E748 | Double Your Cash-Based Clinic With These Small Changes In 2024

In this episode of the PT Entrepreneur Podcast, Dr. Danny introduces a transformative YouTube training series that focuses on a compelling case study—how targeted tweaks in just four key areas can effectively double a physical therapy clinic's revenue. This episode is perfect for clinic owners seeking to enhance their practice without the overwhelm of overhauling their entire business strategy.

Key Takeaways:

1. The Power of Podcasts and Visual Learning: Dr. Danny emphasizes the unique strengths of audio content and video demonstrations. While podcasts offer a convenient way to absorb information on the go, the YouTube video provides essential visual insights into the mathematical aspects of revenue growth, ensuring a deeper understanding of the concepts discussed.

2. Focus on What Matters: Rather than spreading efforts thin across numerous changes, Dr. Danny advocates for a concentrated approach—focusing on just four impactful areas. Drawing parallels with personal health habits, he illustrates that significant improvements can be achieved by honing in on a few essential practices rather than attempting to change everything concurrently.

3. Building Momentum with Keystone Habits: The episode discusses how small, incremental changes can lead to the establishment of keystone habits that drive continuous progress. By prioritizing high-impact areas, clinic owners can cultivate confidence and momentum, setting the stage for sustained growth.

4. The Four Key Areas: While the episode doesn't dive deeply into specific metrics, Dr. Danny teases the four critical areas that every physical therapy practice should scrutinize and optimize. Although these metrics may vary by clinic, the principles behind them are universally applicable and can lead to significant revenue increases.

5. Encouragement to Engage: Dr. Danny wraps up by inviting listeners to check out the accompanying video for a more comprehensive understanding of the calculations involved. He assures that while the podcast offers a valuable overview, the visual format enriches the learning experience considerably.

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Podcast Transcript

Hey, real quick, if you're serious about starting or growing your cash based practice, I want to formally invite you to go to Facebook and join our PT entrepreneurs Facebook group. This is a group of over 6, 000 providers all over the country. And it's a pretty amazing place to start to get involved in the conversation.

Hope to see you there soon. Hey, are you a physical therapist looking to leverage your skill set in a way that helps you create time and financial freedom for yourself and your family? If so, you're in the right spot. My name is Danny Matei, and over the last 15 years, I've done pretty much everything you can in the profession.

I've been a staff PT. I've been an active duty military officer physical therapist. I've started my own cash practice. I've sold that cash practice. And today my company physical therapy business helped over a thousand clinicians start growing scale their own cash practices So if this sounds like something you want to do listen up because i'm here to help you

Hey, dr. Danny here with the pt entrepreneur podcast and i'm putting this intro together to let you know This is another one of our youtube training series Videos, if you wanna watch the actual video of this, there's some actual like math that I get into, which is tough, obviously on a podcast sometimes to do some minor calculations, but it's a basic math about your clinic revenue.

Head to YouTube, go to PT biz and check out the YouTube channel. We're trying to grow a educational channel to really share the ins and outs of how to effectively start and grow a cash-based practice. What I love about podcasts is you can listen to it anywhere. And I like to listen to those more than anything, if I'm walking, cutting the grass, whatever, it's so digestible.

But if you want to listen to this and then watch the video, this is a really interesting case study that I take you through, which is really looking at two different clinics and how you can make small changes in four key areas and how. That can double your revenue in your business. And the key to that, and think about this is if you can double your revenue by focusing just on four areas, that's it.

Think, forget all the rest of the noise. Forget the rest of the inputs, the things that are out there, right? Like just focus on these four key areas. This is where we see massive traction that people gain momentum. They gain in their practice that allows them to go from, just making it barely making it.

With their by themself in a single practice to get you the point where they are Maxed out and then ready to hire if that's what they want to do And that's what we want. We want you to say. All right I'm going to focus on making small changes in a few key areas and look at the compounding effect of that over time Makes a massive change.

It's honestly no difference than your actual like physical health, right? If you said okay, i'm just going to work on improving my protein intake on a daily basis walking 10 000 steps a day You And lifting weights three days a week. These are the three things that I'm going to do because I know that those are going to make a dramatic change in my physical capability, right?

It doesn't have to be okay. I'm going to do a, strict paleo diet for 60 days. I'm going to run, however many miles a month, I'm going to do a CrossFit workout five days a week. I'm going to meditate. I'm going to do, take all these supplements. If you do all these things at one time, the likelihood that you stick to it Versus if you can give people just a handful of things to really focus on a small amount, three to four max, all of a sudden they feel like they're confident that they can do that and the momentum they gained from those little changes compounds a lot.

