E482 | The Future of Performance Based Clinics

Today, I am talking about how I see the future of our profession based on the past 8 years of owning my own practice. We work with over 150 businesses and this allows us to better see the evolution that is taking place within cash-based practices. There are certain trends taking place and today I wanted to share what some of them are. Enjoy!

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Podcast Transcript

Danny: So one of the best ways to improve your customer experience, which we know will dramatically improve your business, is to have clear lines of communication with your clients. And that's something that can be really hard with these multiple channels between email and text. And what you really need is to centralize that in one place.

And that's something that we've been able to do as we switched over to PT everywhere within our client's accounts. We can actually message right back and forth with them. They can manage their home exercise plan within there, and it allows us to really compartmentalize the communi. That we have with those clients, instead of losing an email in the inbox or missing a text and then you're, it's very hard to dig yourself outta that hole because they feel like you're not very responsive, with them.

And for us, it's made a really big difference. It helps make our staff more efficient. It helps us not miss things as much with the volume of people that we're working with. And it's a really smart way of really compartmentalizing your communication with your clients so it doesn't interfere with the rest of the channels.

You have communication with family and friends and things like that. So I think it'd. Huge for your practice to centralize it the way we have. Head over to pt everywhere.com. Check out what our friends are doing over there. I think it's really cool and I think you really. So here's the question. How do physical therapists like us who don't wanna see 30 patients a day, who don't wanna 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.

Hey, what's going on guys? Doc Danny here with the PT Entrepreneur Podcast, and today we're talking about the future of cash-based clinics. Now, this is based off of eight years of owning cash-based practice, the things that we've seen, the the transitions that have been made within our own business. But more than anything, the evolution that we're seeing happening.

With the about 150 businesses that we work with in our pt biz Mastermind. And this is a group that we work with closely of, multiple six figure businesses to seven figure businesses that are, cash and hybrid based clinics all over the country and some internationally at this point as well.

And just combining information combin. Resources and transitions that are occurring and understanding like trends that are happening, I think is actually a huge advantage that we have. So I wanna share some of this with you just to give you an idea of, where are we going and kinda where are we coming from as well, at least at least where, our office started and where many people start their office and the transition that we're seeing occur.

With businesses faster, and growth happening so much faster. It's pretty amazing. I really, as I think about it how quickly people are growing real, legitimate businesses and by what I mean by that is them not necessarily, producing every dollar with their, their work, their direct work.

And how long it took us to get to that point. People are fast tracking it. They're cutting how long it took us to get to that point, by a third. They're literally, it's in, in three times faster for businesses to get there in some cases than what it took us.

And we started in 2014. You know what I wanna talk about is the first thing that I see I'm seeing and a direction to me that a lot of people are going. Is moving from subleased offices to standalone spaces. I've talked about this. I've done, some individual content pieces specifically on standalone spaces.

I think it's actually an incredibly pivotal transition that people make and being able to do that. Can really catapult a business if done correctly. It can ruin you as well if you try to go about it the wrong way. Cuz you, you do take on quite a bit of additional risk as well as in many cases some debt if you have to get a loan for a build out and equipment.

But, As a way to reinvest in the business, it can be in incredibly beneficial and help you grow five x where you're at in a standalone or in a sub lease space. So this transition of people moving from sub lease space to standalone spaces is happening, but not only is it happening, it's happening much faster.

We have many businesses that we work with now that are moving to. Standalone space, within one to two years I would say is the average. I think probably closer to the 12 month timeframe, especially as they started to gain some traction with their their office, which typically starts in a sublease space.

This is a transition that we see, but it still starts in the same place. And the reason why I think a lot of people start in a sublease office where they're renting a space out of typically a gym. Is it's lower risk, it's less scary. It's less overhead. It doesn't cost as much. It's something where you have your target audience there.

So you actually have people around that you can market to directly to help you get your first few people through the door and establish your, word of mouth. Presidents and the fact that you're good at what you do and start to build that up, I think is really helpful and and important.

