Intro now.
My toupee is on, right?
Your toupee is centered.
Centered looks good.
Sturdy, welcome back, man.
Good to see you again.
Good to see you, Jamie.
Good to see you.
So this is what we're going to talk
about.
You're going to do some lessons in this
sort of ad hoc MBA for the health
care provider, the physical therapist,
the clinical owner.
A bunch of these different things on the
syllabus, I think,
would would fit your skill set.
But what's the first lesson you want to
teach?
What's sort of the title of this thing?
Yeah,
this is the financial and operations
dashboards.
So we're going to get into numbers
dashboards,
but really why they matter and then what
to do with them.
I feel like you could have as many
KPIs as you want,
but the more KPIs you have,
they become less K.
Totally.
Yeah, yeah, they do.
I,
I got a bunch of stories for you.
But one of them is, this was a,
I don't even have this one kind of
prep.
But you when you said that, yes,
I had a guy with a two and
a half million dollar business,
he was running with his brother that sent
me a forty seven page report when I
asked for their KPIs.
Too many.
How would you even go through that weekly,
monthly, quarterly?
I wouldn't.
That's exactly what we said.
I asked him, like,
what do you do with this?
He's like, I don't know.
Me either.
It's too much, right?
I mean, it's like,
it reminds me of downtown San Francisco.
They gave me a seventy six page lease
for a twelve hundred square foot spot.
And I'm like, no, it doesn't.
I don't know how.
I don't know how I'm going to get,
you know, taken advantage of,
but I'm going to be taken advantage of.
And I'm not paying a lawyer to read
seventy six pages so we can come back
with these.
We don't like these seventeen things or
whatever.
Like, no, right.
We're done.
So there's information overwhelm.
But isn't that indicative of our entire
society right now?
Yeah, everything's at our fingertips.
So we keep everything.
Yeah,
and we have a hard time sorting through.
So I love what you just said,
because yeah, the key,
we want to focus in on the key
things,
and then we want to interpret them.
So another story real quick,
this is why this is so important.
had a guy reach out to me this
is a one point two million dollar business
about four and a half fte therapists right
um they've spent seventy six thousand
dollars the previous year on advertising
on marketing advertising and i you know
immediately said well why why and and by
the way this is why benchmarks suck okay
um he said well you know i'm supposed
to spend five to ten percent on marketing
and i said who told you that well
the people selling marketing
right of course so that's what worked
right yeah like well that okay
timeout and said, Look,
what I want you to do is go
back and I asked him,
Do you know what a customer acquisition
cost is?
And he he didn't know,
I explained it to him.
And for those listening,
it is what it says customer acquisition
costs,
it is how much does it cost you
to acquire a customer.
So, you know, given the formula said, Hey,
you got seventy six thousand dollars need
to figure out how many people came through
this channel to his credit,
they tracked a lot of data.
So he had
the data.
So he could go figure it out.
I got a text later that night around
six thirty or so.
I was out at my kid's soccer practice.
It was wintertime.
It was dark.
And I remember being there near the
sidelines.
I wasn't running the practice or anything.
But I got a text and said, hey,
you know,
my CAC customer acquisition cost is seven
eighty seven.
Do you have time to talk?
And he's East Coast, right?
So that's like nine thirty at night,
his time.
I know he was stressing out and I'm
like, yeah, sure.
I was talking to him from the field
and he had gone back and looked and
they had acquired ninety seven new
patients over the past twelve months
through this channel with seventy six
thousand four hundred and seven dollars,
whatever it was,
ended up being seven hundred eighty seven
dollars customer acquisition cost in a
practice where they made about twelve
hundred thirteen hundred dollars per case
at around a ten
fifteen percent profit margin so they were
making one hundred fifty dollars per new
patient profit he was literally and again
this is the numbers we're going to throw
it all at you but he was literally
seeing four other patients that he was
generating through his other marketing
channels primarily word of mouth referrals
all that kind of stuff in order to
pay the marketing company for the one
patient
So they were seeing,
for every patient they saw through that
channel for the seventy six thousand
dollars,
he had to see four more new patients
to break even before he started to make
a profit.
And, you know,
that's the thing with marketing every,
you know, I had, you know this,
but I had practiced for over twenty years.
And whenever marketing folks would
approach, I would say, well, this is our,
in our case,
our customer acquisition cost target is
fifty dollars.
If you can do it for less than
fifty dollars, I will,
I will pay you till the cows come
home.
Right.
We will have a years, years, years long,
decades long relationship.
Nobody,
nobody ever wanted to commit to it or
do it.
Very few even tried.
You know, because and and again,
back to that benchmark thing,
we're going to get into some numbers and
show you the dashboard and all that stuff.
But benchmarking against industry standard
or other practices loses your context.
And if you're in a practice that makes
five hundred dollars profit per patient or
a practice that makes one hundred dollars
profit per per patient,
your your tolerance for what your customer
acquisition costs for your marketing spend
and all is different.
right?
Your if your margins are different than
what you can spend is different.
Like for me for to acquire a coaching
client,
if I spent seven or at seven dollars,
I'd be happy.
Because that relationship lasts for a long
time.
I you know,
pay it off in the first few months,
it will then turn into a long term
relationship.
I don't need that many new clients,
you know, all that kind of stuff.
So it works.
But for a PT practice,
show me you know i can name maybe
two that make more than that profit off
a full patient case maybe two right all
right so when you're working with someone
and you say where's your dashboard and
either they show you and it's overwhelming
or underwhelming or they don't have one
where do you start where you know where
do you want to begin this lesson with
kpis
Yeah,
so this is one for everybody to write
down.
is you need basically so in a standard
we're going to go with a standard practice
okay so if you're in um something a
little different if you're in canada if
you don't build units if you have speech
therapists you know they're going to be
some things that don't apply depending
upon you know the specifics of your
practice and again this is why we
customize everything but in general there
are seven seven not seven that's five
seven um
Seven Chinese.
So seven metrics that are kind of the
key from which you can figure out a
lot of their stuff.
Okay.
And I'm saying they're key.
I'm not saying they're comprehensive.
Okay.
