The 3 Skills to Master If You’re Going to Make It In Private Practice.
Part 1 of 3.
Sounds easy, right?
And there’s a good chance one of those skills is world class high quality PT service and care. So that only leaves two others.
So just master the other two since your care is top notch.
And you can have the practice of your dreams.
Then you’ll be making plenty of money.
And be able to take time off without having your practice crash.
Ahhh! That will be the day.
Well, I’m here to tell you it’s not that easy.
If it was, almost every PT would be going into Private Practice.
And I don’t have the exact numbers in front of me.
But from talking with Private Practice Owners around the US, I meet more owners who are looking to step away from Private Practice than those who are looking to start.
And that’s too bad.
But if we’re going to turn this around and save Private Practice as we know it.
We need to do two things:
- Take a good hard look at where we’re at now.
- And define exactly where we want to be.
So having said that, I see 3 BIG areas of knowledge that most of us neglect as Private Practice Owners.
And like most of you, I assumed that because I had Master’s Degree in PT that I also had the business skill to start and grow a Private Practice.
And I was way off.
So here’s the 3 Skills that Successful Private Practice Owners (and frankly just about every business owner) must master:
- Money. How to handle the flow of money, investing in areas that make more money and eliminating waste and creating a PROFIT.
- People. How to attract better staff and how to get them the training they need to excel and control their area in your business without giving you headaches.
- Marketing. How to attract clients who are willing to overcome all obstacles of time, money and distance and DEMAND to see you.
And if you’ve already heard this before and are thinking, “I know…I know…I know…”
You’re doing yourself a great disservice.
I know how you feel.
As I felt the same way early in my Private Practice career.
And I blocked myself from learning the basic fundamentals of building a business.
But what I found is that I really didn’t know.
And I made the mistake of confusing “recognition” with “understanding”.
Because I had heard about the importance of managing money, people and marketing, I thought it was common sense.
And I was dead wrong.
So after going down the road of hard knocks and getting sick and tired of making excuses for a mediocre Private Practice life,
Early mistakes and what I’ve learned…
(I’ll cover the above 3 topics in that order –– money, people, marketing. They are not necessarily in order of importance as People is probably top priority. However, to achieve your Perfect Practice Picture, you’ll need to master all 3).
Early on, I did not know much about the Management of Money and Financials.
I believe many of us will deny that we are in business to make money or a profit.
Yet today, most of us could go work for a hospital system or large corporate PT company and make similar money with less work hours (especially if you’re in the early stages of Private Practice. Say a Minor Leaguer or Major Leaguer. Not sure what I mean by the “Levels of Private Practice PT?” I made a video explaining this for you. Just email me at firstname.lastname@example.org and write “4 Levels” in the subject line).
So why don’t we do that?
Well first, most of us value having the ability to make our own decisions and be our own boss.
That can be an amazing thing!
Or sometimes not an amazing thing.
Second, I believe most of us deep down, if we’re honest with ourselves, are driven to build a practice that leaves an impact on our community, gives us time freedom (so we can spend more time with our family or pursuing other interests) and ultimately gives us financial freedom.
But most of us have trouble managing money.
And have never learned that skill set.
I’m going to give you some basic fundamentals here in a Financial Checklist.
If you’re looking for more, I’ll give you details on a course I completed: “What They Don’t Teach Us About Money in PT School” — more details on that later.
In it, I’ll include a video tutorial looking at my actual Madden PT (that’s my private practice) Financials.
The Financial Checklist:
- Income > Expenses. Pretty simple. I could probably stop here because if you truly understand that, you’re way ahead. Tough to keep your doors open if you’re not profitable. So what’s Income? Yep. That’s the money you actually bring in. It’s not how much you bill out or how much you adjust off. Forget those numbers for this conversation. A true business person only focuses on the actual amount of money you bring in and deposit in the bank. That’s Income. So what are your Expenses? Payroll, your pay, benefits, rent, utilities, equipment and maintenance. PLUS, Marketing and a Reserve. Most PTs leave these last 2 out.
- Invest in Promoting Your Practice. 10% of your gross income devoted to growing your practice and attracting new patients to treat tomorrow. This gets more efficient over time as you discover the best marketing systems for your area.
- Don’t pay more than 45% of your Gross Income for Payroll and this includes your pay. I’ve seen too many owners pay $50/hour to a PT who’s generating $90/hour. “Them numbers don’t work.” If you’re total monthly income is $30,000, total payroll should be $13,500 or less. Income at $100,000? $45,000 in payroll. You get the idea. Don’t overpay for staff. It leads to a culture of desperation and a deviation away from your Perfect Practice Picture guaranteed.
- Create a Reserve account. And put 10% of your previous week’s collections in that account. And don’t touch it. You’ll make better business decisions. This action will force you to be more efficient and automatically makes you profitable. And don’t borrow money to pay your bills. That defeats the purpose.
And “YES”, I actually do these.
As I’ll show you in the Private Practice Financial Tutorial, I do put a weekly check into a reserve account.
What I’ve found is it gives me some power in making financial decisions because I’m not feeling desperate. (For example, 3 years back I was able to purchase a 19,500 square foot commercial building because I had the cash to do so. I just recently sold it for near full asking price $3,195,000. That would not have happened without a Reserve account.)
I’ve experienced the other side of the coin too. Not fun.
So to help you along, if you’re looking for it, I created a new training called “What They Don’t Teach Us About Money in PT School.”
You can access the training today. In fact, right now.
After you go through the course, you’ll get the opportunity to take a more detailed course by making a donation to the kids trust (an organization I support that helps abused children)..
If you do that, I’ll give you access to my Private Practice Financial Tutorial where I walk you through my actual financial numbers and how we track them here at Madden PT.
To your Private Practice Success,
PS – Next time we’ll be covering People. “How to Attract and Train an Rockstar Team”.
PPS – The link for the Money Course is here…