E738 | The Most Important Business Metric You Need To Track

Mastering Financial Metrics: The Importance of Tracking Your Average Visit Rate

In this episode, Dr. Danny dives into the critical importance of tracking your average visit rate—a key financial metric that every business owner should understand. Drawing from his recent YouTube training, he provides a comprehensive breakdown of this essential topic, offering valuable insights to help you improve your business performance.

Understanding Financial Metrics

Dr. Danny begins by highlighting common financial mistakes that many business owners make, often leading to negative consequences. He stresses the importance of tracking accurate financial metrics to make informed decisions and avoid costly errors.

The Average Visit Rate

A central focus of the episode is the average visit rate—what it is, how to calculate it, and why it's crucial for your business. Dr. Danny explains how this metric can influence various aspects of your business, including revenue and customer retention. He also warns of the dangers of improper tracking, which can lead to significant missteps in your overall financial strategy.

Impact on Compensation Models

Dr. Danny delves into the implications of incorrect calculations within compensation models, noting how these can affect employee trust and morale. He advocates for transparency and accuracy in all financial metrics to maintain a healthy and productive work environment.

Further Learning

For those seeking a more visual understanding, Dr. Danny encourages listeners to check out his corresponding YouTube training, which includes valuable slides that complement the audio content. This additional resource is perfect for those who want to deepen their grasp of the topic.

Audience Engagement

Dr. Danny invites listeners to share their experiences and feedback, asking how tracking the average visit rate has impacted their business. He encourages engagement through social media or comments on his website, fostering a community of learning and growth.

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Podcast Transcript

Danny: 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 skillset 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 and today I wanted to drop an intro for this podcast because it comes off of a youtube training and That I did on the importance of your average visit rate. Now, this will be something that will come out in a couple of weeks, but I wanted to share the audio of it because I think it is a valuable training.

We're starting to do more of these YouTube mini trainings that are roughly about 30 minutes or so. Those will have corresponding sort of charts and I'm going over and actual like visuals that you can see, but we'll have a few of these that I'm going to share as a podcast as well, because I do think that the information is very.

Accurate for what you need to learn and what you need to be tracking. I'm finding as we work with more and more businesses that there's just some simple, basic, like financial mistakes that people are making that are putting them in a really bad business positions. So if you can get a really clear grasp on your financials and hopefully we can narrow it down for you to where it's not quite as complex and you can focus on some very important key performance indicators, some key metrics.

Your business is going to be in a far better place and you can avoid taking some of these steps backwards that we see happen when people are maybe not tracking the right things, or they're making decisions for compensation and things off of the wrong metrics. Cause you don't want to calculate those things wrong.

You don't want to end up with a compensation model that is not. Putting your business in a very good spot because you're frankly, your employees don't care and they trust that you're doing the right thing. So if you come to them and tell them you need to re redo their compensation, it's going to be lower.

They're not gonna be happy about it, obviously. So that's what this one's about. The average visit rate what it is, how you how you get it. Why you need to track it and how it affects all the other things in your business. So look out for these trainings on YouTube. If you want to go back through that with visuals and really study what we're talking about, you should be able to do but for now, enjoy this one.

And I'll talk to you soon. Hey, Danny Matei here, founder of physical therapy biz. And today I want to share with you the most important number you need to be tracking in your cash based or hybrid practice. Honestly this is a number that I constantly have to go back to with people that we work with and it's your average visit rate.

So your average visit rate is essentially the amount of money you're making per session. When you see somebody, so let's say you see people on the hour. So it's a hour long visit and each session, you're generating 200 per session, then that's going to be your average visit rate of 200. Backing into this can be a little bit hard sometimes because if you have.

Compensation or you have packages that are spreading these out. Let's say somebody comes in for 10 visits And it's this compensation amount. It's like this payment per visit or a single visit is this much or even more so if you take insurance and you Think you're getting one thing but you have this big accounts receivable and maybe you're not getting all that back You have to really drill down this number to understand what the total Average visit rate is because it's a very important number and all the rest of your your business metrics really should be based off of this.