But you don't need forty seven pages
either.
Right.
right so we're going to start with real
simple revenue and expenses okay that's
two you know what your gross revenue is
you know what your total expenses are if
you don't have a handle on those or
or aren't able to pull them out and
i've talked to plenty of practice centers
who who aren't they stumble um we'll go
back to that in a minute but
You need to be able to know what
your monthly revenue is and have that
written down somewhere.
You need to know what your monthly
expenses are.
From that,
we can figure out your profit and other
things, right?
We're gonna use those numbers in other
calculations.
But revenue and expense,
visits, and new patients.
Okay, that's four.
Okay, leads, which almost nobody tracks,
right?
Okay,
but if you're spending money on marketing
or effort, by the way,
when I say money,
I'm not just saying meaning money, time,
energy, effort, you know,
all that goes into it.
If you're spending any of your resources
on it, you should be tracking it.
Okay.
But the leads,
and then the other two are the units
so that may not apply to everybody but
the units build for most and then the
ftes and by ftes i mean full-time
equivalent clinical staff all right and
people get really confused by this one too
we're probably not going to do a deep
dive on what each number
means,
but an FTE is forty hours of available
clinical time.
OK,
so if you have a manager that's got
thirty two hours of available time and
they're managing eight hours,
that's point eight.
Right.
If you've got a part time person that's
twenty four hours a week,
that's point six.
So you add those up, though,
because that's going to define what your
capacity is.
And then we use that in looking at
your business design,
because that's the other thing I've run
into a number of times, Jimmy,
is
You know,
people will think that they can grow out
of their anemic cashflow and business,
and that may or may not be true.
And I've had others be like, well,
I have to cancel these contracts because
it's killing me.
And it's not the contracts that are
killing them.
It's the operate, but,
but we need to look at the viability
of the practices.
I've looked at two within the last couple
of months, they're in network, you know,
and of course the big push is everybody
needs to cancel all insurance and
whatever.
They're all evil.
I don't think they're particularly great,
but we're looking from a business case in
your situation.
And in both cases,
if they were run well and efficiently,
they would have,
they would have like an and a profit
margin respectively.
So that's a viable PT business.
You don't have to go cancel contracts.
You got to fix other stuff,
but that's exactly what some of the
numbers and data tell us.
Okay.
Do you want to bring this on the
screen?
Is this something people should be seeing
now?
I have the seven,
people can also go to my website,
Sturdy Coaching and look at connect the
dots.
I don't have those outlined here on this
piece though, Jamie.
The other thing I want to bring up
though, is when we look at these numbers,
like what you've just shown.
So this is a summary,
we'll go over this real quick,
but this is a demo dashboard and I
can send the link to anybody.
We'll put the link in the notes and
give it to you,
but they can look at it.
And this is fully customizable by the way,
right now I'm working on another one that
we're launching today for another client.
later this afternoon.
And this is kind of based on a
true story.
It's anonymized and a little bit tweaked,
so it doesn't give away anybody,
but these are essentially real insights.
So what we've got is year to date
through October, you know,
two point two million dollars in gross
charges, one ninety six in profit,
one point two million in revenue.
We've used bank deposits here.
We do reconcile posted and down below we
looked at posted
uh payments and then bank account to make
sure that there's not a big discrepancy um
that's the other thing numbers allow you
to do is kind of reconcile and make
sure that you're uh you know then what
the billing company is posting and telling
you is actually hitting your bank account
and vice versa right right um but yeah
we can look at things like this like
the the visits and the and the um
new patients and the units give us these
numbers.
So this is a visit per case number.
And as we go across here, you know,
you can see that their target is thirteen
visits a case.
And that came out of an audit.
So again,
it wasn't benchmarked against industry
standard or anything else.
We went through and we looked at their
patients,
the UT's plans of care across the board,
averaged out,
figured out over the course of six months
worth of new patients,
that thirteen is right on the dot for
as far as what they expect people to
come in for.
And then what we're trying to do and
making sure of, oh,
and I don't have a,
here's one thing we can do.
Um, okay.
I got to update that because it didn't
cancel that and go back.
How do I go back dashboard?
Um,
So anyway,
I don't have October's numbers on here,
although they should be.
But they came back up to about thirteen
in the real world.
But what we're looking at is why.
Why are we seeing a discrepancy between
the target number that we know based on
an audit they ought to be getting close
to and
you know,
if there's a three visit a case difference
or two visit a case difference,
that's not only lost revenue.
And this is one of my big,
big things, too.
It's it's are we taking all those patients
across the finish line?
Are we achieving their goals?
So a lot of what we're talking about
here with all of this is connecting the
dots.
And when I say connect the dots,
I don't even just mean the numbers.
I mean,
connecting the dots between the people,
the processes and then the numbers.
The numbers are results.
right?
So this is really a lot of insight
into how well, this is a feedback loop.
How well are you managing?
How well are you running your practice?
How well are the players performing?
Because if you've got good processes,
good plays that get a particular result,
then the players who are doing, you know,
who are doing well ought to be achieving
that.
And that gives me another on this one.
I, uh,
another reason that you should be looking
at this stuff.
I had seventeen PTs in our practice at
one point.
One of them was in the red,
one was in the yellow,
and fifteen were in the green.
The reason that's relevant is the one that
was in the red
By the way,
we go deeper on this and then also
track by therapists,
like where do they fall?
Because when you have this,
you invariably have a few people above
target.
You have some near at target and you
have a few that are below most of
the time.
I had fifteen people above the target.
I had two people below one by just
a little bit.
When I say red,
it was more than ten percent below.
And when I sat down with him and
talked about it,
he told me that it was impossible.
It was unachievable.
so what i did was i pulled up
the other right and everybody else in the
practice across all the clinics was in the
green with the exception of one person who
by the way had been gone on vacation
for five weeks wow so the year to
date she was actually still seeing more
patients than he was um at like you
know two-thirds of the way through the
year and she had been gone for five
weeks wow
So it wasn't impossible.
If you have somebody like that, it's like,
well,
let's hook them up with somebody in the
practice who can show him the ropes,
who can go through and number one,
verify that he's following the processes
that you have laid out and number two,
doing them successfully and comfortable
with it.
