybe looking into I mean, I have a bookkeeper and I’m honestly really not totally sure what she does that I pay 355 a month for.
[00:26:56] Linzy: Great question. Yep. Yeah. Starting to look critically at those things. And I will say for that piece around client payments, like having to chase folks, there’s also maybe some curiosity that you could have there around your systems. Can you keep cards on file?
[00:27:10] Do folks get charged when they arrive at their appointment, Or charged automatically at the end? Like how do you streamline? or is it copays that you’re owed?
[00:27:18] Tracey: Mostly like when we haven’t heard from insurance and they end up owing like fully deductible, and then they are not clients anymore and…
[00:27:27] Linzy: yes, yes. So having a policy for that, like anticipating that, right? Because that’s one of those things where it happens enough times you’re like, Oh, this isn’t a fluke. This is going to happen. So having a policy around having card on file, you know, like figuring out what
[00:27:39] makes sense. Yes. Beautiful. And then you just inform folks, Hey, this is what you were owed. Thank you so much for your service. We are charging a card on file as per our policy. You know, we look forward to seeing you again, like making that a neutral part of your business because those accounts receivable, that money that you’re owed also is going to be part of this picture.
[00:27:55] Right. At this point, it sounds like you can’t really afford to have money out there that’s supposed to be in the business.
[00:28:01] Tracey: Right. Yeah. And I feel like it could be that. I mean, at least 5%.
[00:28:06] Linzy: Yeah. Which puts you to the break even, right? And then there’s just like that 10 percent to find to put you into profitability and have those buffers, extra money starting to build up rather than money disappearing.
[00:28:17] Tracey: Mm hmm. Yes.
[00:28:20] Linzy: So Tracey, this has been quite a zoomed out conversation because there’s like a lot here. What are you taking away from our conversation today? What do you see as your next steps?
[00:28:29] Tracey: Really kind of digging into my numbers, figuring out what makes sense to be paying my employees.And I want to look at where I can increase revenue 10%, cut expenses 10%, 5%, and kind of get to my sweet spot.
[00:28:49] Linzy: Beautiful. Yeah. I think you are much closer than you think you are. And we always have those parts of us that are like, burn it down, run away. But at this point, I don’t think that point, like that part of you has enough evidence to actually do that. I think…
[00:29:03] Tracey: I know, yeah. And I, like, another part of the puzzle is like, I actually, I only am in the office and see clients like one and a quarter days a week so I can be home with my
[00:29:16] kids, so like, that’s really important.
[00:29:20] Linzy: Yes. And that’s all part of the picture, right? And that’s also something that will change as your kids get older. They won’t want to hang out so much. They won’t need you quite as much. But yeah, as you’re thinking about this chapter of your life too, it’s like, yeah, how do you just set up this business so that it’s paying you enough?
[00:29:33] Cause you’re also getting paid in time freedom, right? In time with your kids that you can’t get back, which is also extremely valuable.
[00:29:39] Well, thank you so much, Tracey, for coming on the podcast today.
[00:29:42] Tracey: Thank you.
[00:29:43] My conversation with Tracey reminded me both of the complexity and simplicity of group practice finances. On one hand, all of the different tiny decisions that we make add up to give us this specific result. And there’s so many places that we can make tweaks, right? We can make tweaks in terms of our policies on how many clients our employees need to be seeing to be considered part time or full time, right?
[00:30:16] Linzy: Like, what does a caseload look like? What does full mean? We can make tweaks in terms of how they’re getting paid. As Tracey talked about, she could look at tweaking instead of an hourly base pay with an extra wage on top for every client, she could look at doing a split, right?
[00:30:28] There is all of these places to make changes where a small change can sometimes make a big difference, and this is why we have Money Skills to Group Practice Owners, and a team tool that we have in that that lets you really get into those granular details because sometimes it’s the smallest tweak that suddenly makes your numbers work.
[00:30:45] So on one hand there’s like that complexity and it can feel very opaque, trying to figure out how to fix something in a business that has that many moving parts. On the other hand, there is this simplicity, right? It’s like we look at her numbers from a big picture perspective. We see, yeah, you know, a hundred and a five percent of what it was earned was spent.
[00:31:01] So that’s why there’s this 8, 000 loss. This is why it feels like there’s no money because there’s no money, but we know generally speaking that we want to see, you know, our wages around 65%. So how can you look at bringing that down? Or how do you look at bringing up your revenue enough, so that you hit more of that 65 percent number?
[00:31:17] There’s also these zoomed out views that we can take that let us know where to start, right? So there’s so many places to intervene and I’m excited for Tracey as she digs into her own numbers and spends time with them and starts to see where can some tweaks be made to make up that 15 percent difference and get her to that profitable place where the business will have oxygen and actual money left over.
[00:31:37] If you’re also a group practice owner, and you are feeling overworked and underpaid in your group practice, I do want to mention my free opt in for group practice owners. It’s called, fittingly, How to Stop Feeling Overworked and Underpaid in Your Group Practice. It’s a free guide that empowers group practice owners to feel calm and in control of their finances.
[00:31:56] So if you are a group practice owner who also feels like you’re working harder than ever in your group practice and worrying about money and feeling that weight of paying not only yourself but an entire team, if you’re ready to take action and become the empowered financial leader of your business, then you should check out this free guide.
[00:32:11] I will put the link for it in the show notes. It’s how to stop feeling overworked and underpaid in your group practice. You can follow me on Instagram at Money Nuts and Bolts. And if you’re enjoying the podcast, it’s super helpful if you can tell your colleagues, It could be folks in other professions.
[00:32:25] If you’re a psychotherapist, and you have a great friend who’s an acupuncturist like Tracey is, tell your other folks that you know in the health practitioner fields about the podcast so they can be part of these conversations, too. Thank you so much for listening today.