And I'm going to show you the difference between different types of practices that could be generating significantly different revenue based on their average visit rate with same amount of work. And again, the reason this is important is because it is it is the lifeblood of the business is the revenue.

It's just that simple. When I had my practice before we sold it, I track this number like a hawk and we want people to look at this on a monthly basis to make sure that they're trending in the right direction, or it's at least maintaining where they want it to be. This is a key financial indicator that we constantly talk about.

And if you're unfamiliar with my company, it's physical therapy business, the company I started while I was still running my cash based practice, mainly because of. A lack of information like this, that was out there. And as I started to learn more and more about practices, I realized that it's not that we it's not that we don't know how to run businesses or we don't have the skills to be able to run a business.

It's that no one's ever really taught us how we should run a business. All we learn is how to treat people's back pain. How to deal with shoulder rotator cuff repairs and i'm a clinician first I went to school to be a physical therapist. I practiced as a physical therapist for 12 years before I stopped seeing patients And this is something that for me Is boots on the ground learn this shit running businesses.

I didn't go to mba school I didn't you didn't I don't have a business degree or anything like that But i'm going to talk to you about finance that is legitimately, like numbers based on real businesses that we work with And data that we see that hopefully will help you really understand how you should be running your business.

And if you feel like this is a bit complex and maybe Oh, I don't want to know about the numbers. Like I get it. I was the same way. I'm not a math guy initially. It's not something that I felt like I was ever very good at. In fact, my honors math class, the one honors class I ever had, I had to drop out of it because I had an F in it.

And my honors math teacher told me I was the worst honor student she's ever had in a pre calculus. So if I can do this. Any of you can do this. I promise. I'm gonna try to make this as simple as I can in real life numbers from practices that we work with and practices that I've owned myself. So bear with me as we go through some math and and just to understand, just keep this in mind.

If you don't have a strong understanding of financials in your business, it's not okay. Let me say that again. Okay. If you do not have a strong understanding of the financials of your business, it's not okay. You can't avoid this. You can't hide from it. If you're the business owner, you have to learn this stuff and you cannot outsource this to a bookkeeper or a CPA that's going to just understand this stuff and care as much of it, care about it as much as you do.

You have to be the CFO for your small business. It's not big enough to hire that out to somebody else. Yeah, and it may never get to that point. Those are big businesses. I have much bigger businesses than the cash practice that we had. And we still do all of our own financial computations and data because it's no, one's going to care as much as you.

Okay. So just understand if you don't care about math, that's okay. If you don't care about numbers, but you probably care about your income. You probably care about taking care of your family. And you probably care about, financially what that can do for you outside of the business, right? So let's get into this scenario of why your average visit rate is the most important thing that you should really keep an eye on.

And I drew out basically the estimated overhead, let's call it A 1 million top line cash based practice in this scenario. And this is a pretty accurate assumption of what we see based on at this point, like we have eight years of consulting with practices over a thousand practices. I'm not making these up.

These numbers are generally what we see. So the data should be pretty accurate to where you're at. And I understand that certain markets are different than others. You're in Manhattan. It's going to be different than if you're in Memphis, Tennessee. Okay. But across the board, this is what we're seeing as far as the average visit rate for people needing to be about 200 per hour average visit rate in order to have a profitable practice.

It's probably going to be higher than that if you are in, San Francisco Bay area, and it's going to be a little bit lower than that. If you are in a rural area a Columbus, Georgia or something like that. But the reality is it's going to be roughly the same. For most people that fall in between that.

Okay. So the first part of this is we're going to assume that there's four clinicians and that those four clinicians are seeing on average about 105 visits each. Okay. So with that being said, like the reason that we're going to be at about 105 visits is because That's where we see people settle in for the most part a full clinician over the course of a year now they'll have certain months they're seeing above that and then some months they're seeing below that but that's when they're going on vacation That's when the holidays are happening things of that nature and they're going to be busier in months like a january or february Where they're not necessarily going on trips as much or there's no holidays And people are back in their routine, right?

So on average we're seeing that a clinician is going to be able to see about 105 visits Give or take a few, with without burning them out as well So we don't want to just crush them with volume This is going to be a lower volume model But a higher cost per session model, to help with some of the burnout that our profession sees So we're assuming four clinicians.