And then if there are people choosing not
to,
because there was no other reason
that he was below um you know it
then then you start to make decisions like
do you do you where do you spend
your time and effort do you coach somebody
for how long how long do you work
with them I want everybody to be
successful there are some people and
anybody who's listening this who's
employed people for any length of time
knows there are some people who don't want
to you know and okay but you you
can do that but you just can't do
that on my team right right um
So here's another where we're looking at
the patient visits and then the leads and
then patients per month, sorry,
new patients.
And this is where we get some of
those others,
but we can see over the course of
the year, what's happening there.
And then that ties into our productivity.
So per FTE, we normalize this.
In this practice's case,
their visit number is two-sixteen a month.
Okay,
it doesn't matter if it's one-seventy or
two-sixteen or two-thirty or whatever
yours is, we can look at that,
but they're over productivity for, what,
six months out of the first nine months
of the year, right?
So then we look at things like the
conversion rate is a little lower,
and I happen to know that the October
goes even lower to sixty-three percent.
Our target's eighty-three.
And we'll get to what that means in
a second.
But this is that lead number and the
new patient number.
But we look at why is that?
Is the front desk not doing their job?
Are they not selling?
Are they not getting people in?
Are people flaking out or not showing up?
Or are we over capacity so that there's
no room on the schedule?
Good point.
Right.
But that's exactly where we're talking
about the connecting the dots in two
senses.
One is interpreting the data because I can
go yell at my front desk or figure
out or do remedial training or whatever
because they're not converting.
but what if there's no room on the
schedule?
It ain't their fault.
So I wanna make sure as far as
like what I'm doing and running the
business that I look at the different
aspects and I tend to start with a
process,
like is the process being followed?
And then a personnel is this person or
a couple of people not really doing it.
And then we get into other things.
But in essence,
let's step back for a second.
When you, if you run your business,
like you see a patient,
like you treat a patient and you use
the SOAP format, right?
Most owners are basically stopping at the
S, the subjective.
They get the story,
they hear the stuff from their team,
they hear the anecdotal, whatever,
and they jump to an assessment and they
create a plan.
And the problem is if they don't
cross-reference that with the objective,
Right?
You don't just take a patient's word for
it.
You have a hypothesis in your head.
You have a differential diagnosis after,
you know,
a patient comes in and tells you,
and you've observed a couple of things,
which are also objective, right?
But you start adding in the objective
pieces and you verify or refute your
hypothesis.
Then you come up with an assessment and
a plan.
And that's really what a lot of the
numbers are and what it can tell you
is if you have a dashboard, you know,
what, what,
We know where to look because it's not
on target, but why?
We need to figure out,
we need to diagnose why.
And if we have a capacity issue that
is going to impact our conversion rate,
it's also gonna impact our visits per case
number.
But if we don't diagnose it correctly,
therapists need to see more patients.
No, they don't.
Front desk needs to convert better.
No, they're trying.
Right.
So, so it's, you know,
it's not just the forty seven page report
or whatever.
It's also this kind of integration and
understanding and looking at all this
stuff that allows you to interpret and
then take the right action at the right
time.
What are you using technology wise to
track phone calls?
Is there something that you're using or is
that just something that's calculated
somewhere else?
It's a process thing.
It depends.
I mean, there are some,
depends on what platform you're on.
You know, with some EMRs,
you can create a case with each phone
call.
So there are others.
I have a client that they still insist
on doing all the intakes on paper.
So it goes into the paper log and
at the end of the month,
they count up the number of leads.
Because all we're looking at when we're
saying leads, right?
I'm not trying to overcomplicate this.
Leads, I'm looking at inbound leads.
Let me see if I've got it down
here.
When we look at the inbound leads, right?
What we're looking at is fax referrals,
email, online inquiries, phone calls,
any and all of it.
right and then the other thing that this
allows you to do jimmy is you set
a baseline so like we just said running
your business like like a soap note
gathering subjective information objective
before you come up with an assessment and
then that before you come up with a
plan that will allow you to be more
disciplined in your decision making but
there's also a baseline for test intervene
retest
That was the only rule in my PT
practice for twenty years.
We had people very eclectically trained
from different backgrounds and whatever,
but the one rule we had consistently was
test, intervene, retest.
Whatever you're doing needs to get a
result.
And if it doesn't, then switch gears,
ask for help, do something else, right?
We've got to get results.
So the same thing's true here.
What if that guy, you know,
before he spent seventy six thousand
dollars, and by the way,
that was like the second or third year.
Right.
So we're talking two hundred grand plus.
But what if what if in the first
three months he was looking at the
difference in his leads?
know i i go and i hire a
marketer and i'm running at a hundred and
fifteen hundred and twenty hundred and
thirty leads and then um you know one
thirty seven one fifty three one fifty two
i happen to know october is one fifty
six well guess what we started a new
marketing effort well leads are up thirty
percent thirty thirty you know thirty per
month okay
is that worth it well not if we
don't have capacity but but if we have
capacity and we're putting more new
patients in if we're converting eighty
three percent of one hundred and fifty six
instead of eighty three percent of one
hundred and fifteen that's significant
right so you know there's a bunch of
math kind of that i mean that and
that's in part to why people like hire
somebody like me um
Because after running a practice and being
able to do this,
I can look at this stuff and kind
of go, yeah,
this is what we might want to be
focusing on.
This is where it might be happening.
Let's go through and test that idea.
Make sure that that's actually the case.
Because I'm not professing to have all the
answers,
but we can certainly get there a whole
lot faster.
And this dashboard,
is this something you built?
And this is what people use when you
work with them?
Yeah.
I mean,
it looks like it's pretty complete.
Yeah, I mean,
we're going to be to this one.
And this, this has been tweaked.
This is a,
I made a copy of this a month
ago.
So we've actually added a couple things to
the real clients.
But among them is that visits per case
by therapists,
we've added that data in and a tracking,
I got a couple more things to kind
of share on here.
