E569 | Safe Businesses Are The Best Businesses

In today's short lesson, I address whether brick-and-mortar businesses are outdated compared to online businesses. Cash-based practices are predictable and can be quite successful, with many reaching a top line of $250,000 within two years. I dig into the advantages of a cash-based private practice. Enjoy! 

• The speed of business growth
• The benefits of Physical Therapy over other business structures
• The benefits of a slow and steady business model

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Podcast Transcript

Danny: So I was having a conversation with one of our staff members about documentation and he had come over from a in-network practice that he was working at and he was talking about just how long it would take him to document and click through and the workflow and how, just how time consuming it was and how much easier it's been with the software that we use, which is PT everywhere.

And I know for us, we're very aware of. Sort of time leaks within our staff and our own schedules. And it's just one of the worst things you can do is just waste time on things when you could be doing them more efficiently. One thing for us is we have to document. It's something we need to do and you need to do it as efficiently as you possibly can because that's where you're gonna save a lot of your time.

We were seeing our staff members save upwards of an hour a day as far as cleaning up his documentation, making it more efficient. What if you got an hour of your day back just from documentation? What if all of your staff did the same thing? Highly recommend you take a look at PT everywhere.

It's been a huge time saver for us and really has made a big difference in our efficiency of our practice. You can check 'em [email protected]. I think you're gonna really like what they had to offer. So here's the question. How do physical therapists like us who don't wanna see 30 patients a day, who don't wanna work home health and have real student loans create a career and life for ourselves that we've always dreamed about?

This is the question, and this podcast is the answer. My name's Danny Matte, and welcome to the PT Entrepreneur Podcast.

What's going on guys? Doc Danny here with the PT Entrepreneur Podcast, and today we got a short lesson learned for you. Something that I want you to think about as you're building your practices or if you're thinking about building your practice. And one of the questions I get is, Danny, don't you think that brick and mortar businesses are antiquated, outdated, not worth it, versus somebody going all online and just being virtual and.

I think that the brick and mortar clinical practice isn't gonna go anywhere, and in fact, I just don't see anytime soon how you can replace the person to person interactions. And in fact, something that we saw so much more of people whenever they weren't allowed to do that, when we were limited with in-person interactions, how they flocked back to that, especially one-on-one settings.

We actually saw. Many of our cash-based practices explode because of the way in which these are set up and the individualization and the number of people that are trying to work on being healthy, coming out of really a time that, that many of us have never, ever experienced with a pretty nasty pandemic.

So when. You look at the in-person type of business, here's something to keep in mind. Yes? Can you grow a business faster with other channels? Let's say an online business and let's say you have a product or a service, and you can, you can have that as something you can work with people all over the world, right?

So you can have let's just call it a course. Let's say you, let's say you build a course on lower back pain for CrossFitters, right? And you put this together and you throw it up on the internet, and let's say in a perfect world, let's say you could get thousands of people decide to buy it, that would be awesome.

Now, that's also real hard to do because I know I've done it and I've now done it in many other spaces within the digital world. And here's the thing that you have to keep in mind With any business, the speed at which you can grow something is the speed at which it can also fail. I'm gonna say that one more time.

The speed at which you can grow something is the speed at which it can also fail. So let's say, for instance, and I did this years ago. I had a a lower back program that I built out and I taught myself how to. Create a course around it. I taught myself how to do Facebook ads. I taught myself how to set up payment processors and all stuff and a lot of the stuff that exists today didn't exist then.

This was 2015, so seven years ago, the first online product that I put up, and I actually had really pretty good success with it. I started making a few thousand dollars a month off of this. Program off of literally 100% Facebook ads, driving to a page where someone could buy it and they would buy it.

And then I was basically the difference between what I would pay for ads and this this course now. That was awesome. And I was like, oh my God, this is easy. This is amazing. And that lasted for about six months and then Facebook decided to make a change to what they were doing, changed the ads that I was running.

And it went from me making a couple thousand dollars a month to me losing a couple hundred dollars a month on the ads that I was spending with no no sales happening. So this thing that I had built, Quickly, within a couple months, up to a couple thousand dollars went away almost overnight and I ended up having to shut it down and eventually ended up licensing those to to another company.

Which, was good, but overall, It just grew fast. It failed fast. If it grow, if it can grow really fast, it can fail really fast, right? So keep that in mind as you're going through this. I'm not saying that the online world doesn't have opportunities. It definitely does. But when I look at brick and mortar here's something to think about.

When you look at brick and mortar, It is slower to grow, no doubt, slower to grow in terms of scaling, because the reason is you need space and people, you need space and people. So you have to find a space, build it out, get your certificate of occupancy, get all your equipment, these things take time and they're difficult to do.

