The Lie No Chiropractic Coach
Wants You To Know!
Since the beginning of my chiropractic career I have heard coach after coach brag about their gross collections. When I was younger and not as educated in business, I would be very impressed by their huge numbers. Then as I learned about business I realized gross collections mean nothing and net profit is the only number that matters.
Gross means nothing!!!!
Gross is a number on paper. Net profit is what you have in your bank. I now find it hilarious when people brag about their gross collections and volume because neither one mean anything. So what if you gross a million dollars, what are you actually profiting? The magic formula Dr. Fred created was to run your practice at a 75% profit margin. This means your average weekly collections cover your average monthly overhead. It is a very fun, easy and relaxing way to practice.
Simple but not easy.
It takes a tremendous amount of discipline to create a practice that runs at a 75% profit margin. The practices with 6 employees and hundreds of square feet that are not being used all have to be paid for and that reduces your net profit. In Texas they call large gross businesses “Big hat no cattle.” You want to have no hat but a lot of cattle.
How do you make this happen?
This is the take away from this message. It is better to be a little uncomfortable because your office is slightly too small or you don’t have quite enough staff or equipment but be extremely profitable, than the alternative of very comfortable but minimal profit.