But that whole concept of connecting the
dots.
i was uh talking about this with matt
matt fitzsimmons is my co-author on the
books back here and stuff and was my
business coach back in like and uh he's
in new zealand right and i was we
were talking about bringing on doing some
kind of small group for smaller practices
and bringing in a a bookkeeper cpa
bookkeeper accountant type person a
marketing person a compliance person and
kind of doing a group right and um
I realized that we were talking past each
other on some of the bookkeeping stuff,
accounting stuff.
And I'm like, wait a minute,
what do you mean?
And his assumption,
because in New Zealand they do this,
and I've since talked to a couple of
people in the UK and they do this,
the accountants and bookkeepers and all,
they also look at the operational metrics.
So if you're running a cafe,
they'll look at the tables turned over,
the ticket, you know,
the people per table, the ticket,
average ticket price,
they'll help you to see where your
operations could potentially improve your
finances.
And ours don't, right?
And I know that not just in my
personal experience and people I've worked
with, but once I learned this,
I started going back to, hey,
And I've interviewed over a dozen
bookkeepers and accountants in the PT
space who work with therapists about this,
about how many visits and do you ever
look at that stuff and tie that back
to their operations or their employees to
their expenses and what have you.
And they just look at me like I'm
speaking Greek.
They're totally confused.
i'm sitting there going well but how you
know if you're only dealing with the money
after it's happened what kind of value can
you really bring to me right all they're
doing really is submitting a report and
telling you what you owe your accounting
right but and this so this was the
disconnect right we started about the
managerial accounting which bigger
companies like you know work with a big
corporation they have managerial
accountants
Right.
They hire people to do that.
But in small business,
at least here in the U.S.
and I believe in Canada,
there isn't any there's a there's a big
gap in the market.
There's a big gap here that could help
people connect the dots.
Again, when we're looking at expenses,
you know, everybody wants to do gap GAP,
you know,
accounting and their tax and da da da
da.
And it's like it's simpler than that.
know for your for managerial decisions
we've got three buckets we've got your
profit we've got your expenses what really
your your personnel and your overhead so
this is total expenses this is two of
the buckets personnel expense in green and
overhead in purple and this is our total
expense and we put that up against the
total revenue and the difference between
the expense and revenue is our profit and
there's your three buckets
Right,
but what we can do here is we
can look at, well,
why was my personnel expense higher in
April?
And once again,
it doesn't necessarily tell us what's
wrong, but it tells us where to look,
right?
And he happened to have,
that was the magic paycheck month and some
other stuff, right?
But if I'm looking at my overhead,
it should be relatively steady.
And if you see like, twenty-five,
twenty-three, twenty-one, twenty-five,
twenty, you know,
that's what I want it to look like.
I don't want my overhead bumping around
because that's the way I break these down
is overhead is anything that won't change
when you hire somebody or let somebody go.
So what should fit under overhead?
Things like a lease?
Anything that doesn't change.
HR.
Okay.
Yep.
If you've got a contract with somebody,
if you're Yeah,
your phones won't change your other now
personnel bucket,
people get a little bit more look,
it's a little more complicated,
because it's anything that will change.
So if there's software licenses,
or a billing company,
like percentage revenue of whatever you
have collections,
but you're increasing collections,
because you've added a person,
then all that stuff goes into personnel
into one bucket.
because it's gonna go up and down as
you scale, but the overhead doesn't.
So then our incremental gross profit is
different, but like, you know, con ed,
professional dues, if you pay for those,
work comp, insurance,
disability insurance, taxes,
all that stuff goes in the personnel
bucket, because it's tied to people.
And then, and then for all of these,
by the way, too,
we set targets and some of these,
I have the target, you know,
outlined like on this revenue.
Well, this has cost per visit.
I have since updated for the clients.
In this case,
the revenue per visit target is, is one,
and the cost target I think is and
we put a straight line across at the
and the so they can compare to the
targets.
then if you're hitting target and
everything's cool this month great enjoy
it because it won't last and if it's
not you can you at least know to
start to look for something a leak or
something yeah and you start to and you
feel more confident too as an owner and
i can attest this personally knowing that
where i'm looking is going to have an
impact on the business
right like um i can look at my
age of accounts and as long as i'm
in like twenty six is a little high
for them they should be around twenty
three twenty two um but that then you
ask the question okay in february twenty
six why what happened it's not huge but
it's like it better not be higher than
twenty six in march because now we're not
collecting the money that we're billing
out
right so you start to see you can
see trends but if it's you know bumping
around in here that's that's pretty cool
yes we talked about the bookkeeper the
test intervene retest is huge the other
one and I know that Dave and I
are going to do a thing on valuations
but when
I bought a couple of practices in the
past and I sold my practice.
Certainly looked at a whole bunch of
practices to buy and not just for me,
but working with a couple of people to
buy practices.
And when we ask for the numbers, right,
it often turns into a fiasco.
because like you said, well,
where do you get them?
Well, some come from QuickBooks,
some come from the EMR,
some come from the bank account,
some you have to figure out with your,
that's like your staffing or HR with your
FTE number, all that stuff.
But you bring them all together and
usually that ends up taking weeks and
especially if we want the last three
years,
it takes a long time and we have
to get them to give it to us
in a format that I can then do
stuff with and whatever.
What if you had all this and you
had a summary?
Like, here's your year to date summary.
This is the first three quarters we can
extrapolate out.
But, you know,
we've charged two point two five million.
We've posted almost one point to our bank
deposits.
Now,
this is a little different because they do
rent out a room or a room to
a massage therapist and some stuff.
So those are a little bit different,
but total expenses at a million.
So you should see you should see posted
and bank deposits.
In theory,
they should be the same thing if
everything was running standard.
They should.
Well, hang on.
I will.
That's a great question.
Stick a pin in it for just a
second.
Okay.
But in their case,
they also have operating income.
So that's like the rent that they collect
versus the
know the pt operations and then i have
other clients that have like you know this
would be thirty thousand dollars from
pilates and one ten from pt or whatever
right um but then you got your total
profit margin and you can look at all
this well if i'm if if you were
looking to sell your practice and um you
know they said well can i have your
numbers you can export this into a pdf
and send it to them and if you
did this for the last three years how
simple would that be
You know, and again,
we'll talk more evaluation,
but what do you think that does to
your evaluation?
