E473 | The True Value Of A Cash-Based Practice

What's up, everyone? Welcome back to the podcast! Are in-network and hybrid practices more scalable than Cash-Practices? They are. The decision to have a cash-based practice is not based on financials. It is based on being able to work with highly compliant, very motivated individuals who want to be there to fix their problems. That is the true value of a cash-based practice.

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Podcast Transcript

Danny: Hey, I've got a question for you. Do you know if you're tracking the right data, the right metrics to the right key performance indicators in your practice? This is something that's huge for us and really helps us make solid decisions within our business, but the prior software that we're using to run our practice made it really challenging.

To actually get that data out and use it in reports. Since we've switched to PPG everywhere, this has actually become way, way easier for us to be able to have the right data. We have a dashboard of all the things that we actually want to see, the metrics that we want to pull, and it makes our life a lot easier to pull the information that we need to make the right decisions within our business.

So if you're running blind and you're not tracking the right things, or you're. Hard time actually pulling everything together. I highly recommend you check out our friends at PT Everywhere and see what they've got going on with their software platform. It's what we use for our practice. It's been a game changer for us.

You can check 'em [email protected]. I think you really like it. So here's the question. How do physical therapists like us who don't wanna see 30 patients a day, who don't want to work home health and have real student loans create a career and life for ourselves that we've always dreamed about?

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

What's going on guys? Doc Danny here at the PT Entrepreneur Podcast, and today we're talking about the kind of most important reasons why we start cash-based practices from. Conversations I've had at this point now with a few hundred actual cash-based practice owners. And it's interesting for me as I look at this and I started to distill this down to common reasons why people actually start and what they love about this variation of a practice.

And I'll start with saying this because it does change for sure as you go. So there, there's kind of two common reasons why we see that people really love this model. Now, I will start with the fact that I think that the cash model is a, it's an inferior business model in comparison to in network.

And and I would say hybrid as well. Honestly, the, and the reason I say that is if we're, if the score let's say in business the score is revenue and is growth potential ability to sell In-network practices for sure are more scalable, they're more sellable and they're a better business vehicle from a pure business standpoint.

A hybrid practice, you could say the same thing about, because you're gonna have elements of insurance that are still within that. And You're gonna be able to scale and sell to private equity if that's what you decide you want to do, or hospital system or a big ortho group. Any number of of groups.

I, I think it's financially just a better business model. I. And what's funny is I've had people ask me or say oh, the cash model is greedy. You're an elitist. Like you can only work with certain people and I guess in some capacity there's some truth to that.

But the reality is, The decision to have a cash-based practice is not based off of financials. The if I'm doing something from a purely a business standpoint, I get it's not the fastest horse by any means. But what I think outweighs the business potential because I think a couple things.

Number one, if I was to, if I was to flip our practice to a cash or to an in-network model, like we, it would explode in volume. There's no doubt about that. Our gross revenue would explode our net probably wouldn't change too much in relatively, at least. I think the cash model is more net positive.

Honestly, there's less overhead. But you can't grow it quite as fast or big as an in-network practice. But what I couldn't force myself to do, and I thought about this, Force our staff or anybody a hire to, you don't have to see the volume associated with seeing, in-network clients to make the average visit be where it needs to be to have a sustainable business model.

There's a reason why it's like that. It's not everybody owns an in network practice is just like trying to see as many people as they can cause they wanna wear their staff out. It's because they have to have certain numbers based off of reimbursement. It's just, it is what it is. You have to see more people because you're getting reimbursed less.

And I don't I just couldn't ha, I couldn't do it. I couldn't have that happen with my staff and put them in a position where I know that they just wouldn't feel as happy as, functioning as a clinician and to also put them in a place where everybody that's on their schedule is not really there to get better.

So this brings me to, my, my point with this podcast to begin with, which is the number one reason. And the number one sort of benefit that I hear when I talk to clinicians that are newer, just single practice single clinician practices is the best part, is the people having highly motivated and oftentimes very niche specific people that come in your office that have skin in the game.