So with that We're going to be four clinicians right here, 105 visits, meaning a total of 420 visits. And I'm going to use the same exact volume model with the second scenario I'm going to talk about. This is going to be a cash visit rate, average rate of 150 a session. And then the next one is going to be at 150.

So this is going to equate to 84, 000 in the the month. And if we average that across the year, it's going to be about 1 million. In the year So a really solid top line revenue business. This is a great size cash practice Many can grow to this size and you need four full time staff clinicians that are seeing 105 visits each for you to hit this run rate of a million dollars a year.

So we're going to look at compensation real quick. So let's say your staff each, your compensation is 8, 000 a month, which is going to be 32, 000 a month. So four times eight gives you your 32, 000. As you can see, this is going to be the biggest chunk of your overhead is always going to be your fulfillment.

This is what happens in service based businesses. It's, it is how you scale through people. So the service revenue or the service amount you have to render for services is going to be high in comparison to many of these other overhead elements. So let's assume you have a admin that costs 5, 000 a month.

Let's say your rent is 5k utilities is a thousand. And by the way, I'm generalizing a lot of these. Some of these are going to be a little bit more. Okay. Some of these are going to be a little bit less. Yes. I know there's intricacies with things like payroll taxes and all that, whatever. But for math purposes, we're making this very simple.

And this is going to be relatively accurate for what we're talking about. Let's say insurance is a thousand dollars a month. Staff benefits is a thousand or a thousand dollars per person. So let's say you pay for healthcare premiums and there's con ed, services that you have in there.

Maybe do some wellness things, all kinds of stuff that like this isn't extreme. A well run practice is going to have a really good compensation plan for their providers and staff in general. And I'm assuming you're going to have about 1, 000 per person which may be a little bit high, but for this estimate, I'd rather be high consulting.

Let's say you've got somebody like myself. And our team helping you out. Let's say that's about 2, 000 a month. Let's say ad spend is about 2, 000 a month Let's say you're doing a cpa and a bookkeeper that's managing everything. Let's say that's about a thousand dollars a month Let's say you're doing local marketing and local marketing your I don't know You're doing some sort of sponsorship for a race you're meeting people and you're buying lunch and coffee Like this is probably pretty high But whatever, we're gonna, I'd rather be high in this scenario.

And let's say you have some sort of loan reimbursement for a buildout loan, or maybe you have equipment that you you bought to fulfill outfit of facility. And that's a thousand dollars a month. Okay. So total, this is going to put us at, excuse me, 57, 000 in overhead a month. So 57, 000 going out. Not, you're not paying yourself anything out of this, by the way.

Every, this is assuming you're not seeing a single patient. This is assuming you're just running the business, which you might want to see patients. And in that scenario, this would actually make it even more profitable. But in this scenario, we're just assuming you're running the business. So 57, 000 in overhead, and then.

You have 27, 000 in net revenue leftover. So this green amount right here, this is your net revenue. This is what you're keeping before taxes, right? This is what you'd have to pay taxes on, but this is your revenue before taxes. So essentially what we considered net. Revenue. All right. That's 32 percent of your your total amount is what you have left for net.

It's just, it's a very healthy number to be at. We see a lot of service businesses that are successful and they scale depending on their size, anywhere between 20 and 40% of net revenue. And some obviously can be more, more profitable than others. It depends on their model. It depends on a lot of factors, but if you can be somewhere between 20 and 40%, that's really pretty good.

And. Some may people, some may calculate this as well as you would take your compensation out of that to have true net. But in this scenario, I'm just going to assume this is you're the owner operator. You're running this business. This is what you're bringing home or what I'd consider owner's discretionary income.

It's what you can pay bills with. It's what you can build wealth with. It's what you can do. in your life outside of the business, right? So 27, 000 a month, which is going to be in the range of 300, 000 a year. Pretty great for a physical therapist running a business that they truly help people with.