And that starts to develop really important keystone health habits. The same thing happens in business. So this is for many of you going to be a very important. Video, a very important just podcast that you can listen to and start to look at your own business and apply to, to the numbers you're going to have to figure out on your own in terms of how you're doing in these areas.

That's the key. These are the areas you want me to focus. You got to figure out how your business is doing in the first place and what you actually need to improve, but it's probably going to be one of these, if not all of these four areas. So hope you like this, hope you get a chance to watch the video if that makes sense for you as well.

And thanks so much for listening. What if I told you could double your practice revenue? by making small changes in four key areas. This is the approach that we take with the practice that we look at and work with on a consulting basis and education basis. And the goal of this really is to understand the constraints of your practice and how we can apply small changes in a few key areas.

This is what we consider the bottleneck strategy. So if you were to think of bottlenecks in a river where things are going to get jammed up, right? If we can start to increase the flow of that, increase the throughput of that. In a few key areas, we can dramatically increase the overall improvement in the flow of that water.

And in our business, the flow of water really is energy and energy is money, right? So for us, money is revenue. And that's how we track that. And when we look at key areas of focus within cash based practices, there's four primary ones I'm gonna talk to you about today that are going to really help simplify what you should be focusing on.

And so you don't feel quite as scattered trying to run and grow your practice. My name is Danny Matei. I'm the founder of Physical Therapy Biz, which is a company that has helped over a thousand. Cash and hybrid based practices all over the country and internationally both start and scale their practices.

The goal for us is to really help entrepreneurs that are clinicians first become great business owners as well as great clinicians. I know what that feels like. None of this comes from my MBA, which I don't have, by the way, I have a DPT, which is right here. It's what I went to school for, so I don't have a traditional business background, but I have run.

Businesses for over a decade. I have started cash practice. I've scaled a cash practice. I've been able to sell the cash practice as well, which is a difficult thing to do to build a business to a point where other people see enough value in it that they would want to buy it. That's not we're going to get into today, but this is the building blocks of that.

If you want to grow a practice that has value, that is run and is predictable. That's the key. And these are the four key areas that you can really simplify your business down to, to focus on how can you improve that throughput, which is revenue. So the four key areas are this. So number one is new patients.

It's the one that everybody. They actually thinks is the biggest constraint, but not always average visits per patient. So how many times are you seeing somebody when they come in? Which is typically going to be based off a plan of care, a price per session. So what are you actually charging per session?

And then the percent of people that are moving over to continuity. So how many people are continuing to work with you on an ongoing basis? And we have a whole nother training on that, which we can link to, but that's going to be a big component of this as well. That's going to be developing recurring revenue on the.

back end of new people coming in. So there's the front end of the business, which is really these key things we talked about. So new patients, average number of sessions, and then price per session, that's going to dictate your front end revenue. Your back end revenue is how many people are sticking around to work with you ongoing, which does snowball and make a big difference, but the front end revenue is still quite important.

So in this scenario, we're going to take clinic number one. All right. And we're going to say this clinic is generating 10 new patients per month. And let's just say this is an individual operator single individual. That's growing their practice and trying to get to the point where they can hire.

Most people in order to get to the point where they're going to hire need to be somewhere between 15 and 20, 000 in revenue, depending on their market. Could be a little bit more could be a little bit less, but probably not less than 15. So you definitely need to be at a certain size and have enough revenue to be able to bring somebody else on.

We typically want people to be closer to 20, 000 in order to do that. So this would be a case where we should be able to get there. So let's say clinic number one is bringing in 10 10 new patients, right? And their average. Number of sessions that somebody's seeing them is five. They're charging 165 a session and 10 percent of people or one out of 10 are sticking around to work with them ongoing.

You can actually have no structured continuity offer whatsoever and you're probably going to get one out of 10 people that are just going to keep coming back because they like what you do. Or they're training really hard and they want to make sure they're proactive. You're going to get these sort of outliers that just want to do that naturally.

So one out of 10 is benchmarked. are at roughly 10 percent of their practices, this reoccurring side. So let's just say that's where this practice is at. All right. So if we do some rough math on this and we say, what's this gross revenue going to be? It's going to be 10 new patients times five visits per patient, which is going to equal 50 visits that you're generating every day.