Right.
If someone can trust your numbers and can
clearly go backwards, forwards,
up and down with your numbers and see
how you got them.
Yeah, these numbers look great.
How'd you get them?
If you can't explain how you got them,
I don't trust the number.
right well and if they're consistent
across time and if you you know yeah
and if you can yeah this is how
we run things this is why we have
you know the success we do whatever um
it's and it's a piece of the puzzle
right this isn't the end all be all
you can't solve all your problems through
the numbers because we've got to be able
to translate these back into the language
of the therapist you know again like that
visit per case number i can't tell my
therapist see more visits
That doesn't translate.
What we have to do is go in
and figure out, okay,
so what is our process?
Are they following it?
Are they getting buy-in from the patients?
Are they doing the blocking and tackling
and following up with people who've fallen
off the schedule?
We have all that stuff in our standard
operating procedures.
Are they doing it?
And what can we do to help them?
And that's really my job as a manager
or founder,
is I need to support my players.
I really take the coaching model seriously
in that if I put people in the
best position to succeed and I give them
everything they need to succeed,
they're more likely to succeed, right?
The score will work out.
But here,
let's go back to your question about
posted payments and bank deposits.
This is a little broad right here,
but generally what you're looking at if...
you know, we're looking at this,
is this bottom line,
there's actually two lines there are bank
deposits and posted payments.
And what we want is for that to
be pretty close month to month to month.
And if it goes bank deposits higher than
payments by two thousand,
Then there we go.
Bank deposits by two thousand.
What we want is that not to accumulate.
So we're seeing that does kind of raise
the question if my bank deposits are
always a thousand or two thousand more.
Why is that?
Is stuff not getting posted?
In this case,
they're collecting a little over a
thousand dollars a month in rent.
Got it.
So it's always in their case specifically,
it's going to be off by about two
grand.
That's okay.
But in general, yes,
it's a check and balance because if I'm
depositing more than I'm posting,
I'm probably sending out statements to
patients for money they've already paid,
which ain't gonna make anybody happy,
right?
Or if I'm posting a lot more than
I'm depositing, where's that money going?
Because if it's not going to my account,
what's happening?
And that's relevant because I think this,
I don't know if anybody's done PTs,
but north of thirty percent,
I think it's closer to fifty to sixty
percent of physicians in private practice
will be embezzled from in their career.
You know, it's crazy, but,
but it's because they're not looking at
it.
It's that whole bank balance accounting.
If I have enough money in my bank
account, then everything's cool.
And they trust everybody because,
you know, once again, they're trustworthy.
So why, why wouldn't everybody else be?
And that's simply, you know,
not the way the world works,
but so can I,
hit you with a couple other things go
for it so what we what we do
with all this and I'm going to kind
of connect the dots back with you so
we have a summary we go through we
talk about it but really we're
interpreting it so if you understand your
numbers and you can get your head around
it and have it be you know broken
down piece by piece by bite so it's
not overwhelming because all of this stuff
by the way comes from
like a spreadsheet like this, right?
And when you have the spreadsheet like
this, I'm sure you know this, Jenny,
but there are two ways to scare away
a therapist,
pull up a spreadsheet like that, right?
Or talk about sales.
and either one of them you know you'll
hear the tire screeching they're out of
there real quick but so what we're trying
to do is make this digestible and focus
on one piece at a time so that
we can take action everything's cool great
we leave it alone move on to the
next one but you but you do that
by setting targets and what's kind of
acceptable um so we know that we've been
below target here for a while why is
that well you know again we're back to
the productivity thing so we look at these
things from you know multiple sides
It allows you to track your performance
and look at what your potential is and
see if you're actually achieving it.
And then, excuse me,
the ultimate goal though is to empower
your people.
Because if you're running it,
if you're the founder, you're a manager,
you're a manager of managers,
or you're teaching managers,
or you're just managing a small team,
the better you can support them through
the processes and through the resources
they need to succeed,
the better your numbers are gonna turn
out.
So when you go with a coaching client,
I'm guessing you walk through with each
where all this information for each one of
these KPIs comes from,
like how a bill becomes a bill,
where do we get this number?
How is it generated to make sure that
information is coming in clean from where
it starts?
Yeah.
And they actually have a pretty simple,
it's still a spreadsheet.
We have to kind of get them over
that part,
but a simple spreadsheet where they fill
in not just seven,
but more like twelve numbers.
they plug those in each month and we
also we make a key you know these
two are from quickbooks or these three or
whatever three are from quickbooks and
then this is from your bank and this
is from the emr and then you know
this is hr your your staff depending on
how big you are but yeah it's not
a lot of numbers but
what what it what it allows us to
do is then get into these these ratios
and calculations and targets and compare
and see are are we cool so i
really do like the idea of the dashboard
because if you're driving your car you
know on a trip this weekend without a
dashboard what i mean
Yeah.
What, what do you, what do you,
do you know what's going on?
Right.
Do you want,
am I following the speed limit?
You know, do I,
how much gas do I have left?
Is the engine light on?
Am I overheating?
There's all this stuff where, you know,
if things are cool and everything's kind
of in zone, okay, that's cool.
You're good.
You're vibing.
Go.
But if, if it's not,
we need to know that before,
before the car blows up, right.
Before the engine blows up.
And yeah,
that's why I'm so passionate about this.
When we first started doing this,
let's go way back, right?
Twenty plus years ago,
when I started the practice,
got a partner,
opened the first kind of joint location,
hired the first person.
It did not take very long at all.
And I'm saying very long at all.
It might have been hours where I realized
I didn't know what I was doing.
Okay.
Which was weird because I had an
inordinate amount of confidence because
I'd done every job in the in APT
company, you know,
except an assistant and except owner.
Right.
So I'd been a PT,
I'd been front desk, I'd done aid work,
I'd done billing, I'd done, you know,
I've done back office,
I've done all this stuff.
So I thought I had a better handle
on it.
Never managed people, though.
Right.