Don't forget the personal satisfaction associated with the things you get to do. It's not, you're not just selling trinkets that mean nothing to people. You're truly helping them with musculoskeletal injuries that stop them from doing the stuff they like to do with the people that love to do them with, what's that's worth so much, but we obviously want you to be able to make more money.

income in the business as well. So this is a really healthy position to be. And this is again at an average visit rate of 200 per session. Okay. 200 per session. Now let's look at the same scenario. And remember 57, 000 in overhead, 27, 000 net, 32 percent net profit. Now, let's take the same scenario, but your average visit rate is going to be here at 150 instead of 200.

And this is, and I'm on calls constantly with people that are looking to get help with this stuff. And I hear this number more often than not. Rarely do I hear somebody say they're coming in at 200. More often, I hear them say that they're going to be somewhere around, honestly, 130 to 160 is where most people are at.

So I'm going to, I'm going to be on the sort of the middle side of that, the average of that. I'm going to take 150, even though many people are coming in a lot lower than that. So again, you have four clinicians seeing 105 visits each, which equals 420 visits in the month. You're generating now, instead of your top line revenue being 84, 000, you're generating 63, 000.

In revenue. So keep that in mind because that's going to change a lot. So your run rate is no longer going to be a million, right? So this isn't the case. It's going to be a lot lower than that. It's going to be in the 700, 000 range. But your monthly costs are essentially the same. They're unchanged. So the only thing that would probably have to change here in this scenario is you couldn't pay your staff as well as you are You couldn't have benefits for them the way that you do you'd have to really strip a lot of that stuff down which is going to do a couple things Number one, you're not going to be able to get as highly qualified people You're not going to be able to keep them around as longer as long as you can so you can have more staff turnover The culture is not going to be as good because they're not going to make as much money or have as much support.

You're just going to have a higher turn business If you don't have compensation where it needs to be in this scenario the same as the previous business So let's just leave it the same for this scenario. So everything's the same same staff pay same admin rent utilities insurance benefits consulting ad spend tax prep local marketing and loan reimbursement So Your overhead is still 56 or 57, 000.

So your your revenue that you're actually like, putting out. So the total amount of overhead is going to be 57. You're making 63 in this scenario. And I don't know why it says gross. This should be how much your overhead is. Your gross revenue is 63, 000. Your overhead is 57, 000 and your net is 6, 000.

So that means you're running a business with five employees, one admin and four physical therapists full time. And at the end of the month, you're making 6, 000 a month. You're going to clear 72, 000 in the year. This is every single month for you. And this is a good month, by the way, 420 visits in a cash based practice is a great amount of volume.

So you're going to be at a 10 percent profit margin at 150 average visit rate versus 32 percent at a 200 average visit rate. And the only difference is literally. Your brand your sales process your marketing and the ability for you to actually sell a premium service for what you're worth For what you're worth.

Let's put it in that perspective You're barely in this scenario above what medicare says you're worth like this Is this is barely above what you're going to get for a one on one visit with medicare. So If the government thinks you're worth, slightly less than that, you got to keep in mind, like you're going to have to charge a bit more than that, unless you want to see high volume.

We're not competing against other high volume clinics. So 10 percent profit in this scenario versus 32 percent profit in this scenario, 27, 000 a month. In net revenue versus six, that's 300, 000 a year versus 72, 000 a year for the same amount of risk, the same amount of work, the same amount of overhead.

Everything that you've taken on is the same. The difference is one, you pay your staff more than you pay yourself. The other, you're making a great income for the effort and the risk you put into your business. So when we look at this, the other scenario that I see a lot is that instead of You having four staff clinicians, you have three and you're the fourth.

So that means you're running the business. You're seeing a hundred plus patients a month and you add those two together. You would take the 8, 000 salary that you would have for one of your providers that you would save, right? So you're taking that now. So you have eight K that you're adding to your six K.

And then this is going to put you at 14, 000 a month instead of six. But keep in mind, you're now seeing 105 patients on average, which means 25 to 30 hours of a week is locked up in you with patient care, not including following up with people and. And plan of cares, the correspondence, anything with the patient that you need to do in order to actually fulfill on that, plus run the business, plus market for the business, plus lead your staff, plus understand how to like actually scale everything.

