Do you want to grow your practice into a million-dollar practice? Do you know what financial formulas you need to be focusing on? Do you have an understanding on what percentages you’re spending on all of your expenses?
In this podcast episode, Joe Sanok speaks with Kasey Compton on how to start a million dollar practice and make a profit.
This might not be for everybody. But, some of you out there want to start a million-dollar practice. You know inside of you that you could scale huge, you could impact your community, you could make a lot of money, but, even more importantly, you could be able to serve so many more people.
If you want to start a million-dollar practice. If you want to grow, know the systems, and have us help you, Kasey Compton and I are launching a brand new Mastermind starting soon. It’s called: How to Start a Million-Dollar Practice.
It’s going to include:
- Having time at Kasey’s office learning directly from her
- Coming to Traverse City with me to learn about marketing a practice
- A year of us teaching and walking you through exactly how to set it up so you can have a million-dollar practice
To apply for this Mastermind Group, head on over to practiceofthepractice.com/milliondollarpractice.
Meet Kasey Compton
My area of specialization is in anxiety and panic disorders. I work with clients from early childhood to ages 65+. I use a very successful treatment program to reduce and/or eliminate the anxiety and panic that you are experiencing in your life. All of my clients who have completed this program have experienced significant results. I look for people who are dedicated and willing to commit to the treatment process. These clients are always the most successful!
- Website: https://www.mindsightbehavioral.com/
- Facebook: https://www.facebook.com/mindsightbehavioral/
Kasey Compton’s Story
In This Podcast
In this episode, part four of five in the podcast series, ‘How to Start a Million-Dollar Practice’, Kasey Compton provides an overview of the five phases of starting a million-dollar practice. These include purpose, planning, process, profit, and people. In this podcast episode, Kasey provides a step-by-step guide on how to make a profit.
5 Phases of Starting a Million-Dollar Practice
- Purpose – knowing what your purpose / passion is & how you choose to impact your community. Define your ‘why’.
- Planning – market research, knowing reimbursement rates etc. if you’re insurance-based, cost of living, what insurance do most people have?
- Process – in order to make your private practice scalable and effective, you need to have processes and systems in place.
- Profit – looking at your numbers, i.e.: top-line revenue versus profit margins, looking at your profit and loss statements – seeing everything from a percentage-based point of view.
- People – finding people that support your other 4 ‘P’s’, that support your purpose, that are team-players and that are willing and excited to be participants in your process. People that are hungry for growth and share your perspective in the field.
You’re going to need to start by working backwards from how much you’re going to charge clients and then how much you’re going to pay your clinicians, etc.
- Know what the average gross and net profits are per clinician per year.
- Know how to determine your annual gross profit.
Have an understanding – in percentage – of what you’re spending on all your expenses. Viewing your expenses in percentages makes it easier to scale your business. Learn how to look at your numbers and understand them.
- Apply for the Million Dollar Practice Mastermind
- How to Start a Million Dollar Practice with Kasey Compton: Processes to Scale 3 of 5 | PoP 303
Meet Joe Sanok
Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners that are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.
Thanks For Listening!
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HOW TO START A MILLION DOLLAR PRACTICE WITH KASEY COMPTON
HOW TO MAKE A PROFIT 4 OF 5
[This might not be for everybody but some of you out there want to start a million-dollar practice. You know inside of you that you could scale huge, you could impact your community, you could make a lot of money. But even more importantly, you can be able to serve so many more people. If you want to start a million-dollar practice, if you want to grow, know the systems and have us help you. Kasey Compton and I are launching a brand-new mastermind starting soon. It’s called “How to Start a Million Dollar Practice?” It’s going to include having time at Kasey’s office learning directly from her, coming here to Traverse City with me to learn about marketing practice and a year of our teaching and walking you through exactly how to set it up so you can have a million-dollar practice. To apply to this mastermind group, head on over to practiceofthepractice.com/milliondollarpractice.]
This is The Practice of the Practice Podcast with Joe Sanok – Session Number 304. Well, today on The Practice of the Practice podcast, it’s day number 4 of the Million Dollar Practice with Kasey Compton.
How are you doing today, Kasey?
I’m great. How are you?
