Chiropractic Coaching: The Secret To Profitability
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Chiropractic Coaching: The Secret To Profitability
Hello everybody and welcome to Thrive in Five. I’m Dr. Dennis Perman and I’ll be your chiropractic coach for today. The subject matter of this Thrive in Five is The Secret To Profitability. Now, you’ve probably heard me tell the story of the dumb guy who bought 500 watermelons for 500 bucks and decided to sell him for a dollar a piece, and his friend said to him, dumb guy, how can you possibly make any profit like that? And the dumb guy said, well, volume, of course. You see, if there’s no profit built into your formula, then it doesn’t matter how much your volume is, you’re not gonna be making any money. And yet so many of us choose a fee policy that we just pluck out of the ozone. Either something that was like what we were accustomed to in a day, gone by or something that somebody we admire or respect charges, or maybe you call FFAs and find out what the going rate is in your area.
Frankly, none of that really makes any sense. The way to figure out how much you should be charging and how much profit you should make is based almost entirely on what your desire is. If you desire a substantial profit, then that’s gonna require a little bit of planning on your part. I have a simple formula that’s gonna make it easy for you to figure out exactly how much you should be charging. The first order of business is to take your monthly overhead. Now, I’m just gonna pick some numbers. They may be much less or much more than what you’re currently costing in order for you to run your office. But just use these numbers as a exercise and you’ll be able to figure it out from here. So let’s say for example, you’re spending $12,000 a month on your office, and let’s say for the sake of argument that you work approximately 30 hours a week or something like 120 hours a month.
Well, if you work 120 hours a month and it costs you $12,000, the math is pretty simple. 12,000 over 120, it’s costing you about a hundred bucks an hour to run. Now why is that important? Because if it takes you 30 minutes to see a patient and you charge $50 a visit, then you’re selling $1 watermelons for a dollar. No, you have to have profit built into your process. So in this case, I just gave you this, this example, you would either have to see more than two people per hour. Let’s say you see three people per hour. A 20 minute visit still may be a flabby visit, but let’s just use it as an example. Now you make one 50 for an hour, that costs you a hundred. But if you understand business, you know that you have to pay your overhead and you have to pay your taxes, and there still has to be something left over for you.
So typically you would aim for at least two and a half to three times what it costs you to run your business for an hour in order to make a substantial profit. So let’s see what that looks like in dollars. Let’s say it costs you a hundred bucks an hour to run, just like we figured out 12,000 over 120 hours. And let’s say you charge 50 bucks a visit and you can see six people an hour, 10 minute visits, now six times 50. Now you’re making 300 or three times the hundred dollars that you co that it costs you to run your practice. This is a coefficient to profitability, a term I made up, but a useful term, a coefficient to profitability of three, because your income is three times your expenses. Now, some doctors are very happy with a co, uh, coefficient of profitability of three others wanna make five or 10.
The beauty of this is you now have a mathematical formula to figure out exactly how much you need to charge per visit based on how long it takes you for the visit and how much it costs you to run. So this is a, a very simple formula. Um, if you need help with this, obviously you can contact me, [email protected], or you can call us at (800) 451-4514. And of course, I’ll be delighted to help you figure out what your coefficient of profitability is. But there’s another piece to this that I wanna mention before I let you go for today. In addition to the math, there’s also a consciousness to profitability. It’s important to feel worthy. It’s important to feel that what you’re doing has value and that the service that you provide is making a difference in somebody’s life. And that’s one of the reasons why you are entitled to make a profit on.
So when you combine the mechanics and strategies of understanding how the system works with the consciousness of recognizing the value of what you do as a chiropractor, you are loaded for bear and you never have to worry about being that guy selling $1 watermelons for a dollar. As always, it’s my pleasure to serve you. Please go out and make a lot of money, because what that means is that you’re serving a lot of people and changing the quality of their lives with chiropractic care. This is Dr. Dennis Perman from The Masters Circle Global signing off for Thrive in Five for today.
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