But there's also a lot of disadvantages. You can't control the space. It can be confusing for people as to like where your office is. The customer experience typically isn't that great especially if you're in. Most, more of a traditional CrossFit style gym where, maybe it's allowed and there's not air conditioning and all these things that you would expect to have in a clinic may not be there.

So the other thing is it's not your business office, right? The someone else is leasing that. And they can change the rules on you whenever, kinda whenever they want. Even if you may have a sublease in place, it's okay, the cost it would take you to get a lawyer involved is probably not gonna be worth it.

And they know that, so they could just kick you out if they want to. So that's what you gotta keep in mind when you're basically building your house in somebody else's foundation, which is one of the reasons why we see a lot of people that are moving to a standalone space. And by that I mean your own four walls, right?

It can. It may be its own building, it may be a strip mall, it may be a retail center. It may be a co-working space where you have a closed off area. It may be a medical office building where you have, your own suite in there, but it's your space and you can control the environment.

You control what it smells like, looks like the music that's playing in there how people feel when you're coming in and out. All that is you own it, it's yours. So that's huge because in order to have a business where you. Not necessarily the person that's generating all the revenue and doing everything.

This is the most proven model that we've seen. Now, you can definitely have subleased offices in multiple locations and do more of a model like that. I do think it's a little more challenging to run because you have people in multiple locations. Communication becomes a bit of a problem. You can ge, you can definitely do it, but I think it's a harder model.

It's a harder model to run. It makes sense for certain people, but not necessarily for for everybody. So I think I see more and more people picking the standalone space over subway space for a number of reasons. Which brings me to the second thing that we're. Which does lead into having, the standalone space and the benefits of it is that people are moving from visits only to offering other services as well.

Recently I did a podcast on recurring revenue and all the different variables or options that you can have within that. And there's many I just went over a few that we're seeing a lot of people adopt, but when you have your let's say a sublease space, you really, for the most part, you can do visit.

And some remote coaching. You could definitely do that. But visits in remote coaching is it. Most people just focus on visits. Visits, visit visits. How many visits are we getting? How many new evaluations are we getting? What? What is that? Cumulatively added up. And then that's your total times, your average visit rate.

So if you have a hundred visits and your average visit rate is $200 a visits, then you're gonna make $20,000 in a month. Now most people will look at that and they're playing the game of just new patient acquisition and kind of, churned through people. They get discharged, and then you're finding new people, right?

So the tradit. Clinic business model, which is, it's a bad business model if you think about it. What if you just, so what if somebody came and got ice cream from you like six times and you told 'em like, all right, you don't need any more ice cream after this, so we're, you go take care of yourself.

Don't, no, no more ice cream don't come back. That would not be great for that ice cream store. They wouldn't do so well. Like they re repeat business is actually really, And organically people will get some of that just with people that are helping, that want to continue to have a relationship with them and work with them.

But what we're seeing with these businesses as they evolve, is the focus changes from just from visits, from people to. Revenue that is also recurring. So how can you have more of a lifetime value approach versus a turn and burn approach? And that's a big shift because that creates a massive upgrade in the business model when we start to have more and more recurring revenue and less of the one-off revenue of people coming.

Problem solved, they're gone. And that's plenty of people. They don't need our help forever. But some people, they love it and some people want to work with somebody like us ongoing, and some people want other services. So with the standalone space what's cool when we see this transition, maybe one of the reasons why we're seeing so many people do this.

As number one, it allows you the opportunity to really scale to multiple providers, which, shoot eight years ago when I thought, when I got started, I didn't actually think I was gonna be able to do it. I thought it was just gonna be me in this office and I was gonna be totally cool with that, right?

It's a better exchange. It's a good trade out for what I was looking at. I'd rather do that than be in a high volume facility, and I'd rather do that. Working with the people that I really liked working with, the population I really liked working with, which is the biggest difference when you get a chance to work with the population you like working with.