Yeah, this has been awesome! I’ve been so impressed with just how much information you’ve fit into some very short podcast. Really lumped them in there and you have so much amazing information. People are taking tons of notes. There are talking about it on Facebook and Twitter. And, I’ve been getting so many emails. You’re just causing some big splash wherever you go. It’s awesome.
Well, as long as it’s a good thing. I’m okay with that.
You know you don’t want to cause a big splash when it’s a bad thing.
Well, the first 3 days, we covered Purpose, Planning, Process. Those were the first kind of 3 components. And today, we’re diving into Profit. Probably, one of the most popular ones because one of the reasons that people go into business is to make money, maybe have their lifestyle be different than how it was, and also make an impact on the world. So, where should we start with profit?
Okay, let me tell you. I think I may have talked about this and actually I did in the first podcast I did with you but just recap of it. Whenever I first was in private practice, I thought, “you know what, I’m ready for some residual income. I’m ready to start a group. I’m ready to do this.”
I don’t have any money. And so, I found out what the reimbursement rates are on the insurances that I want to do except I found out what I was going to pay my clinicians roughly. I used the math and just said each clinician are probably going to do 20 hours a week. I’m just going to multiply that up. For my first year, based on the staff that I had as a group, I think I projected $334,000. That would be called your top-line revenue because that’s what’s coming in on top. So, I took that.
I had a friend of mine that he’s kind of an investor and he likes to spend money. I was like, “Hey, I would like about $30,000 and I think I could give your return on your investment in 3 months safely. And, this is where I’m projected to hit.” He was like, he’ll never do that. That’s no way it’s going to happen. So, then we filed Texas for that year. I think I was just a few thousand dollars off and I hit it almost to the T. But, that’s just an example of knowing… you’re going to need just a basic projection of if you want to be a millionaire dollar practice, then you need to work backward. How much are you going to charge? How much are you going to pay your clinicians? How many sessions are they going to average? And then, just work backward. If you’re way off, then you may need to either think of ways to increase your revenue, increase your volume, or make some adjustments along the way.
I love that you start with just the basic math of it. So, few people when I… It’s amazing when I say, “Well, how many sessions so you can hit your numbers?” “I don’t know, 15? What should it be?” You tell me. How much you want to make. Just starting with that in years of profit is a good place to start. Where do people go after they figure that out?
Okay, so, I’m working on this e-book and I’ve got a few formulas in there that I think people that are very simple that I think people would find helpful. And just, one, finding out what your top line revenue is of course.
One of the things I do in my practice is I figure out what on average, what my gross per clinician is per year so I know that if I have 20 clinicians and they’re grossing the company. This isn’t true. I’m just making up in able to multiply quickly. So, say, their gross the company $40,000 in a year. That’s $800,000. I’m almost starting at my million. You know, knowing how much your clinicians are profiting both gross in it for you is a good thing.
I do have those percentages kind of broken down on how to get to those numbers. Looking at how to determine your annual gross profit is important. Like you said, just how many sessions. We incorporate this into our interview process because I feel like people have a certain expectation when they come in. I feel personally responsible if I start working here and they’re not making enough money to pay their bills. I get really anxious. And so, I sit down with them in the beginning and say, “How much do you need to make a year? How many hours do you want to work for a week?” And just make sure that it matches. It’s sort of the same concept with the profits piece of this.
Let me say. There’s one other thing that I thought was really important. Okay. Most of the people, if you’ve been in practice for a year, at least, you’re probably going to have some numbers already. Whether you use Quickbooks or some other type of system. Running those reports, you can run a profit and loss statement and you can go in there and do a percentage in the report. It will tell you what percentage you spent on each of your categories that you’ve allotted. I think that is huge to go in and evaluate what percentage are you spending on rent. What percentage of your spending is going on overhead costs? It’s kind of good to know your fixed costs. The ones that you really can’t change like your rent and different things like that. And then, how much are you spending on other things like cleaning. If you’re spending 5% of your gross top-line revenue on cleaning, that’s probably a problem. You know, you need to make adjustments.
