E423 | 4 Keys To A Cash-Based Practice Turnaround

To date, our company, PT Biz, just cracked 1,000 businesses that we have worked with in some sort of capacity.  I felt this was a great opportunity to talk about the frameworks we see that lead to great turnarounds in cash-based practice.  Enjoy!

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Podcast Transcript

Danny: So I'm probably similar to many of you in the fact that I'm not very good with technology and for years I ran my practice on a platform, a big platform that I had lots of issues with. And never once was I able to get on the phone with somebody to actually help me out with the problem that I was having.

This is one of the main reasons why we decided to switch over to PT everywhere, because when we got. Every time that we've had a problem, I can reach out to their customer service and I'm actually talking to another human being that knows what's going on with my platform that can help solve a problem for me and me, not spin my wheels, trying to figure out all by myself and wasting my entire day.

It's one of the reasons why we love the platform so much. We love the people so much. Started by Cash-based Practice Owner, and really the goal is to help practices, cash-based practices like ours grow scale and be as efficient as we possib. Can be. So if you've been frustrated with lack of customer service of somebody responding to you and helping answer your questions, look no further.

PT Everywhere does an amazing job by helping you be successful with their platform. So head over to pt everywhere.com and check out what they've got going on. So here's the question. How do physical therapists like us who don't wanna see 30 patients a day, who don't want to work home health and have real student loans create a career and life for ourselves that we've always dreamed about?

This is the question, and this podcast is the answer. My name's Danny Mate, and welcome to the PT Entrepreneur Podcast.

What's going on guys? Doc Danny here with the PT Entrepreneur Podcast, and today we're talking about cash-based practice turnaround. So I'm doing this podcast because to date, we just cracked a thousand businesses that we have had a chance to work with in some capacity between the different programs that we have, different courses that we've had in the past, and people that we're actively working with now.

That's a lot of damn businesses. Like, it's insane to me that we've had some sort of effect directly on that number of businesses. I don't know how many it is. You know, if you were to include this podcast, uh, our, our book, uh, the. You know, the, the actual, um, email list, all of that, like, it's significantly more.

But these are, these are a thousand businesses that we've directly had a chance to, uh, to, to work with. Mainly cash-based practices. Some of them are hybrid, um, or, or they're in network practices, are trying to move to a hybrid model. And what I wanna do is share the framework that we see with turnarounds because sad.

The vast majority of people that we work with, it's because they're in a place where they're not doing so great. Right? Um, it's not that common that we see somebody and they're like, yep, you know, I wanna start off on the right foot. I wanna make sure I do everything correctly. And, uh, you know, I want, I want to invest in my, in my business education early on.

Uh, the vast majority of businesses that we get a chance to work with have had to run into a wall a couple times, um, to figure out that it's really not that simple. Well, it's simple and easy or two different things, right? It's not easy, but it is fairly simple in terms of the things you have to be able to do within your business to, to make it work.

So what I'm gonna do is I'm gonna go over sort of the framework that that, that we use and that we see as far as a repeatable process with a fairly large, simple size at this point for what we call like a cash. Turnaround and this is what we end up doing a lot within our Clinical Rainmaker program in particular, sometimes in the Mastermind.

Normally when people come to the Mastermind, they're already at a place where they've got things, you know, that are working on the sales and marketing side, and they've basically kind of. I guess trap themself into a place where they're time poor and they don't know how to actually scale past themself.

Like how to hire, how to build systems out, how to have infrastructure, how to find a facility and not get screwed over, you know, with a sublease or a full-on lease. Um, these are bigger problems that we solve typically within that, within that cohort of people. But, um, in the Rainmaker program, it's, it's typical.

Sales marketing get you, you know, get you to where you're at, five, $10,000 a month in revenue and you don't have to work for somebody else again. Or you can leave that full-time job and just focus solely on your, on your practice. Um, and that's the intent and that's what we wanna do with people. So this framework is really get people, uh, to where they can turn their practice around and get to that point, right to where, to where you can really focus solely on your business.