I don't wanna say difficult they're challenging. They're very doable. They just take time and patience and it takes some money to be able to invest in a space to expand. Then you have to find, train, and manage people, which is actually probably the biggest challenge that people run into. Is being able to grow their schedule.

So if you set things up the right way and you have the right marketing and you have a really good service, you can grow your schedule to where you're pretty busy. Most people within six or 12 months can get pretty damn busy to where they're probably making somewhere between 10 and $20,000 a month in, in that range if they're really trying hard and they have their, they have the right components in place.

On a scale past that, the challenge is you need space and people, so it's slow. You gotta find the space, you gotta find the people, you gotta hire the people. You gotta train the people. You have to manage the people. And that's the hardest part. Finding, hiring, training, managing, and maintaining those work relationships long term is really challenging.

It's the reason why most clinicians have having to drop their schedule volume down because they have to focus on. The team they have to focus on. They're essentially becoming managers of their own business until they get the business to a size in which they can hire a manager within the company to where then they can get even more of their time back and focus on higher level things.

But for the time being, they have to basically become a manager of their own company. Now, over the course of, let's say, it takes you. Three years of really focused work to be able to build that practice to where it is a $500,000 a year practice. Okay, so your top line revenue's $500,000 a year. You have a small team of a couple, you and probably one or two other providers and a, an office staff member front desk member.

Maybe you have some, contractors with that as well. But you have half a million dollars in gross revenue. You have profit that's probably between. 150 and $200,000 a year of income that you're generating somewhere in that range. Maybe more depend, depends on how you set it up anyway but it took you three years to get there.

So three years to build this stable entity to ruin that. Now keep this in mind for me to have my little digital. My little digital course go away. Just took somebody else deciding that they were gonna change something on a platform that I had all my traffic, all my sales were coming from. For you.

In this type of a business, you have a half a million dollar top line business that probably has a. Three to six different marketing channels that you have. Not to mention all of the people that you've seen, that you have had positive experiences with you that are telling other people, oh yeah, I went here when I hurt my knee.

Or, oh yeah, I went here when I hurt my elbow. And you don't have one big client. You don't have one big channel that's getting all of your sales or driving all of your new clients. It's highly diversified and it was slower to build, but it's damn near bulletproof By the time that you, you actually get to that point.

Think about this. If you've worked with, let's call it, in the three year period, let's say you've worked with 500 to a thousand people. The only way that you ruin all of the reputation that you have is by pissing off at least half of those people. Let's say you had to piss off 500 people.

What would you have to do? What terrible things would you have to say, or what awful experiences would people have to have? Just not give you the benefit of the doubt of three years of positive reputation and all these other positive interactions to be able to be like, this place has changed, this place sucks.

Don't go there anymore. And that would have to happen over a long period of time. So it'd probably take you three years of doing stupid shit to be able to ruin that business, which is really hard to do. So when we look at these brick and mortar businesses, we look at these, they call 'em like, more of a boring business approach.

It's not as sexy. You're not gonna start a software platform and sell it for a hundred million dollars. And to be honest, most people that try to do that, it doesn't work. The success rate is very low. I have a friend that has a software company that that, that is, they're starting up, it's relatively new, it's a couple years old, the amount of money that it makes.

Profit that it actually makes is like zero because the cost of it is so high. The cost of development, the cost of marketing it, the cost of maintaining it is a couple hundred thousand dollars a month and he's making a couple hundred thousand dollars a month. He makes zero money and if he has a few bad months and people leave, he's in big trouble.

He's basically having to pay for this overhead that he has. Acquired with all the people that it takes to support it with really no profit in place in the business. He's building what's called enterprise val value, which means he's not building it so that it supports his family. He's building it so he can try to sell it for, tens of millions of dollars, or not a hundred million dollars.

That's a completely different game. It's a very risky game. And we look at the ability to build one of these practices, these simple practices that are bulletproof. Once you get 'em to a certain stage, they are far easier they're far more predictable. They also are more enjoyable cause you get to work with people and actually help them get over physical injuries as well as work with a small team of people you could develop tight, close relationships with and help them, have amazing jobs and support their own families.

There's a lot of really amazing, intricate, unique benefits to this that you don't get with some of these other types of business structures. So anyway when I get questions like this, I find it interesting because the grass is always greener. It's always greener. You look over there and you're like, ah, man, look at that person with their online business.

Look at that person building that, that software. Look at that person doing X, Y, and Z, whatever it is, you have no idea actually what they're doing, what kind of risks they're taking on. And what likelihood of success they have. What we see with people that we get a chance to work with.