One of the biggest things with profit is teaching people how to change their mindset into a percentage-based thinking model rather than a dollar amount thinking model because automatically when you convert everything to percentages, your ability to scale just becomes so simple. You don’t have to change your budget every 2 months as your staff grows. You have your say, “Based on my budget, I’m going to spend 3% of top-line revenue for a rent across the board on all of my offices.” And then, you know, as your business grows, your top line revenues going to grow. And so, that budget is ultimately going to grow as well. Does that make sense?
Yeah, totally. So, then, a practical example would be, instead of saying 200 bucks a month, we’re going to put into advertising Facebook, pay-per-click, whatever. Instead, if we know we’re going to do 5% of top-line revenue, then, as people are bringing in more money, you’re then re-investing in that marketing which then gives you the ability to scale, grow, and kind of keep that host open kind of coming in.
Yes. Once your company grows, you know, my expenses it almost kind of takes my breath. Whenever I go and look at 2016 to 2017 of what changed in that year. Because you kind of get to this point in private practice that you’re right there in the cost and you’re either going to need to stay small and keep your overhead low, or you’re just going to have to push it out. Focus on volume because there is a spot there where you do have so much more overhead. And then, you have to hit start numbers in order to make that overhead. So just knowing what that is.
I’m a numbers person. I love working with numbers. I love manipulating numbers so I kind of knew when that was coming in my practice. But, I don’t think the average person that just doesn’t love numbers would be like, “Hey, I’m going to hit this point where I’m either going to have to hire 5 more clinicians or I’m going to have to struggle for a few months.”
Yeah. Well, I think that so often people don’t understand that as your expenses go up, it’s usually because your business is growing. And so, when I look at the amount that I pay my clinicians, my virtual assistants, Sam with marketing, all of that, the amount that I’m paying out in staff compared to when I had a full-time job, it’s like, “Holy cow, I have so much more money going out than I ever had to come in before.” But, that’s because we’re growing because we’re serving more people. We need those extra staff to make more videos and content that gives us more consulting clients, more mastermind clients but by doing that, it helps us be more competitive in what’s a growing market. I mean private practice consultants, there are so many people that are kind of throwing up a shingle. But if we’re going to compete, differentiate ourselves, we need to reinvest in a lot of those free services but then we know it helps us scale so much faster than just like a solo consulting.
I love that you say that point that it takes your breath away. That’s holy cow. I feel that way every month too when I look at my expenses but it’s still one of those things that it shows that you’re growing.
What are just a couple of your final points regarding the profit phase?
The profit phase is really, really important. If nothing else you’ll get out of that, learning how to look at your own numbers, learning how to analyze those, and get to a place where you feel confident. I mean I feel like I’m a pretty conservative business owner in terms of spending, and so I tried myself to be very strategic in how I spend money and how to utilize things for multiple purposes. I hope to be able to teach other people how to do that instead of just going out in buying 25 printers for the sake of buying 25 printers. There are other ways that you can scale your business without cutting into your revenue substantially.
Well, when you think about you’re looking at top-line revenue, say, what percentage you put on your own ongoing learning whether it’s going to conferences, having a consultant, be a mastermind group, speeding things up in some way, what does that mean to how to get your million-dollar practice a year early? That’s a lot of extra money coming in and why should you spend time dinking around and trying to figure out yourself.
Well, if you want to join our mastermind group, you’re welcome to apply over at practiceofthepractice.com/apply and if some reason it’s not a fit, we have a lot of things that we can connect you with, whether that’s one-on-one consulting with Kasey or with Allison. I almost combined your name. Or, you know, a different mastermind group, we will work with you and we’ll tell you how to get the best use of your time and money.
Thanks so much for letting us into your ears and into your brain. Tomorrow we’re going to be covering the final step and that’s people.
[So, if you want to join this mastermind with me and Kasey, and you want to build a million-dollar practice. Head on over to practiceofthepractice.com/milliondollarpractice to learn more and to apply. We would love to have you in that group. Also, thanks to band Silence is Sexy for your intro music. And, this podcast is designed by the accurate and intuitive information in the subject matter covered. It’s given to the understanding that neither the host, the publisher, the guests are rendering legal, accounting, clinic, or other professional information. If you need a professional, you should find one.]