Like it is a ton of work. If you were to do that is unsustainable and it decreases the value of your business. Instead of you doing that to not even get to the same profitability of where you'd be with a better average visit rate Why not get a better sales system in place? Why not get some proven systems that allow you to actually fulfill in a way that Drive great customer experience massive amount of referrals and you can charge a premium Price for the service that you're rendering anyway Which is already probably going to be very similar as far as outcomes are concerned You're just bolting on actual like business infrastructure that's going to allow you to actually charge what you're worth Or maybe you don't even know how to charge what you're worth.

Or maybe you're scared because you're worried you're going to lose all your patients and you don't know how to step up your prices to a point where they need to be without pissing everybody else off, which is a delicate thing to do for sure. So either way, this is your options. You can either stay here and make 6, 000 a month, or you can make 14, 000 a month.

And you can see 105 visits a month on your own and run the business and do all that, which frankly is unsustainable, or you can just charge what you're worth. And you can do in a, in an environment you're probably are in on average, we're seeing that this is basically where people need to be position yourself as a premium service that people are going to want to actually refer their friends to.

And then make 32 percent net and 27, 000 in net profit. And it's not all about the money either. Keep this in mind. This is actually really important for you to keep in mind. This was not what drove me in our practice. I wanted to create the Google of physical therapy practices. I want to create the Google of cash based practices, meaning I have friends who work at Google and then constantly talk about, Their benefits and like the work culture and all this it's like a great place to work Whatever I wanted to create that and you can't do that If you can't pay your people you can't do that If you can't give your people benefits You can't do that If you can't create a culture by doing fun stuff with your company with your people that you're trying to lead and mentor and also Help them live a great life.

They can't buy a house if you can't pay them enough things are more expensive now That's the truth. That's just reality. And if you're not able to meet and exceed where they need to be, like as far as compensation is concerned, that's on you. That means your business is not actually providing for them well, and they're going to go somewhere else.

You're not going to be able to retain some really great people that deserve to make a great income if they're actually really good at what they do. And we want to actually attract and retain killer physical therapists, amazing PTs that are clinical ninjas. That's what we want. And the only way we're going to do that is by having a work environment They want to be a part of and that includes what they're getting paid and their compensation so what happens whenever you actually improve your average visit rate because this is something that it's all it's theory, right?

Obviously there's numbers behind that and you can say okay cool That'd be way better. Would I rather make seventy two thousand dollars or three hundred thousand dollars? Most people would take 300, 000, right? For the same work, the same risk, all that. But what you're forgetting is that there's also like elements of your business that you may not even realize are tied to profit, but also how hands off that business is.

So if we look at something like an enterprise value, this is going to go up. This is basically what your business is worth. I had a conversation the other day with a clinician that was interested in potentially working with us. And one of the things that she said that I thought was interesting was that she didn't feel.

That she was anywhere close to being in a good position to be able to retire one day, individual provider, seeing all of this herself no, no other people involved charging too little as, as well. This scenario closer to the one 50 than the 200, actually under one 50 and seeing a bunch of volume, but all by herself, her business is worth zero.

That's how much zero she might luck out. And somebody might buy her list. If she decides that she wants to, Close up shop one day, but it's still making no money back on all of the risk and investment in the business is zero. There's no enterprise value. No, one's going to buy your job. You've created for yourself.

And if you want to create a job for yourself and that's all you want to do, that's fine, but make sure if you do that, you're taking money that you're making. from the business and you are investing in somewhere outside the business. Otherwise, you're putting yourself in a very sketchy situation for the day that you decide that you want to retire.

And that may never come for you. You may have to work a lot longer than you think, but if you can build a business that has enterprise value, meaning value to someone else that would want to buy that, whether that's a staff member, a strategic acquisition, a a bigger clinic, potentially a private equity investor, somebody that wants to buy a business to own a business, whoever it is, it doesn't matter.

It does scenario can be different. And, for many different people, enterprise value is a real thing in these clinics, if you're hands off. So in scenario number one, you're making, let's call it 300, 000 a year. Now let's say in order for somebody to run that business, they'd have to pay somebody 500, 000.