Um, and you never have to work for someone the rest of your life. So, um, here are the components. So the first one is you have to organize and implement your local marketing. Um, you can. You can't have a local service business and not have some sort of local presence or marketing like, I hate to, I hate to say it that way, or like, like it should be, it should be obvious.

If you think about it, it should be obvious that if you wanna have a local service business, that there's some element of local relationships that are gonna drive that. Right. And I think that what what's happened is there's a lot of marketing out there about. Digital marketing and how effective it can be, which it totally can be.

But in a local service business, the one thing that has worked for who knows how many thousands of years is local marketing, relationship marketing, referral marketing, where you are developing rapport and relationships with other people in your area, and no amount of algorithmic changes to Facebook or Google will ever change that ever.

It's, I mean, as far as I can see, until we're in some sort of virtual reality world, I guess, uh, but as of right now, it is a core tenant of a local service business and what we see is a lot of effort and very little organization of local marketing. People are like, just kind of like going all over the place, trying to meet as many people as they can, versus getting very clear on who are the right people to develop relationships and following up and continuing to foster those relationships versus a shotgun approach where you just are going out and just like running around trying to meet everybody under the sun and not actually.

Developing any sort of depth of relationship with people. So number one, you have to organize and implement your local marketing by defining who the right people are for you to develop relationships with, and then get after it and give it some time. It doesn't happen overnight. You can't turn the oven up to 700 and bake the cake twice as fast.

You can't make somebody like you. Faster. In fact, if you try to make somebody like you faster, that's the easiest way to get them to not like you. So local marketing is something you have to have patience with and clarity about who you are actually trying to develop relationships with. So that's number one.

You have to organize and implement your local marketing. Number two, you have to price yourself correctly. I did a podcast about this with a wine example in terms of two different bottles of wine in a Stanford business school study where they looked at a $5 bottle of wine versus a $45 bottle of wine.

Uh, they had blind taste testing. The group unanimously said that the $45 bottle of wine was better in all categories, and you know, Ultimately it was the same wine. It was just in a different bottle, right? So wine was the same. The $5 wine was then put into the $45 bottle. It was the same wine. So price is very correlated to the perception of quality.

Keep that in mind because if you are under, if you're underpricing yourself, you are screwing yourself. Because people don't view that as, oh, what a bargain. I wanna go work with that person. They view it as they must not be as. If you're charging $120 a visit and I'm charging 250, just visually, who do you think that person thinks is better?

It's definitely gonna be the higher priced person as shown by this wine study as shown by so many different examples of price perception. Now, if you price yourself correctly, it's going to make you look. It's going to make you have to fulfill more and have a better service. You're going to in innately do that, but it also gives you the margins to be able to reinvest in the business in a way that is an unfair advantage versus somebody that is running super thin margins and they cannot reinvest in, you know, any sort of local marketing, content marketing in any sort of infrastructure and or people assets within the business.

Even to help with the running of the actual day-to-day of the business, you have to price yourself effectively. You have to sell packages from what we've seen now, look, the, you don't, there's examples of this where it doesn't necessarily have to happen, and, and that's fine. Like I, I, I think the model is great no matter what in a cash, uh, setting.

From what we've seen, the vast majority of businesses do better with a package model than they do with a per visit model. I'll give you a couple reasons why. Because until somebody disproves this and proves me wrong and I'm, I actually didn't use packages for years and I regret it because it changed our business when we did, until somebody proves me wrong, I'll change the, I'll change what we teach, but as of right now, we haven't seen any data to back up the fact that is a better model to go procession than it is for a package.

As far as cash flow goes, as far as predictability in the business and referrals, because when you sell a package, A couple things happened. Number one, that person is ultimately committing to solving their problem. And the data that we have across our entire mastermind, our business for the last seven years is when somebody doesn't do a package, the average visit rate is just under two and a half visits.

Why? Because symptomatically, most people at About Visit two are feeling a lot better if you're a decent manual therapist and you are diagnosing them correctly. So at Visit two, they're like, oh my gosh, I feel so much better. I'm gonna go ahead and cancel this next couple, these next couple sessions. Well, what happens, you don't actually get to solve the root cause of the problem.