And with the first hire,
think a lot of times we make assumptions
and not even the first time the fourth
and fifth and sixth hire we assume people
are going to do what what what we
do meanwhile we don't have stuff written
down we haven't told taught them very well
we think training means to shadow somebody
for a few days and they'll pick it
up they'll figure it out and that's just
a terrible way of you know it's not
setting people up for success
So, you know, I learned very quickly.
I didn't know what I was doing.
So then we spent the next decade plus
figuring out what we were doing and
learning and really intentionally using
that business to learn about how to run
a business.
you know, and through multiple things,
some formal, you know,
hiring a coach and working with people,
some like through organizations like EO
where learning was a big, big deal.
And you could, you know,
network and learn from both from your
peers and also from experts that we
brought in to speak and talk.
And, you know,
there were other opportunities there,
but really intentionally,
deliberately learning parts and pieces all
the way along the way and then putting
those together.
And, you know,
when we're looking at those,
those numbers we can blame it the business
for case numbers off a little bit we
blame it on capacity but are we making
our patients happy are all those patients
getting everything they need or are we
kind of rationing because we don't have
the capacity right and we should be hiring
somebody
So what this all is meant to lead
back to is not to make things more
corporate,
not to make things colder and drier and
whatever,
it's really to connect the dots and make
sure you have happy patients,
there's more of them achieving the goal
and getting across the finish line,
which by the way leads into happier staff,
Because why did they become PTs?
Right.
And there's all this burnout and all this
whining and complaining and lack of
appreciation.
Well,
if all my patients are achieving their
goals and telling me how great I am,
what's my what's my burnout level versus
people dropping out or people not being
able to get in or that type of
thing?
Right.
And then if I do that,
if I have happier patients and happier
staff.
You know, for some reason,
I also get to make more money.
Biggest mistake with KPIs from someone
who's beginning to work for you,
what are they?
Oh,
the most common is they don't track leads.
So they're spending time and energy effort
on money on marketing or some kind of
effort,
and they have no idea if it's working
or not.
They're measuring it by new patients.
And there's a couple of steps in between
there that could be, you know,
like there's an intake process,
there's a scheduling process,
there's that stuff that could be breaking
down.
You could be generating more leads.
You don't even know it.
So I think that's the most common place.
um the other one is i don't see
people i don't see very many people
looking at their um visits per case number
and they you know they're so like in
this case of the practice we just kind
of showed you their schedules are busy
their therapists are productive they
wouldn't ever even notice that they might
be under treating the patients that
they're taking care of
And again,
you go back and you can verify and
we can assess,
but it makes us start looking at, well,
are the patients achieving their goals?
Are the patients happy?
And you can add NPS into this and
do some other stuff with it.
But if the patients aren't getting across
the finish line,
then you will end up having gaps in
your schedule eventually and be able to
fill them with more new people because you
lose the old ones.
But I think it's a matter of
interpretation and not really looking for
help because, I mean,
I guess this is one of my pet
peeves too.
It's like,
we go and start a business and you're
supposed to learn,
you're supposed to figure out management,
right?
You're supposed to figure out marketing.
You're supposed to figure out how to run
and look at your numbers and stuff.
And just because they're smart people
doesn't mean you can,
Not even that you can.
It doesn't mean that you should reinvent
the wheel and figure it all out for
yourself.
There are lots of people who have done
this stuff before who, you know,
the trick is finding a trustworthy,
you know,
group or people or whatever that you can
rely on to help you with that piece.
And it should pay you dividends over and
over and over again.
Right.
I see you were asking about mistakes.
There's a lot of them, right?
Another one is not wanting to spend a
little bit of money to make a lot
more money.
like very close to the chest, very like,
well, I don't see the payoff.
Well, here's the payoff.
I mean, if you could do this,
we can calculate what the payoff is.
Is it worth it?
I mean, you should be getting an ROI.
Everything you spend in your business
should be returning something back to you,
usually more than what you're spending,
unless it's like insurance or compliance
or something like that,
where you know you have to spend it.
But essentially everything else ought to
be getting you more money back in than
what you're putting out.
And if it isn't,
you shouldn't keep doing it.
if someone has uh you know they've left
the shore they're three years in they
haven't been doing something like this and
now they might be i mean if i
if i were if i had a clinic
and i'd been figuring it out for three
to five years i'd be super i don't
know ashamed or i'd be awkward or scared
to so then sit down and bust open
the books almost scared of what i'd find
under the hood
do you talk what do you say to
those people where you're almost like i
don't even want to know about it i'm
just going to keep pressing forward what i
don't know can't hurt me and we all
know that's not right you have no idea
how common that is right and not just
not just three years in i've i've gotten
people fifteen plus years in who you know
come hat in hand tail between the legs
like but they're but they're but they're
coming i know there are a lot more
that don't right out of embarrassment the
first thing i say to all of them
is it's not your fault
You weren't taught any of this, right?
And it was thrown at you.
And like we just said,
you're supposed to figure it out.
Well, while what?
While you're treating patients eight hours
a day and dealing with staff and the
chaos that is Medicare and the insurances
and all the rest of it and the
billing company and the EMR and the
vendors and the supplies and the landlord.
I mean, there's too much stuff.
right?
So yeah, number one, don't be embarrassed.
There,
there's nothing at all to be embarrassed
about, right?
Um, it's not your fault.
You, you, you,
you signed up for something, you know,
you did, whether you thought so or not.
That's how I learned.
When you start the business,
you signed up to be the coach.
You signed up to be the leader.
You signed up to pay the bills to
do, you know, to do all this stuff.
You just maybe, you know,
to learn marketing, to do whatever.
But, um,
yeah you take it one piece at a
time don't get overwhelmed reach out get
some get some help from experts and uh
You know,
there are people that are trying to do
compliance all on their own.
There are some great compliance people out
there that can make it really,
really simple and save you a lot of
time and headache and the rest of it.
Right.
Try to do your taxes on your own.
There's CPAs and stuff that can do that.
And again,
make it simple and what have you.
Right.
So, so use, use those experts.
It's what they do.
It's what they've done.
It's what they're good at.
Just find, find the good ones.
That's all.