100, 000. Okay. So let's say you have an operator they bring in or you bump up a staff clinician and maybe it's not even that much, maybe it's 50, 000 more in compensation to other people where they can run the business. So let's take 50, 000 away from that. So instead of 300 in compensation, let's say now we have truly 250 K in actual true net profitability.

Meaning when an investor is going to look at if they're interested in buying your business, 250, 000. is where you're at. Currently, we're seeing these businesses are going to trade at anywhere between three and five X net. Okay. Of this number right here, three to five X. You're talking about a million dollar sale of a business that you have in this scenario, a million dollars.

in enterprise value you've created by creating a business that doesn't require you to fulfill it that has good profit margins. In fact, these profit margins probably trade at the highest end of that. So let's call it a million plus for something that maybe you want to not do forever. Maybe you do want to sell that business.

Maybe you'd want to sell it internally and you want to be able to have an exit that's owner financed. If that's what you want to do, it could be to a small business. Loan a partner of somebody that's looking to buy it. Many different things. Either way, you have a million dollars of enterprise value.

You've created same amount of work, same amount of risk, and you've created zero, zero enterprise value for this. Now, you might get somebody that would be willing to buy this for, a very low multiple of this. Let's say you're making $70,000 a year in net. They might give you a two x for that.

Maybe you're at a hundred thousand, $150,000. In what you could sell that for but why would you like that's so low That's not even enough for you to move on to something else You know if you're going to retire, would you rather sell for a million dollars or a hundred thousand dollars?

This is a 10x difference in what we're talking about just by setting up your finances the right way This is why i'm so adamant about this number. So I get so excited over the freaking finance of this You think this is like this isn't the most exciting topic in the world at all? But when you understand what this means to yourself your family your wealth Your ability to take care of other people your ability to take care of your staff and create a great income for them and a great job It all is based off of your ability to charge what you're worth and your enterprise value is tied to that.

It's tied to your profitability. So enterprise value goes up astronomically when your average visit rate is where it's supposed to be for your area. And again, that's different depending on your demographic area. But in this scenario, this is where it settles in across the board on average for our clients.

So the other thing is your stress goes down to think about this. I say you're working the same amount of hours, you're doing the same amount of, you have the same amount of effort, same amount of risk. You're, lease is the same duration of time. You have a personal guarantee on that.

All the stuff that comes along with it. People don't think about with business ownership. Think about this for a second. If you're sitting there and you're like, Oh man, this, how hard could it be? You sign a lease with a personal guarantee that you're going to pay that sucker off no matter what.

Personally, you can't avoid it and or else you could go bankrupt, I guess and maybe avoid it But you're gonna you're gonna lose all your assets if this doesn't work out And i've had friends that have had to close businesses and literally pay hundreds of thousands of dollars To actually get rid of break leases that were 10 year leases and businesses that failed and that sucks but that's a real thing That's real risk.

What about lawsuits? What about people that literally might have an adverse effect from you dry needling them? What about just like the reputation of your business? What about all the other things you could do? You're assigned to do this and it's stressful and there's risk, but there's a lot of reward associated with it as well.

And it's a fun game to play. It's a, it's the business is the greatest game ever. So there's a lot of reasons why we'd want to do it, but the stress is there no matter what. And I can tell you this having run businesses in a way where profit margins are super small like the second scenario It's so stressful.

It's so stressful every dollar it's just it means so much and it hurts when you have a bad month so much more than whenever you have Cashflow and profitability where you don't have to make rash decisions based on how one month goes So when we look at this your profitability increasing dramatically decreases your stress And I can tell you as somebody who has two kids and a spouse that I work with And I have friends and family that I enjoy being around and being present with them When my businesses were struggling and they were not doing well, or I was running at really razor thin margins, my stress levels were so high.

I would be at a family like Sunday dinner or something like that with, my wife's family and our kids and their cousins and I'm there, but mentally I'm checked out. I'm not like even there, my brain is completely somewhere else. Thinking about all the things that I need to do to make sure that we don't go out of business.