You just solve the symptoms. And when those symptoms come back, they think you're not as good as you actually are because you didn't actually have the time to get them to where they're trying to go. But when they commit to you with a package, you ultimately can build out their entire plan of care. And they are pot committed.

They have skin in the game, and if they don't want to come in, then they're just outta a lot of money. So most people. Hate money and don't like wasting it. So they're going to finish their plan of care. Now, that leads to another really important factor when it comes with this. The better outcomes you get for people because you are pinning them down with a package, the more likely it is that they actually refer their friends and family to you.

How funny is that? Like it's, you think that. By you, you know, getting them better in a couple visits. The perception of that at least, is that they're gonna tell everybody about it. Well, no, because you didn't actually get them better. You get them to feel better for a short period of time, and they don't really wanna tell anybody about that because they don't really want their friend or their family member to go feel better for a short period of time.

But if you're a problem solver and you actually solve problems long term, they will tell so many more people about your business and the best marketing, the best new patient is a word of. Referred patient from a pi, a prior client that has, they're just bought in, they're super bought in, the cell is very easy.

They have trust in you, their compliant as hell, and you're gonna get them a better outcome. So if you don't know how to sell on the front end between a thousand and $3,000 sometimes. That is a skill you have to acquire. And that's a skill that we work on with every single person that we get a chance to work within our Rainmaker program.

And it's amazing to see what happens to their business. You're talking businesses that go from $2,000 a month to 10, you know, within, within a couple months, and, and now they're in a completely different ballpark because they have a new skill that they've acquired that's gonna drive a lot of other elements of their business.

So you have to learn how to sell packages. Not only does it help with the cash flow, but it's actually gonna help you get more new people in the door, which is just, it feeds itself. The ra. The last thing is you have to be able to move people to some sort of continuity offer. You have to give them a reason to stick around because it, let's say you sell, the average person sells or goes into a thousand dollars package with you, package of visits, right?

To solve a problem. So they're, they're essentially worth a thousand dollars to your business if you can add on a continuity. Onto that. Maybe that's them coming back on a semi-regular basis. Maybe that's a digital, you know, coaching option. Um, maybe that's nutrition work with them. Maybe that it just depends on what you do or what your clientele wants.

Um, you know, maybe that's training with you or a small group, you know, training with you or something to that effect. There's a lot of different options. You have but's really based off your clientele and what they want and what helps them continue to solve a problem or to get closer to the goal that they.

So continuity. What that does is it takes the same person, and let's say you can go from that thousand dollars, uh, value on the front end, and you add another thousand dollars with your continuity. Now you have that one person is worth twice as much to your business as well as you're helping them get closer to achieving whatever goals that they have by, it's not like you're forcing them to do something, you're, you're offering them something of value.

In most cases, they're probably gonna go do some somewhere else, whether that's with you or not. Now that's doubling the value of that client to your business. So if we do simple math on this, right? So let's say you go from, let's say you're getting 10 new people a month. Each one of them on average is a thousand dollars.

Your business is essentially making $10,000 a month. By having a solid continuity offer on the backend, if you can bring that to $2,000 per client is the average that you're at, you've basically doubled your business without have having to double the number of new people you're getting through the door, which is frankly one of the hardest things to do.

Uh, and I would rather double. The value of a client versus double the number of new clients any day because it's gonna be much easier, much more predictable on the business, and the margins are a lot better. You've already acquired that person. You don't have to spend all time, energy, money to get them in the door, so you have to move them onto something and defining what that continuity offer is, that's the tricky part.

And how to sell that is tricky because you can't sell it like you sell a package. It has to be, it has to be a slower, longer process. It has to be something that, that you, you do from the very beginning. And it has to be something that truly solves a problem for your client. And if you can get those things straight, if you can get these four things knocked out, organizing and implementing your local marketing, cor correctly, price yourself sell packages.