In that month at an average visit rate of 165, it's going to give us 8, 250 in front end revenue for the month. Okay, so just over 8, 000 off of 10 new patients that are seeing you five times on average with an average visit rate of 165 per session. Now, if we look at continuity. And let's say one of those people moves over to seeing you just once a month.

Let's say that's the, stick rate of how often somebody's coming in. They're just coming in once a month. Then in 12 months, if you do this for a year, you're going to have one person per month times 12 months, that's going to equal 12 actual visits on the schedule after a year, assuming nobody drops off in this scenario.

times the rate that you're charging, which is 165, which gives you 1, 980 in recurring revenue. All right, so that's the revenue that this clinic is going to generate. We'll add it up in a second and compare it to the other practice as well, but you have 8, 250 in front end revenue and 1, 980 in continuity or reoccurring revenue in this example.

Now, let's assume that we have a 20 percent increase in these numbers and this is going to be a 20 percent increase in everything relatively except for our continuity percentage, which we are basing off of a percentage. Okay. And I'll explain that here in a second. So new patients, 20 percent increase from 10 is going to give us 12.

Our average visits per patient is going to go up to 6 because that's a 20 percent improvement there. So from 5 it goes to 6. Our price per session is going to go up 20%. That's going to go from 165 to 195. This is actually the area that a lot of people feel very sketchy about, by the way, for them to raise their prices to a point where they're close to 200 a session.

They feel very concerned that's going to basically eliminate any new patients that they might get. They're all going to leave because they think it's too much. I can tell you that there are very few markets that doesn't support. Unless you're just an incredibly small town, we're seeing that is The average that a lot of people can maintain or be above in almost every demographic area that we work with.

So just as an example, that's not a made up number. That is what most people are actually charging. And we feel that the average visit rate really should be close to 200 in almost every market, sometimes more than that, if you're in a more expensive market, like a New York city or a San Francisco LA, something like that, where it's a more expensive area, you need to be above that.

But on average, like in Atlanta, which is generally maybe a little bit more expensive than certain markets, but it's still, the cost of living is not incredibly high. That's a price point that is very achievable. And more than that, actually. So that's going to feel like the biggest jump for most people.

And on the continuity side, this is where it's actually going to be the biggest relative change, because we're actually increasing this by. 20 percent from 10 percent to 30%, which is going to be the biggest jump of all of these. But let's be honest, if you have literally no continuity offer, one out of 10 people sticking around, if you have a structured continuity offer, you should be able to get to the point where 30 percent of your practice or three out of 10 people decide, yeah, I want to continue to have a longterm health and wellness relationship with this individual.

And we're talking about one visit a month, by the way, I'm not saying that they're coming in and seeing you every week forever. And there's definitely plenty of people that have clients like that. Yes. This isn't a big jump by, by any means. This is just what we consider a benchmark for people to get to this point.

So if we look at this, you're basically saying, okay, I've increased some, I've improved my marketing in a way where I'm getting two new patients a month, which is, that's not extreme by any means I've gone from maybe not doing as good of a job having people commit to a plan of care to improving that slightly.

I went up from five to six on my average visits per month. I've increased my prices 20 percent from 165 to 198. I now have a structured continuity offer that I have for people that they can stick around to work with me ongoing for. I'm improving how I sell that. And I've gone from one out of 10 people to three out of 10 people are sticking around and working with me ongoing.

All right. So these are relatively small changes in four key areas. And this is just an owner operator, by the way, this doesn't include your staff. They may have to make some of these changes in this example, just a single clinician. So a relatively easy thing to do to just try to improve four areas and really narrow it down.

And that's the key, by the way, if you're trying to improve in business, you can't improve everything at once. You can't just be like, Oh, I've got to improve all these systems in my marketing and my sales. And I got to improve like hiring and branding. I got to redo my logo. And I've got to, now I've got to build this huge Instagram.

Presences. It's no, listen, if you can literally focus on four metrics that you're tracking and you can start to improve those on a monthly basis and over the course of a quarter two quarters, three quarters, four quarters, a whole year, you can double your business in in, in a pretty predictable manner by doing that.

So in this example, the total numbers, let's look at gross revenue for this. We've now gone to 12 new patients and that's six visits per month instead of six visits per patient. I should say. Okay. Instead of five. So 12 new six visits that equals 72 visits that we've generated from those 12 new patients on a monthly basis.