My health suffered, I would decrease sleep and I wouldn't train because I'd be working extra hard to try to make sure that we weren't going out of business. And when you get your business into a healthy position where there's profit, Oh my God, like the amount of stress that decreases in the business, but frankly in your life, cause you can't separate the two.

It's such a big difference maker. I would never ever run a business the way that this second scenario makes it. I would just wouldn't do it. I would literally go work for somebody else before I would do this. I could absolutely make more than 72, 000 a year working for another clinic. Then do all this work for myself, having a, having five employees that I'm worried about.

And making 72, 000 a year, like I just wouldn't do it. It's not worth it because the stress levels are so high and the risk is so high versus scenario one. I would love to run a business like that. Love it. Can make a true impact, build amazing culture, have a small, core team of people that are just absolute bad asses.

What they do within their niches and their profession. And run that business. I've run this business for years. And be happy to do so stress is going to decrease dramatically. This gives you the opportunity to invest and reinvest in your business. Now you may say, okay we're making 300, 000 a year in scenario one.

Yes, you could pay yourself all that for sure. If that's what you decide you want to do. And there may be certain years where you decide you want to do that. Maybe you want to buy a house, right? Maybe there's certain, whatever financial goals you have that you want to achieve. But you may say, what I really want to do is I want to reinvest in my people.

I want to reinvest in equipment. I want to reinvest in space and technology, and I want to go from where we're at now. And I want to double where we're at. I want to give my folks opportunity. I want to, I have an amazing clinician and I want to be able to move them into a new facility and let them take point on that and have this awesome opportunity that they now have.

Like you may say that you may also say, I want to have less profit, but I want to pour back in my people more. I want to help with loan reimbursement. And I want to be able to. Help take them through fellowship programs that are, expensive that they're interested in all this stuff. You can reinvest in your people.

In scenario two, you can't do that. You don't have the revenue to do that. You don't have the money to be able to actually Reinvest in anything you're too worried about even paying your mortgage in that situation So not only is stress up enterprise values down, but your business, reinvestment your ability to grow your business is super hindered It's very limited because you don't have the cash to actually be able to do that and my wife, she used to work in nonprofits.

She managed military nonprofits and they used to have this saying, they said, no money, no mission. And one of the biggest things that they would do is fundraise and fundraising is hard. If you go ask people for money you get turned down a lot. It's like sales, but no money, no mission. And the same thing is here.

If you don't have any money coming into your business, any leftover in your business is probably a better way to put it. You have no mission. You can't fulfill, you can't help other people, and you can't help yourself and your staff. So you gotta keep that in mind. Your take home pay obviously goes way up.

This is something that I've said, you could take all of it if you want to. You could reinvest some and take additional money from that. And as long as you don't move the goalpost, this is really key. This is super important, okay? If you continue to just spend every dollar that you make and your life expands as you make more money, you're always trapped.

Okay. You're always in financial stress, but if you can keep your lifestyle relatively similar to where you're at when you're making 70, 000 a year, and now you're making 300, 000 a year, the difference is life changing. It is the difference between true financial freedom and not, and you only do have to do that for a few years before you're in a different ballpark than everybody else because of your ability to.

Live off so much less of what you're making the percentage of what you're making so this is where we see people legitimately create life changing amounts of of revenue for themselves of wealth and and honestly be able to put themselves in a place where they're insulated long term With things that stress them out, like retirement, what are you going to do one day if you haven't been saving a ton along the way?

What if you can't save a lot because you're not even making enough money? This is a scenario where you can increase your take home pay dramatically. And the last thing, staff compensation and benefits. Already talked about this, what you're doing with them. Even something like a staff retreat, for instance, like this was one of my favorite things to do with our staff was we would do a staff retreat every year.

We go to different places and whether it's like a cabin in North Georgia, where we're at, or a really nice area, in Atlanta, that's like a hotel or, something where we can take them and we can take them somewhere that maybe they can't afford to go themselves. We can go for a couple of days.