When I started my podcast, ten years ago,
I would look at numbers
daily,
sometimes multiple times a day to see what
was going on.
I now look at like big picture numbers
like downloads.
Sometimes I forget to look at it for
a month where I'm just, I'm just like,
I understand I'm doing the thing.
And then I look up and say,
how'd that go?
Because if I keep looking at the numbers,
I'm adjusting course way too much.
It's called a course.
It's long term.
So how often do you tell people to
look at numbers?
What's too much?
What's not enough?
Where's the sweet spot?
Because I don't want them every day to
be living in the numbers, I'm guessing.
No, no, no, no.
No, you're exactly right.
And we have an analogy.
I don't know if you can see up
on the wall there.
That's Laguna Seca.
on the track there's my first porsche
sorry i hit the hit a button um
so uh yeah i teach autocross or taught
autocross for a long time and the uh
The first thing after showing them how to
set up their seat and their seatbelt and
their hand position is to look up because
when people are driving,
they look at the corner,
they look at the cone and then they
make it past that and they look up
and it's like, oh my God,
it's a surprise.
Well, you look farther ahead, right?
The whole course slows down.
They feel like they're going slower.
They feel like it's smoother.
Smooth is fast.
time starts dropping off right as soon as
they can look out and see anticipate so
yeah it's exactly it don't stir the cones
don't obsess over the numbers um the the
right cadence the right frequency depends
okay um and and some of it depends
on how bad things can get so it's
not even the same frequency for the same
number
it depends on the practice.
So if I've got a practice,
one practice I started working with was
fifty two therapists.
Well, we want to look at the numbers,
some of those numbers weekly,
because if something is off track,
we need to know sooner rather than later.
Right.
I've got somebody with three therapists.
We're working on more, you know, monthly
there's kind of a tipping point when they
get into ten, twenty, you know, PTs,
I want to kind of update that monthly
numbers report twice a month.
might want to look at my leads every
week i might want to look at things
a little bit differently it also depends
on what i'm doing so one of my
quarterly initiatives is marketing effort
and generate new leads i'm going to want
to look at those a little bit more
frequently and start to make you know
quicker course corrections if i just spend
a bunch of money on an ad or
something else and i don't see any return
right so it really varies a bit but
but in general you know like this
dashboard i showed you we're doing it
roughly once a month with just about
everybody some of them were doing an
update in between and looking at run rate
so that's a whole nother run rate is
basically your speed like miles per hour
so if i have my first five days
i've got you know five hundred visits in
the first five days and they're twenty one
days in the month then i'm gonna have
twenty one hundred visits if i continue at
this pace right so
can extrapolate out a little bit then i
can monitor and see if my predictions are
right or not um but uh
It depends.
And sorry,
it's not a clearer answer than that, but.
No, I think it's good.
I'm curious about this since we're talking
about KPIs.
Is there one KPI that surprised you either
in how important it turned out to be
or how unimportant?
Like over the course of you doing this,
was there anything you ever didn't look at
and started to and realized it was really
important or used to pay attention to and
eventually you were like,
this is not important.
Totally.
Yeah, I got answers for both of those.
And one of them is going to shock
everybody.
Okay.
The first one that I learned to appreciate
that I learned was really,
really important.
And not just because it told me how
my marketing efforts were,
but it was a leading indicator for how
many new patients and how many visits I
was likely to see next month is the
lead number.
because if I can predict,
if I get a hundred leads and my
conversion rate's at three percent on
average,
I'm gonna have eighty-three new patients.
If I have eighty-three new patients at
thirteen visits a case,
I'm gonna have whatever that is,
a thousand visits or eleven hundred
visits, right, in the next month.
If I can do that and my AR
is twenty-eight days down the road,
I'm gonna get that much money four weeks
later.
So I can start being predictive earlier
based on, you know,
the farther back I can go,
with like my lead generation,
I can then know roughly how many new
patients I'm gonna have,
how many visits I'm gonna have,
what my cashflow is gonna look like in
thirty to sixty days.
Okay, so yes,
that's critically important and very few
people are looking at it or tracking it.
It's not too hard to track.
You just gotta get your team on board
with doing it.
And to do that again,
that connecting the dots idea,
you can't just tell them we have to
collect leads now.
They need to understand why,
why it's important.
they don't understand how it contributes
and how it makes your life easier or
lets you know whether to spend more money
on marketing or predicts you know are we
do we need to hire somebody else or
whatever right why are they going to do
it
You gotta paint the picture for them.
The pictures in your heads,
in your head as the founder or as
the person running it,
those pictures are not anybody else's
head.
That's part of your job is to get
those pictures out of your head into their
heads, right?
So that's the one that I think is
really important.
I have it as one of my seven.
I don't see very many people looking at
it.
I definitely don't see the marketers,
you know,
they're telling you about awareness and
clicks and what, Jimmy,
if it ain't turning into paying customers,
I don't care.
right right i don't care how many
followers i have on instagram if if i
don't have enough new patients or clients
right right so anyway that's that's the
one the other one this is the one
that's going to piss people off cancels
and no shows because if my visits per
case number is cool and i don't have
a bunch you know of gaps in the
schedule because like a bunch of late
cancels no shows but like the cancellation
rate everybody's obsessed with that but if
i'm moving thursday to friday
or Tuesday to Thursday and I'm still
getting that visit in,
the patient's still getting what they need
and I don't care.
And if I've got the demand and I've
managed my waitlist stuff,
I can fill that Tuesday spot that they
moved as long as they give me twenty
four hours or whatever more notice.
And then now there are, you know,
I was working with a company that
automate that automate that waitlist
thing.
So if somebody canceled it immediately
went out, you know,
via text to a bunch of other people,
anybody on the waitlist and they pick it
up, I mean, cancellations,
things like that get filled in.
I mean, it's going to happen.
I just,
I'm worried about how many of them are
showing up, how many people are on,
you know,
on the schedule and are they finishing
their plan of care?
Cause then if they achieve their goals,
what are they going to say to other
people about PT?
Right.
How many people have you run into like,
oh yeah, P two didn't work for me.
If you drill down just a little bit,
right?
They didn't show up.