If we multiply that by our average visit rate, which is now going to be one 98, then that gives us 14, 256 that's generated on a gross revenue basis in a month. That's front end revenue. Now if we look at continuity your continuity offer three out of ten people are sticking around and over the course of 12 months That's going to be three people per month times 12 months gives us 36 total visits that we have coming in comparison to 12, where we only had one person per month.

So that's 36 times our average visit rate, which is one 98. It gives us 7, 128. In recurring revenue or back end revenue. And by the way, keep in mind that's revenue that's coming in without you having to go out and find it every single month. It's incredibly important. Not to mention that revenue is valued at a different rate.

If someone looks at your business in terms of the value of it, then front end revenue, it's almost double for the dollar for dollar on the back end. If it is recurring then on the front end, it's just more predictable and people pay for predictable revenue. They pay a premium for that. So if we look at the total of these two clinics.

All right. Remember we did a 10 percent change or a 20 percent change in these four areas, four areas total. If we look at clinic number one is going to generate 10, 230 a month. This is after 12 months, assuming there's no change in, The number of new patients that they get and or what they're charging.

This is clinic one as our sort of baseline where they're starting. If we make these 20 percent changes in four key areas, our revenue in clinic number two jumps to 21, 384. Now this is a massive difference. You've doubled your revenue with no additional people. Really? This is just you. Focusing on a couple of key areas and improving the ability for somebody to stick around as well as improving the front end slightly.

But even if you look at just the front end revenue, if you just look at just improving your marketing, your average visits per set per patient, and then your average visit rate, that's going to take you from about 8, 000 to 14, 000 in revenue right there. That's it. That's assuming that you, even if you did nothing on the backend, but if you can just improve continuity as well, it puts you at a place where you've Literally doubled your revenue in the course of a year by just focusing on four things.

This isn't an astronomical amount of work. This is a very narrow focused amount of work. This puts you in the place. Keep in mind if you're trying to grow past yourself, you're stuck here at 10, 000 a month. Clinic one. If you're here, you're at 10 K a month clinic and clinic one, you cannot hire somebody else.

You, you can't make it work off of those numbers because you still got to pay overhead taxes. Like that you're taking home, maybe pre tax let's call it 8, 000. If you're really efficient and you're running at 80 percent net, if just by yourself, and you're fulfilling everything. If you have the second clinics revenue, you're making a lot more than that.

And you're saving cash reserves in preparation to hire somebody. So this gives you the opportunity to then jump into a business where you actually have other people helping fulfill on services, which we consider a true business, a business that has revenue when you're not the one fulfilling it a business that generates revenue.

If you're on vacation, if you get hurt if you. Just want to dial back some of your patient volume because you want to focus on other things in the business or outside of the business. This gives you the opportunity to have non passive revenue or non active revenue within the business and continue to grow from there.

So these numbers will scale dramatically, by the way, if we push it out another year, cause you have to keep in mind that recurring snowball revenue from the continuity side. Is going to continue to grow as well. Meaning you need less new patient volume in order to grow that second staff member schedule.

So as we look at this, the keys to remember are this don't try to fix everything at once, try to fix a few key areas that we can dial in as bottlenecks. And it may honestly, for you, not even be all of these. You may say, I feel like I'm doing pretty good on new patients. So you come over here and you're like, Hey man, I'm getting like, I'm getting 12 people already.

Awesome. But I'm seeing each of those people four times. So my average visit rate, not great. All right. So I focus on average visit rate, my price per session. Let's say it's one 65, it's low. We're going to bring it up to one 95. And then let's say three out of 10 people are sticking around to work with you.

So continuity, cool. We don't have to work on that. Now you only have to work on two, two things, two things to your practice. That's it. And now you can focus. on learning those skills, on implementing those skills, and on tracking those skills. But the key is, you have to know your numbers, you have to track your numbers, then you have to implement a plan that improves those numbers.

And guys, listen, for God's sakes, you're a physical therapist, or clinician of some sort, you've gone through some advanced education. This is no different than working with a patient to make a long term change. Do you, if you have someone that comes in as an ACL repair, do you just like wing it? Do you not track anything?

Do you not test anything? And you just say, you know what? You look like you're ready to go back and play soccer. Good luck. Have an awesome season. That would be a, you'd be a awful clinician if that's what you did. If that's what you did, you're putting that person at, In risk of getting hurt again, because you're not actually testing them on return to sport measures that we know are benchmarked.

