One of the key takeaways that many high-level Mastermind members get when working with me on a deeper level, is the importance of getting “boring”. Without a shadow of a doubt, my biggest lessons in business have come off the back of the boring stuff not done well.
To be clear, when it comes to business, there are different positions. As on a football field, there are different positions with different skill sets. As a small business owner, you’re expected to hold your own in all of them to a certain degree. By and large, the four distinct areas are: Marketing and Sales, Operations, the CEO/visionary role, and finance. The first three are, by far, way sexier, more instantly gratifying, and more revered than the last one. To label these departments, Sales and Marketing is the attack, the CEO/visionary is the coach/manager, Operations is the midfield, and finance (and to certain degree HR and legals) is defence. You’re basically in the game of running your practice (playing football) with no goalkeeper. That is a common denominator in most businesses.
Having run multiple businesses and having worked with hundreds of practice owners, now I can say, without a shadow of a doubt, that within the Chiropractic community, healthcare professionals have the biggest disadvantage and must develop the most knowledge and the largest skill set in the finance department. Quite frankly, most practitioners don’t know what that f*** is going on!
Reading monthly P&Ls and balance sheets correctly is just alien, at least it was to me. It still is in many respects, compared to many of the business owners with whom I hang around.
You would be surprised by how many of the business owners with whom I’m acquainted put such a huge emphasis on this. Many of the upscale, six-figure Masterminds I attend, put tremendous emphasis on the financial aspect of business?
So why are you receiving this short synopsis of the different positions within a practice? It’s vital to redefine the importance of them. In my personal life, the biggest mistakes I’ve ever made in business have everything to do with defence and finance. And most of the business owners with whom I work now make their biggest mistakes off lack of awareness of the finance departments.
There’s a saying that, “You cannot change until you’re aware of the first part of change: awareness.” So, what should your profit margins be? That depends on what type of business you want, the lifestyle you want, and what model you run. For example, if you’re single doc running a high-volume practice, your margins are going to be substantially higher, so you may be able to afford, a practice manager or operations manager, who doesn’t do all that much time at the front desk. You’re hiring that person to do more for you as the expert model. Hiring that individual is a luxury. And looking at a P&L on a monthly basis, you might see that your income is just not there for an associate-based-only practice, because you’re potentially not past certain key points in your business that allows you to do that. If you’re watching your P&L and your balance sheet you will know that.
I’ve seen the profit margins vary anywhere from 35% to 60% in an expert-based model, and I’ve seen the profit margins vary anywhere from 5% to 30% in an associate-based model, where the practice owner is not adjusting at all.
Hope this was helpful!
Yours in Service,
Dr. Ryan Rieder, D.C.