They're paying to be there, they. Ultra compliance, you're never gonna question whether what you're doing is working or not, because these people are there to get better. They're not there because they've been in an, in in an injury, in a motor vehicle accident, and they don't really want to get better.

Or they're on work comp and they don't really want to go back to work or any number of other things. And I'm not saying everybody in those situations. Is like that. But we've all had patience that have honestly just been so frustrating to work with because you know that they don't, they just don't want it.

They don't wanna get better. And you wanna work with people that want to improve, that want to listen, that want to be compliant and do what they have to say. And even if somebody does wanna get better and they have no skin in the game in terms of paying to be there, they don't perceive what they're getting from you as valuable as if they're paying for it.

So the number one benefit that I hear and see and I've seen myself is. Functioning in an environment that is ideal for a very motivated clinician. If you. Obsessive over getting people better. You love learning more about the intricacies of treating things and you like being that cleanup person that everybody else has.

Like they've gone to see everybody, they've seen five other providers, nobody's been able to help their hip pain or whatever it might be. And you're like you haven't seen me. Come on and let's get after it. Cuz I think, there's some things that we need to work on that hasn't happened that we can improve and we can avoid surgery, we can.

You limiting activities for the rest of your life and bring a lot more joy and value back to that person's life. If you wanna be in that position. A cash model is the best model because that's exactly who you're going to attract. That also puts you in a position where you have to really own your outcomes and, and continually try to be better.

But if you find this like your passion, like you want to be the best provider in the world, the best provider you can possibly be, I think it's the ideal business model for that and for that reason. It's it's why I chose to open a cash-based practice, not because of money. And this is what I think, just cuz it says cash in it.

People think it's, it's all about money. It's not it's about, people that are motivated coming in your office and you actually being able to truly help them and them really putting the effort into doing the things that they need to do, to make true lifetime changes.

Now once a clinician grows past, They're, a single provider state, and now they have the ability to grow a team. The the most rewarding thing changes. It's, and it's interesting, a change is they go from loving the ability to work with. People that actually really try and want to get better.

And they get a lot of energy out of working with their clients versus, dreading going to work. The benefit that changes whenever you grow past yourself is the fact that you now get to employ people that get to do the exact same thing. And, I've heard people phrase it this way.

They say, are we hire people and these clinicians get back to. What they do again, right? They like, they get back to loving being a world-class clinician again, not hating having to write two hours of notes a day and catch up on Saturday mornings. Not having to, shuffle through 15 to 20 people a day and not know.

What that person they spent 15 minutes with is actually doing what they're supposed to do correctly and enough of, and if they had any questions and they do they have enough buy-in, just not having enough time to work with people the right way. So being able to employ people, and I always looked at it like saving them from these.

Frustrating existence of high volume clinics that many of our peers are stuck in that really want to work with people on movement based problems and help them improve long term like that. That's hard to do in a high volume clinic. And if that's you and you're in that, environment and you're, you feel frustrated and burnt out and.

You, you don't know what to do. You don't enjoy your career the way you thought you would, and now you're, you went into a lot of debt to get there and time and energy and you could have done many things. And it's, I think it's very frustrating. You have two options.

You either find a clinic like my clinic or any of the number of clinics that we work with that are, within our PT biz, coaching groups. To be employed by, and be able to be a great clinician in a setting that allows you to be that way. Or if that's not enough for you, then you have to do your own thing, and for a lot of people, that's what they decide. They look at the numbers, they look at the risk, they look at, their area, they look at their niche, what they possibly can do, their skillset, and they decide to dive headfirst in on their own thing. But that doesn't have to be the case, and I talk to a lot of clinicians.

Like it, it's just not the right option for a lot of people. It's not the easiest thing to do in the world. There's risk involved. There's stress. If you don't handle it well, it can really deteriorate your physical health, mental health, the relationships that you have around you, it'll take a lot from you if you start a business and you don't know what you're doing.