With, like the boundaries taken away from insurance in terms of requesting more visits and all this other crap, and, they're compliant because they're paying you to be there. It's such a fun environment to work in. And I, would've been totally happy just to work with people on that.

Never start a podcast, never grow our business, none of that. I just really liked working with certain niche of people that I knew were motivated and that was like all I needed. We just so happened to. Get enough, have enough success where we were able to grow and we wanted to help more people.

And that led to the business growing, right? And us having the opportunity to hire and bring on more people. So that led us to getting a space, a standalone space. We needed more office space, we needed more area, foot square footage for people to to be, working with our providers.

And the sort of benefit to that is, In a lot of ways there's strength in numbers, so if it's just you and you get sick. Yeah. Let's say you get the flu and you're sick for 10 to 14 days and you're pretty. You're not gonna have any revenue for those two weeks.

So that's a dangerous place to be, especially if people are relying on you to be the income generator of your family. Maybe you're a single income family and you have kids a dangerous place to be. There's strength in numbers. When we scale and we grow and we bring other people on it allows us to spread some of that risk out as well.

So when we look at these standalone spaces, it gives us the opportu. To scale and what we see is most people will get a space that's somewhere in the range of, like I said, 1500 to maybe 2000 square feet, and it gives them the opportunity to have three to four providers work out of that space. That's the footprint that we're seeing.

That's efficient. It's not a ton of cost to build out. It's fairly it's fairly cheap as far as a, a physical space goes in comparison to many other types of businesses that maybe you have to have a lot more equipment and a lot more buildout. But still gives you the opportunity to be, mid six figure mid multiple six figure.

Business, gross revenue business if not more, depending on, how you set up your, how you set up your business. So going from focusing on visit only to focusing on these other services is a direction that many of these business are going because they have the physical space to do it, and they're realizing that people are asking them what other things they should be doing.

And I think. The best way to look at it is almost like this health collective is what a lot of people are building this health center, I guess in a way. And some of that might be bringing other professionals. Maybe you have somebody that's doing, nutrition work.

You have somebody that is a trainer or a more of a holistic approach where it's well-rounded. You have other providers, maybe not, maybe you focus on just the people you have, but you have areas where they can come in and train together and they can do work, internally as far as non-injury based work goes and focus more on health wellness related service.

You can host your own events there. This is a big one as well, where you can actually have these little workshops that can be another revenue generator for you. And what we're seeing is these spaces in particular are allowing people to go from visits only where they're constrained by their space to all of a sudden now, They can create this holistic space where they have multiple services.

And in particular I see this as a, just a such a natural fit. I see, wellness training, fitness services being offered. Internally in these spaces making an absolute ton of sense and happening all over the country with the with the businesses that we work with, which in a lot of ways really compliments the business model.

If you think about you have these people coming in, they're buying packages of visits, so it's a lot of cash flow on the front end bigger purchases, but then they have an opportunity to stick around and work on things with you and your staff. That are more wellness, like health related, long term, getting them more fit stronger, more cardiovascularly fit in improving their mobility.

All these things we can do with intelligent training and they can do that in your office with somebody that already knows their back history and can help make. Adaptations and modifications at the time of training on the spot. That's a pretty interesting unique selling proposition when you have a target audience of people that already you've built a lot of trust with and help them with a very specific problem.

So we're starting to see this become a very viable, additional profit center in these businesses, especially as they build to standalone spaces. They have the space to do this and for them to be able to get to the point where they're generating five. 15, 20, 30, 40,000 in recurring revenue. Sometimes even in these facilities, depending on the size in revenue they know is gonna come in every single month, takes a lot of the pressure off of that business owner to be able to pay their payroll, to pay their overhead, all the things you need to do to actually have a business.