We can connect and make sure that we're on the same page. We can get on the same page with our vision. We can learn more about each other. And frankly, just Just be people together, and enjoy each other and enjoy that time. And that's an opportunity to reinvest back in your people, not just financially, but just also as far as personal development is concerned, helping them make sure that they're moving towards the goals that they have and have those conversations and have the bandwidth to be able to help them do that.

These are all the things that happen whenever you take the stress burden of a lack of revenue off the table and you run your business the right way. So these numbers, like I said, these are general scenarios. This is very accurate for the businesses that we work with. And this is a business by the way, that is at a, um, it's at a threshold where it's stable, right?

Stable. You're not going to have these profit margins. If you are in a space that is big enough for this amount of staff, but let's say you only have two people right now, like your margins are going to be lower because Your overhead is higher for the number of people you have. So this is based off of stable revenue of the size of businesses that these are.

Okay. And this is where a lot of people can grow their practices too, if not past that. So when you look at this, like maybe you're just starting, maybe you're at 5, 000 a month. Maybe you're just thinking about starting. Don't take this as an example of something that could never happen. For those of you that are watching this and you have a business of this size, You should be roughly in this ballpark and you probably know it and you probably know whether you're there or you're not.

And for you, if you haven't done this, take a hard look at your finances and see where everything is going. See what your average visit rate is. It might be a lot lower than you think. Like actually do the work to dig into the finances a little bit. And if you avoid it, like so many people do, like I did for so long, like it doesn't get any better.

If you just avoid it, like it's not going anywhere. You can't just hide from this. This is your business. This is how you provide for your family. And this is how you provide income and stable jobs for your staff. Like they deserve it. They deserve you taking this very seriously because it's how they make a living as well.

So if this isn't, if this is something that just completely you're like, good Lord, Danny. I don't even know where to start with this. I don't know like where to begin. This is so confusing. And I think I'm in a rough spot where I don't know. I don't want to start with bad habits. If you're just getting started, head to physicaltherapybiz.

com. We'll link to it in this description. And take a look at our stuff, like legitimately listen. We help cash based and hybrid practice owners all over the country. We've literally helped over a thousand. Currently we're working with over 300 businesses right now between the two programs that we have.

And we have a lot of alumni from programs we have that have gone on to be really successful. That's awesome. It's amazing. When I look at, The net effect of what we've been able to do. So this isn't coming. I'm not coming at this from an angle of, I just think this is a business opportunity.

This is my profession. This is what I went to school for. It's very important to me just personally that these businesses are functional, because I think what they create more than anything is the person that has the guts to take a risk on this. It can create a life changing opportunity for you.

The people that get a chance to work for you. If you have a practice that is well run, that is a great culture, a culture That really like breeds excellence in clinical outcomes and in pushing the profession forward I think that makes our profession better in general and I would like nothing more than to see A ton of these practices all over the country and we're just getting started We already have a thousand people we've worked with and those thousand people are going to continue to hire So many of our peers that are disgruntled and frustrated in the clinics that they're in And I know that so if you are looking to get some help on this and you want to work with somebody that you can Actually trust that's a part of this profession that didn't start I didn't go into physical therapy to start a consulting company to help physical therapists for God's sakes I was in the freaking army whenever I went into physical therapy and I thought I was gonna be there for a career but this is where I am now and I feel like it happened a really big opportunity and I think we can help many of you actually get your business on the right track with people that are honestly trying to help you and understand what you're going through as being a part of the profession themselves.

So if you're looking for help on your business and it's this style of business, a cash or hybrid practice, take a look at our website, see, some of the people that we work with, see some of the case studies. And if it makes sense for you, you want to have a conversation with somebody to dig into your business a bit more, and you want us to actually Take you through our business assessment, which we'll do with you on a call and see where your weak points are.

We'd love nothing more than to do that. You can jump on a call with one of our business advisors and we can dig into your business and really see where you could improve and where you might need help. So thanks for watching. I hope that this is helpful. I hope that you like this style of education.

If you do, let me know in the comments, I'd love to hear what you think, what you like more of all that. But other than that, Hope you have a great day. Hope you enjoy this and I'll see you in the next one.

Hey, Peach entrepreneurs. We have big, exciting news, a new program that we just came out with. 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.

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