And our metric is really, we want 70%, um, package rate with people that we work with. Because honestly, a lot of, not necessarily a lot of people, but. You know, let's say 20% of people that come through your door, they're not gonna be appropriate for it anyway. They may have something acute, you know, it may be something really simple.

They don't need to go into a six visit package or a 10 visit package, or a 20 visit package. Or they're like, you don't need to do that with somebody you know, that has a grade one ankle sprain. And you might see them one time. Uh, you know, so you have to be ethical about these things too. It's not like we're just trying to sell everybody into the most profitable thing for us.

Like there's a fine line between, you know, what's best for the business and what's best for, for your clients. And you have to pick what's best for your clients. And understand that your business has to be successful for you to be able to work with them. So, so you, you have to understand what those are.

But selling packages and continuity are two different sales skills that you have to be able to implement in your business and master those. Because if you do, then you can then teach them to the next people that you bring in to your company, which allows you to help a hell of a lot more people. Like.

That's the thing we have to keep in mind when we turn these businesses around. It's not just about that person going from you. Whatever, five grand a month to 15 a month. Like, that's great. And that's awesome that we can help somebody, you know, get towards financial independence and, and, and grow a business that ultimately can create jobs for other people within our industry.

But more than anything, you're helping people in your community achieve physical, you know, health and wellness goals that they have. And there's so much personal reward that comes with that that has nothing to do with. It's, it's, it's one of the best parts. It's one of the reasons why, you know, I, I just, I don't find interest in businesses.

There's that, there's no like personal connection. I have a friend that buys a bunch of laundromats and they're super profitable, and he buys all these laundromats and then he hires somebody in the region to do it, and he just travels around in an rv and he's never even been to these businesses, but it fu it feeds his life.

And to me, I'm like, God sounds miserable. I don't want anything to do with that. I wanna be able to help people. I wanna be able to see it in action. I want, I want the, the personal reward from that. And when you get a chance to make, have a business that helps support people's goals. And them actually achieve what they wanna do on a health and wellness basis.

Your business is gonna be better off. Number one, you're gonna make more money because you're truly helping people and solving problems, which is very rare and it's very, very valuable. And the other thing is you're gonna feel great about it the whole time. And I, I think that is, It's, it's definitely one of the best parts to these, to these types of businesses.

And if you don't know what I'm talking about, if you haven't experienced that, if you haven't ever worked in a setting where somebody is, it's a very simple contract between you and them. Like, I pay you this much. You help me achieve this goal. You know, this is what I'm worth. Very simple. You have total buy-in from these people.

You get a chance to have these deep relationships that you develop like. I hope you get to experience that one day because I think it is one of the most, like amazing things I've had to, uh, I've been able to do in the profession is, is really be able to work with these highly motivated people and be a part of the transition, the transformation that they have within.

Their life. Right? And, and I'm not sure what that's worth, but it's worth a hell of a lot more than whatever money we make off of these businesses. And we need these businesses to be healthy and thrive, uh, along the way. And it's great to make money, but it's just as great to be able to help people, um, you know, with the skillset that we have.

So those are the four things. Organize and implement local marketing, price yourself correctly, sell packages, and then have a solid continuity offer that you can sell effectively to move people onto solving long-term problems and increasing lifetime value of those clients. And if you do those four things, you'll turn that business around, turn that cash-based practice around, get to a point where you are just as busy as you can be, and then you need to hire.

Hey, real quick before you go, I just wanna say thank you so much for listening to this podcast, and I would love it if you got involved in the conversation. So this is a one way channel. I'd love to hear back from you. I'd love to get you into the group that we have formed on Facebook. Our PT Entrepreneurs Facebook group has about 4,000 clinicians in there that are literally changing the face.

Profession. I'd love for you to join the conversation, get connected with other clinicians all over the country. I do live trainings in there with Eve Gigi every single week, and we share resources that we don't share anywhere else outside of that group.

So if you're serious about being a PT entrepreneur, a clinical rainmaker, head to that group. Get signed up. Go to facebook.com/groups/ptentrepreneur, or go to Facebook and just search for PT Entrepreneur. And we're gonna be the only group that pops up under that.