It takes a lot from me. Even if you do know what you're doing, frankly. It's a very hard thing to do. So it's not necessarily the best option for everybody, but if it's the option for you, it's the, it's frankly the only option for you. And that's the only way I can put it. If you have this deep feeling that you gotta do something on your own, whether you need to see how you stand up in that environment, how do you handle that test?

You feel like you want to bring something and be creative. Expose that to the world and, really create something special that your family can be a part of and you can grow and expand and hire other people and if that's you and you're chipping away at a, at a PT Mill job, it's just a matter of time before that starts to just gets, it just starts to fester and it starts to bother you.

And eventually you just, you gotta do something and the frustration outweighs the fear and then you go for it. But that's not everybody. Cuz some people they just want to have a cool job and that's actually most people and that's great. There's no reason that everybody started a business.

I actually don't even think that's the case cuz it's not for everybody. But what I hate to see is just PTs and clinicians in general that are just like slowly dying, in these environments where they just don't really like what they do and they could be spending their time and their energy towards something that's gonna be a lot more sat satisfying for them and really helping people make true long-term changes.

And they. I mean our just health landscape sucks. People are just very unhealthy. People live incredibly unhealthy lives for long periods of time, and they create problems for themself that, they have massive holes they have to dig themself out of, and we can help them do that. And I think that audience of people is increasing.

Dramatically which is great for us and for where we're at, and I think the business model will improve more and more over the next five to 10 years in particular. But, for those of you that, they think our business is just about money. It's just not it's a byproduct of a successful business, right?

That's what it is. It's a byproduct of a successful business, and you need a certain amount of money to meet your living expenses and justify the risk. That you're taking on. But when you actually talk to these people, and I said I at to date our company has helped over a thousand clinicians either get started or scale practices, and I've had one-on-one conversations with many of those people and over again I hear number one, if you're just getting started, the most dude, the most valuable thing, the thing they love the most, that they wouldn't trade for anything else is the.

I just love working with these people. It's awesome. I love going to work. I know I got highly motivated people that are bought in and they're compliant. Like in a perfect world, that's all we want As clinicians, we want to help people. That's why we went to school and we want them to do what we say and want for them to want to help themself as well.

That is priceless. I if you that, if you know you're getting that. Your day is just so much fun. And you get to problem solve and you get to really make true changes with people and have difficult conversations sometimes about things they need to improve and know that they're listening and there to learn like that is so valuable.

And on the flip side of that, when you grow past yourself, you then get to bring other people into that ecosystem and they get to see just how special it's to be able to function in that environment, which is very rare, to have this. This environment where people are really there to improve and there's no other things that are in the way and they want to get better and they wanna learn, and they're, they want to be, educated and part of the process and take ownership and that's awesome.

And when you get to bring other people into that, And expose great clinicians to that. And they love that environment. And you get to take them from a setting where they're frustrated to a setting where they, they feel like they, enjoy working as a clinician. Again, that is the real value of these practices.

Far more than me selling, our practice for, multiples of millions to a hospital system that's just gonna slowly. Crush our business and completely change all the hard work that we've done. There's no amount of money that I would sell my practice for to allow somebody to do that because of how valuable all the other elements of it are.

Hey, Pete, entrepreneurs. We have big, exciting news, a new program that we just came out with that 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 a. Ultra clear on how much you're actually spending.

We get you crystal clear on the number of people you're getting 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 that you can take to go from part-time to full-time, and 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 wanna go full-time in your own practice. And then finally we help you create a. Page business plan. That's right. Not these 15 day business plans. You wanna take the Small Business Association, a one day business plan that's gonna help you get very clear on exactly what you need to do and when you're gonna do it.

To take action if you're interested and sign up for this challenge is totally free. Head to physical therapy biz.com/challenge. Get signed up there. Please enjoy. We put a lot of energy into this. It's totally free. It's something I think is gonna help you tremendously, as long as you're willing to do the work.

If you're doing the work and you're. Information put down and getting yourself ready to take action in a very organized way, you will have success, which is what we want. So head to physical therapy biz.com/challenge and get signed up today. 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 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 of that group.

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