They exist for a reason, because it helps us get athletes back to sports without having re tears. The only thing worse than an ACL tear is re tearing your ACL. That sucks. So we use very specific data driven metrics to make sure that we're tracking as we're improving people's movement patterns, as we're improving their strength, their mobility, and their capacity to perform in their sport longterm.

It's the same freaking thing for your business. But yet I talk to business owners all the time and they just wing it. They're amazing in one area. They track everything. They're so objective about it. And yet on the business side, they completely wing it. And you got to realize you already have this skill set.

You have this clinical skill set that you just got to draw over the parallels to the business side for you to realize if you really want to make a massive change, you really, all you have to do is just tweak your knowledge base a little bit and apply it on something else that is frankly very important for you to learn.

This is how you're going to provide for your family. This is how you're going to create jobs for other people. This is how you're going to help a lot of people in your community. It's really important for you to just take some time to improve your business skillset and look at it just as a transition of the knowledge base that you already have in one area over into the business realm.

And that's all it takes. You already have it. So you just need to know what to track and hopefully this helps you understand that. So again, the four key areas that we tend to see be big bottlenecks for people that if we can make small changes, we can literally double their revenue is new patients.

How many people are coming in that are new, the number of sessions that people are seeing you for on average, the price per session that they're paying, and then how many of those people are sticking around and continue to work with you on going. So I hope this helps you. I know running a business is a challenging thing.

It is something that is very stressful. If you feel like you don't know exactly what's going on. Our goal is to educate clinicians so that you can become better business owners, not just great clinicians, so you can effectively help more and more people. We know the impact that your profession makes.

We know the impact that your profession makes on the people in your community, on the people around them, and the generational health changes that you're able to help them attain by getting them out of pain, back to activities they love, doing the things they love doing with those people, whatever those are, wherever those are.

It doesn't matter you're making their life better longterm, which is amazing. And that's why I love so much about these businesses. It's an impact driven business that can really help you use your skillset in a slightly different way, increase your time, freedom, your financial freedom, and provide amazing jobs for people in our profession that are honestly getting burnt out by high volume clinics, left and right.

Like we see that all the time. So with PT biz, my goal is to do this. If you want help structured help on your business, the next step would be jump on a call with our team. And I promise you it will be the best hour you've ever spent getting a hard look at your business. The goal for us is to really dial in what areas are you deficient?

We benchmark you against all of the clinics that we work with, which is hundreds at this point within the U S that means we have very clear data about what makes a successful practice and what Isn't successful in terms of where you need to be with these KPIs or key performance indicators that we track on a regular basis in the business.

I think of it like, if you do a blood panel for yourself or for a patient and you're looking at biomarkers to see if they are healthy internally, this is a biomarker assessment, essentially for your business that we want to take you through and get a very clear idea. Of what you're deficient at, what you're doing great at, what you need to focus on and what those skills might be.

That's it. And if it makes sense that you want us to help you implement it, cool. We can talk about that. And if it doesn't, then awesome. You have great information and it's going to really help your practice in a significant way. And by the way, it's totally free. This is something that people would pay for just to get an idea of what's going on, but we want to be able to show that we can help you before we even have a conversation about how we may be able to do that.

So if you're interested, click link below. Sign up for a discovery call with one of our advisors who at this point have talked to hundreds and hundreds of clinicians all over the country. Get a really close look at what's going on in your business. Get a, get an honest assessment of what you're doing well and what you need to improve.

And really start to chip away at the right things in your business and stop wasting your time, just spinning your wheels, trying to figure everything out at once. Hope you enjoy this. Thanks so much for watching. I'll catch you in the next video.

Hey Peach entrepreneurs, we have big, exciting news. A new program that we just came out with is called, It is our PT biz part time to full time five day challenge. Over the course of five days, we get you crystal clear on exactly how much money you need to replace by getting you ultra clear on how much you're actually spending.

We get you crystal clear on the number of people you're going to see and the average visit rate you're going to need to have in order to replace your income to be able to go full time. We go through three different strategies you can take to go from part time to full time. You can pick the one that's the best for you based on your current situation.

Then we share with you the sales and marketing systems that we use within our mastermind that you need to have as well. If you want to go full time in your own practice. And then finally, we help you create a one page business plan. That's right. Not these 15 day business plans. You want to take the small business association, a one day business plan.

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It's totally free. It's something I think is going to help you tremendously. As long as you're willing to do the work, if you're doing the work, you're getting the benefits. Information put down and getting yourself ready to take action in a very organized way. You will have success, which is what we want.

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