So we're seeing this move from visits only to additional services, in particular in standalone spaces because it gives them so many more options to be able to do. So the third thing that I see and the future in which we're starting to see these practices move is going from doing it all yourself to building a team.

Now this is something that. I think it's a really scary step to hire another human being. If you've never done this and even if you have hired another human, another person in a business, it wasn't your business. Big difference when you do it in your business versus somebody else's. And this step is happening faster and faster with the businesses that we work with.

Not only that, but they're growing staffs that are like pretty sizable pretty quickly. When we look at like this for a lot of people the metric of. A true business, like a legitimate business is if it generates over seven figures in revenue a year. I think that number's a bit arbitrary because it's just vanity.

It's a vanity number. I know people that have seven figure businesses that have terrible profit margins. I know people that have 2 million businesses that make a hundred thousand dollars a year. And that's a, that's a very high risk business. There's not a lot of profit there. It's just a bad business model.

And then we have clinicians that make, generate $250,000 in revenue and they bring home $150,000 in revenue, so I'd take that all day, but on paper someone would say, oh, the $2 million business is more impressive. I disagree. I think it really matters what more, what you take home.

But if we're looking at. As this sort of traditional business metric of a million dollars or a seven figure business, it's very possible very possible for these cash and hybrid practices to get to a seven figure business within five years. Like we're seeing this happen within five years of them of them starting.

And that's like a conservative mark. I. We've seen people do it in as short as three or four. But I think conservatively by doing the right things over a five year period, if you really want to focus on growth and grow, that you can definitely grow to the point where you're at a seven figure business in five years.

And that's not something that I thought was possible whenever I started my practice. Not at all. And this is really a limiting belief that I had. I just, it was really based on what people told me, they basically said, alright, we're not gonna be able. You're just gonna have this business where you're seeing all the patients, you're living and dying off your reputation.

I didn't know any reason why to doubt them, so I just assumed that was that was the case. But when I really look at it, they were very wrong and part of it is because they didn't know. What the heck was, what I was doing, or what the scale potential was. But it's changed quite a bit and we're seeing this now, like we have multiple seven figure businesses that are in our mastermind that we work with, many that are, in this range between 500,000 and a million that are just a higher one person away from being at seven figures tons that are between 250,000 and 500,000.

That seems to be the sweet spot for a lot of people where, you know, they. They end up, needing our help really and working with us to really help scale them up to, to build, to get that that business to a place where it's it's growing as big as they want. But, the size difference is important because it takes the business owner away from doing everything themself, which, dress a little bit and their safety in numbers.

But be able to get them into different roles as well. And you might say, all right, I love being a clinician, and that's cool. You. But you might also notice that if you're being, if you're seeing patients two days a week instead of five your, energy level, your desire to work with those people, on those two days, it's skyrockets.

You look forward to it. You're engaged more so you have more energy. You're a better active listener because it allows you to work on that, but then also do the things you need to do in your business to help support the other people that are. In your business, involved in your business.

And that's what it comes down to eventually is the other people. It's supporting other people, mentoring, other people, helping give them opportunities to grow as well, because that's what you do as a business owner. You take on the risk, the burden. And the role to mentor the these people to help them be successful, both clinically, but also personally.

I wish I would've known that no one ever told me oh, you're gonna have to mentor people. And it's not just how much money they make or how they're going to treat people with lower back pain, but like pr, human problems, they develop, like life issues. And that spills into employment as well.

Just think about yourself, if you're ha if you're having problems with your significant others. It's gonna, it's gonna bleed over into your workspace to some degree. You're gonna be somewhat more distracted. Or maybe your personality's a little different. You're a little frustrated or you're not quite as energetic and like that happens in your business.

And you have to be able to have conversations with people about what's going on and tr and listen and try to help them out. It's just, you can't just be a authoritarian boss like you, you have to be aware of these things and it allows you to build the team. And the team allows you to build as much or as little passivity, if that's even a word, I'm not sure, into your.