These, just, these are real numbers in terms of what we've tracked over the last few years. If we have an opportunity to work with a practice for two years, 93% of those practices hit a $250,000 top line business, which is more than enough to replace what somebody is making working somewhere else, and to have some amount of.

Non-active income associated with it. 46% of businesses that we work with for a two year period. Get to a run rate of a half a million dollars. They get to a $500,000 practice pr, it's predictable, super, super predictable. Now there's things that not everybody obviously makes it to those, and not everybody wants to either.

Some people just wanna have a lifestyle business and replace what they're making, and you can definitely do that too. And the likelihood of success with that is even higher. Because it doesn't take that much, it doesn't take that much to actually, replace what you're making. You can do it.

Usually within six months, most people can get to that point. So it really comes down to what you want. If you wanna take a huge swing, you wanna swing for the fences and sell something for a hundred million dollars, go for software. Do it. That's more of a likely route than growing a cash-based practice.

You'll never sell it for that type of top line revenue, but you may never wanna sell it anyway. Because it's an awesome business to run. It's super predictable. It's very safe, and I'm a pretty risk averse person, so I like these types of business models, and most of the people that we work with too, they want to take the safer option, the more predictable option.

And the option that's like profitable from day one where you're actually paying yourself you're paying yourself versus you're dumping all your money into this thing you hope works that you can sell one day. What if it doesn't? It's like a scratch off to me. Like that world's crazy. I just don't understand why anybody would do that unless they already have built in group of people that they know they can help.

And even still, they still have to build software that's so expensive. I think these are awesome. I don't think that one business model is necessarily superior to another. I think they all have unique advantages, but for people that are clinicians that wanna work with people that wanna have predictability and safety and security and something that's super hard to screw up, I think this model is amazing.

It's so safe and it's so predictable, and it's something they can definitely grow, to even a seven figure business is very possible. With these, it just depends on how much work you wanna put in and how much time you're willing to commit to that goal. If you stick around long enough, you can have a seven figure business.

Just be patient. It'll take you years, but you'll have it. And even still, it's just a bigger version of what we just talked about. That's it. Just a couple more people and a little bit bigger space. It's not a, it's not a unicorn. It's not that difficult to do. It just takes time, effort, and being consistent with it.

So guys, if you're thinking about, man, is this the right model? Is this slow? Is it better over here? I see these people online. If you see people online that are selling you stuff for online stuff, it's because they're great marketers and that's how they make. Their money. Keep that in mind. It you gotta understand like they're great marketers.

They're marketing something they can sell online. It's very hard to sell brick and mortar business ideas and what opportunities people have with that than it is to sell, some idea of just having this quick online buck that you can make. You really can't. And if you do, you probably lose it really fast too, which is what happened with me.

So hopefully this helps. Hope you guys have a great end to your week and enjoy this one. I'll talk to you soon.

What's up, PT Entrepreneurs? We have a new exciting challenge for you guys. It's our five day PT biz part-time to full-time challenge where we help you get crystal clear on how to actually go from a side hustle to a full-time clinic. Even if you haven't started yet. This is a great way to get yourself organized in preparation for eventually going full-time into your business.

So we actually help you get crystal clear on how much money you're actually gonna need to. Replace with your business to be able to make a lateral transfer. How many people you're actually gonna need to see based on what you should be charging. We're gonna tell you three different strategies you can take to go from part-time to full-time, and you get to pick the one that seems like the best fit for you for your current situation.

We even show you all the sales and marketing systems that we teach within our Mastermind for people that are scaling to multiple clinicians, past themselves that you need to have in your business to be able to go full-time. And the last thing is we help you create a one page business plan.

This is a plan that's gonna help you get very clear on exactly what you need to do and drive action. That's what this is all about. We want you to win. We want you to take action, and in order to do you have to get really clear on what you need to do next. So go to physical therapy biz.com/challenge.

Get signed up for the challenge today. It's totally free. We think this is gonna be a game changer for you and are excited to go through it. Hey, real quick before you go, I just wanna say thank you so much for listening to this podcast, and I would love it if you got involved in the conversation. So this is a one way channel.

I'd love to hear back from you. I'd love to get you into the group that we have formed on Facebook. Our PT Entrepreneurs Facebook group has about. 4,000 clinicians in there that are literally changing the face of our profession. I'd love for you to join the conversation, get connect with other clinicians all over the country.

I do live trainings in there with Yves Gege every single week, and we share resources that we don't share anywhere else outside of that group.So if you're serious about being a PT entrepreneur, a clinical rainmaker, head to that group. Get signed up. Go to facebook.com/groups/ptentrepreneur, or go to Facebook and just search for PT Entrepreneur. And we're gonna be the only group that pops up under that.