They didn't come.
They didn't understand why that, you know,
there's all this stuff, but they,
did they finish their plan of care and
it didn't work?
Not very many.
Right.
So here's a question for you.
This is more a management or translation
question.
You discover there's a KPI that you're
monitoring.
a change needs to be made.
How do you translate numbers into action
for a team?
They're not in a spreadsheet, right?
And you don't want them in a spreadsheet.
These are, you know,
or the front desk staff,
like help me understand how you approach
translating the thing that, you know,
it's kind of like when you're in the
movie, the matrix,
you're looking at all the ones and zeros
scanning by.
Okay.
Now you understand that you've got to
translate it to someone who isn't reading
the matrix.
Well, I mean,
it's so it's the same thing as like
a little league coach realizing that,
you know, little Jimmy's not hitting.
Right.
His batting average is a ninety two.
Right.
Well, you don't go and tell.
So we all in some way.
Right.
But yeah,
but you don't you don't go to that
kid, that player and say, hey,
I need you to be hitting to eighty.
What does he do with that?
You know, so, so yeah, they don't know.
And, but, but again,
the beautiful thing about therapists,
about PTs in particular,
but it's a strip OT speech,
you name it.
When you're looking at a movement, right.
Or an ADL or whatever,
you're breaking down the component parts
and figuring out which one's not
happening.
And then you're focusing on that and
fixing it.
And you're,
you're coaching and you're repeating and
you're practicing.
You do the same thing with your staff.
So if you don't have a process to
do something,
like get a buy-in to the plan of
care,
then how do you know if anybody's doing
it?
And if you're trusting everybody else to
do what you do after fifteen years of
practice or whatever,
you probably have learned a few things
that the person who's two years out of
school doesn't know.
So write that stuff down, go over it,
train it, practice it,
have it be part of the onboarding
induction process, go back and review it,
repeat.
But this is the other thing,
like you said, translate to your staff.
A lot of times you don't.
And what I mean by that is you
don't go into the staff meeting at a
client doing this.
I keep telling them all what to do
and they won't do it.
like okay how are you telling them we'll
go in a staff meeting with forty five
people right and i tell them dude if
i've got three like what we did was
we broke it down we looked and there
were like three people that were below
standard on their visits per case right
there were and of the forty five people
like almost twenty were therapists right
but then there's like a group of twelve
or so that are right in there right
in the zone and there are a few
that are over ironically jimmy
maybe it's not ironic maybe this will be
self-evident to a lot of people to me
it surprised me every time i see somebody
seeing the more than the visits target
business per case target they're a veteran
therapist who communicates well who really
works and their patients achieve their
goals the patients will bend over
backwards for them because they do the
same for their patients
And if I've got a target of twelve
visits or eleven visits,
in our practice our target was eleven
visits a case,
my best therapists with the most
experience were consistently seeing
thirteen to fourteen.
And it wasn't because they were less
efficient.
right it's because they were actually
connecting with patients and helping them
get fully across the finish line and uh
in that case what's that person thinking
if i'm bringing that up in staff meeting
about hey we're not hitting our visits
target not hitting our business number
everybody needs to do better they're
sitting there going i'm i'm killing it
Why are we spending time on this?
So a lot of that goes into the
one-on-one meetings, the coaching,
the talking, the bringing it up,
and then the blocking and tackling are,
you know, is there a process?
Are you following the process?
Let's go through, let's role play it,
let's see.
Because again, that kid who's batting,
I need you to go into the cages
and work on your swing this week, okay?
Yeah, I'll do that.
What happens when they come back,
you know, next practice?
Hey, Jimmy, you been to the cages?
Yeah, coach.
Is that the end of the conversation?
Shouldn't be.
No.
Okay,
get in there and let's take some hacks,
right?
I want to see it.
So you show me, and by the way,
people do this, we do this,
therapists do this with their patients
every day.
You don't watch them do their home
exercise programs.
You don't need to sit there and monitor
your people at the front desk or whatever,
or sit in on the vows.
Show me.
You know within the first five to ten
seconds whether or not they're doing what
they told you they're doing.
It's literally that simple.
Show me.
Take me through that.
Walk me through your process.
Can you find the process?
I don't know.
It's in the playbook.
That means they ain't looking at the
process.
Right?
So, I mean, it's...
Once again, this is, as a founder,
what you signed up for,
is being able to translate this stuff.
Whether you can do it well or not
is not relevant at the moment,
but it is part of your job description,
and that is one area where you will
need to get good.
parting shot for this.
What I'll also do is I'll include a
glossary because I think what happens is
people get lost in the jargon sometimes.
So I'm going to include a glossary.
I'll include that in the show notes as
well.
Just a lot of the terms that we
either use today or other KPI terms.
But what would your parting shot be for
this KPI episode of the DPT MBA?
You gain additional insights and you
translate them into ways to inspire your
staff.
Because and then and then that leads to
happier patients.
So happier patients, happier staff,
healthier business.
It really is about connecting the dots.
I know we went into some depth on
the numbers in the dashboard.
But if to your point,
if we don't bring those back to what
do we do with them?
How do we make change from them?
Then I mean,
you look at numbers all day long,
it doesn't matter.
We'll have more from you on this course
as well.
But if you want to get in touch,
you can find them at SturdyCoaching.com.
Sturdy McKee, entrepreneur,
business coach, and, well,
in charge of the six-hour CEO.
Thanks for scratching the surface.
Like, you're giving the surface scratch.
If you want to know more,
hire someone like Sturdy,
and they walk you through these things so
you feel, I'm guessing,
confident and competent.
Totally.
Yeah.
And yeah,
just more secure in your decisions that
you're doing the right thing.
And then, you know,
when people see results, Jimmy,
that's when it's like, oh, it's working.
I mean, again, it's the same thing.
It's just like what your patients say.
Oh, those exercises you gave me,
they really work.
It's like, yes, if you do them,
they do.
Who knew?
We knew.
That's why you came to us.
Sturdy,
appreciate you taking a shot at this KPIs
for us.
All right.
Take it easy.
Thanks, Jimmy.
Thanks, everybody.
Bye.