As you want. I was talking to one of the guys on our team that is a cash-based practice owner, but he's involved as a coach with what we're doing. And, I was like I was telling him like, Hey, we, we wanna be respectful of your time. I don't want to take any additional time up.

And he's dude, I got my, he's I got my practice on autopilot. He's I just show up. And everybody knows what they're doing. They're crushing it. It's, he's it's great. And still obviously we wanna respect his time, but it was cool for him to, Tell me that cuz he has such a locked in business at this point that he feels he really doesn't need to do that much with it or as, just as much as he wants to, I guess is a good way to put it.

For him, clinical is not necessarily what he's interested in doing long term. He has other goals and the business is supporting that, which is cool. So it can absolutely do that. But I see a lot more people going from doing it all themself to, to building a team, which brings me into the last. That I'm seeing a lot more of is people moving from the in intentional lifestyle business.

Like we, we have quite a few people that we've worked with or that we were working with that for years. They just decided they wanted stay small. And we're a lifestyle business. Maybe it was for family purposes, maybe it was just because they just wanted to focus on clinical. And what I think has happened is opportunity has been presented to them that is obvious that they are, that they're taking it they're going after it.

Meaning they have a wait list. They have people that are, beaten down their door to get in and they realize that they know something unique. They know something special that they can share with other providers to help educate them on how to do the same thing and really help more people.

So we're seeing this sort of, Transition from intentional lifestyle businesses to real businesses that make revenue when you're not there. And that's the litmus test, right? We call it the hit by the bus test. If you got hit by a bus tomorrow, would your company still make revenue? Would your family still make money?

Would they have an income? And if the answer is no, then you don't have a business. You have a job or a lifestyle business. You've created this self-employment for yourself as the best way to put it. And that's fine because people can be very happy being self-employed. Tons of contractors do that.

But when we look at safety, especially if you have a family, I think it's important to keep that in mind that you do not have a lot of safety. There's no safety net really, if it's just you. And this happens. This is unfortunate, but this things happen to people. Where they get taken out of the workforce.

Maybe not to the point where they're not around anymore, but maybe in a way where they just, they can't do their job and they're in a place where they can't support their family. So we have seen a ton of people go from this intentional lifestyle business to now wanting to grow a real business and a sellable business.

And keep in mind, You may not wanna sell your business. In fact, the goal should be to build a business that you like so much that you would need an incredibly compelling reason to want to sell it, and really probably never want to sell it because it's such a well-oiled machine. It's such a. Joy to run and the people and the culture to be a part of that.

It's something that, you can do as much or as little with that you want, but ultimately you could sell it if you wanted to. And that's the difference between a business owner that busts their butt and works really hard to grow a business and then just closes it down one day, which is the vast majority of businesses, by the way.

This is what happens. They just close it down or a family member maybe takes it over. But in most cases, they just close it down and they just stop. Versus a business owner that builds a business that then they can sell and they have. In a lot of ways, life securing money, and you could say life changing, but life securing.

It's their ability to not have to worry about money anymore cause they have this bolus of money or they have a buyout over a period of time that's providing passive revenue for them that then they can put into something that's gonna help, create cash flow and support them through the rest of their life.

Which, for a lot of people they struggle with. That's something. So many people struggle with, and this, there's so many unpredictable things that can happen if you're just banking on a 401k or whatever. Just look at what's going on right now with Russia and Ukraine. And that affects markets in a lot of ways and.

The, our own government and plenty of things that could happen over the next long period of time as you're waiting for that 401k to, snowball and grow, versus ownership over something that you control and have a lot more say over what's happening. I feel like it's just a significantly less stressful place to be, and especially knowing if you have an asset that you could sell if you wanted to.

That's just the peace of mind of that is, is just incredible and a lot of. Clients that we work with are building these businesses that they know are sellable entities. They know have value, they know that they can, you. Take time off and still have revenue coming in and still have a team of people that they're building and growing.

That's also a positive thing for the profession. We look at it's almost like we're saving certain clinicians, like if there's performance based clinicians out there that are slowly dying in these high volume clinics, like we wanna save as many of those people as possible and give them cool job opportunities.

In these type of businesses, these performance-based practices where they can just be badass clinicians, like they want to be, and make just as much, if not more as they would working in an environment where they just don't look forward to going to work. That, that's huge. That's just massive and it's really having a great effect on the profession in a lot of ways with not having people that are regretting going to become a c.

And we're needed for sure. But we're able to start to employ more of those people and give them jobs that are great and they're just excited to be a part of a culture that we get to define, which is cool. These are the things that I'm seeing. I think the future of these type of businesses looks like this.

I think it's a standalone space. Between probably 2020 500 square feet I think is a sweet spot that a lot of people will see. I think they're gonna have. Probably four maybe five clinicians in one of those spaces. They're gonna have those clinicians be able to work with people in 45 minute to hour long blocks, probably closer to an hour.

One-on-one, be able to really solve problems, but then also have ongoing services, whether it be training in groups, small groups individual training. It could be sport specific training, but have an actual like Gym environment, if you want to call it that. In conjunction with that, they're gonna have digital resources for people.

They're gonna have holistic resources for people outside of that to really address things like nutrition stress management, sleep, all of that if they wanna do it in-house, but be able to have these holistic centers of. Being an active, healthy person for the population that we work with that are, well over seven figures per location and really fun environments to work in.

That's what I see. I think that's the future of these practices. I think we're gonna start seeing more and more of these develop, grow, pop up, expand. Especially over the next five to 10 years, and I think this is gonna end up being the gold standard for what people look for with musculoskeletal injuries.

They're gonna look for a place like this. They know they're gonna get high quality care, they're gonna get a professional that's familiar with the niche that they're within. And it's gonna be something that, it's gonna start to become more. Mainstream and less people wondering what the heck of cash-based practice is.

I, I see that changing and evolving already. So that's what I see. That's at least my crystal ball. What would be interesting is to look back five to 10 years from now who, I hope I'm still doing this podcast, and I think I will. I think I will be. And And see if I'm right. I think that's the model that we're gonna see.

But who knows? Who knows what can happen. That's what how I feel right now. That's just based on the information that we have. But I hope that you're excited about this because. Too often people in our profession are just, they're just Debbie Downers man. They're always just talking shit about our own profession and all the things that are wrong with it, and you gotta stop listening to those people and start focusing on these other areas.

Granted, they're small in comparison to, high volume clinics and their type of revenue and volume they're doing. But guys, like we can use. Our degrees in a completely different way, in a very unique way that's very satisfying. It provides a great lifestyle for our family, but more than anything, it allows us to really, like ethically work with people the right way on our own terms.

And there's a lot of satisfaction with that. If you're hearing, whatever major body or organization or group, just talk about all the negative things and what the government is doing and all the, reimbursement is getting cut and whatever, all the other things that are going.

It's not happening in my world. My world is expanding. It's growing. These people are having massive success. They're fulfilled, they're happy again with what they're doing. And you gotta just tune out the rest of the stuff and focus on, what you want to accomplish. And if it's in this sort of performance-based model where you're really helping people live an active, healthy pain-free life.

That is an expanding, growing area, and it's exciting to be a part of it. And I hope that you're excited as well, because over the next five to 10 years and who knows how much longer than that, I think we're gonna see massive growth. Over the last five years, we've seen huge growth, exponential growth. Just look around you and see how many.

Businesses like this, there are, what do you think is gonna happen over the next five or 10 years? There's gonna be more and they're gonna, the ones that are really good, are gonna be bigger. And that's the direction it's going. So I hope that I hope you guys like this one. This is just, sharing some insights from what I see.

And I hope I'm right cuz I, I'm really excited about the future of our profession.

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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 of our 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 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.