[INTERVIEW]
Ronda Nelson: Let me ask you a question. How many patients do you need to see every single week to have a profitable practice? If you don’t know, it’s okay. You are not alone. Today, we’re gonna figure that out. You do not need to become an accountant, and you don’t need a big fancy financial statement. All you need are three numbers, and I promise it’s much easier than you think.
Let’s talk about it.
Well, hello. Well, welcome back. I’m so glad you’re here. We are gonna talk about money today and numbers, which, you know, people get embarrassed about it. I get it. I mean, it’s not a very fun topic, especially if you don’t know what the heck you’re talking about. So we’re gonna make it really super simple today, but let’s talk about your practice.
Your practice is there so that you can get paid for what you do. I mean, we don’t often wanna talk about it. We don’t wanna talk about money because we’re just here to serve people. Well, you’re gonna starve and be naked under a bridge. That’s what’s gonna happen if we don’t get your fees right, and we don’t get your pricing right, and you don’t have at least some knowledge about what it takes. How do you set a goal for what you want?
Or say, “I need to have X number of people,” or, “I am going to have…” I don’t like to say need. “I will have X number of patients in my practice today,” or this month, or this week, or whatever it is. Most of us start a practice out — I know I did in the very beginning — and you set a fee that’s based on your own perception of your value.
And when you first learn all of this functional medicine stuff, our value of what we know and how we can help is usually pretty low. And I get that. I totally get that. But then we open the bank account, and a little bit of money starts dribbling in, and it’s definitely not enough, and we now have a very expensive hobby, right?
It’s a very expensive hobby. If you don’t take your business part seriously, you just have a hobby. It’s your clinical functional medicine — wellness practice hobby that’s not making any money. No, no. Would you go work for somebody else as hard as you’re working now and not get paid? No, that would be wrong. Why would anybody do that? So why are you doing it to yourself? That’s what we’re gonna figure out today.
So what we do is we get a little bit of money in, and then we look at the bank account. We’ve all done it. I still do it. We look in the bank account, we go, “Oh, there’s an extra little bit in there. I think I’ll take out some money for myself.” And we do this — it’s called a draw. And we take a little bit of money out, off we go. And then we think, “Oh, I hope there’s enough at the end. I need a couple more people to come in, and then I’ll have enough to pay the rent at the end of the month.” And this is just how we go.
But your numbers are your report card. It’s just information, and if you get a bad grade on a report card, what are you gonna do? Put your head in the sand and go cry? No, we don’t do that. We’re like, “Oh, dang it. I need to get that grade up.” That’s all we’re gonna do today. We’re gonna figure out where you’re at. I’m gonna give you some simple numbers, super simple math.
You do not have to be an accountant, I promise you. I love numbers, but sometimes they kind of get me overwhelmed. So I’m not gonna overwhelm you today. Just come along for the ride, stay open, stay teachable, right? You might learn something a little bit new today, and you might go, “I don’t know.” It’s okay. Guesses are fine. Guesses are totally fine. You can just have an estimate, and it’s completely fine.
Your profitable practice should not be a mystery, and it should not depend on a wing and a prayer and a hope, like you’re just throwing spaghetti at the wall, putting your little sandwich board out there saying, “Come see me.” We don’t want that. I want you to be really empowered about where you’re at, how many you need, and then you can say, “This is how many people I need in order to pay myself and cover the expenses of the practice.” Your patients don’t want you living naked under a bridge either. So don’t do that.
We want to make sure that you’re profitable. So there are three numbers, as I said. First question — this is the most important question. Write this down. How much do you want the practice to pay you every month? First, you have to be reasonable. You can’t say a million dollars, ’cause that’s just not reasonable. But how much would you really like the practice to pay you right now? Not when it’s successful. I don’t want you to think, “Well, when I get my social media up and going, then…” No, no. Right now, today.
I want you to write it down — unless you’re driving or operating heavy equipment, do not write it down. Or if you’re on a treadmill, do not write it down. I don’t wanna be responsible. But make a mental note if nothing else. Writing it down is better. How much do you wanna get paid? That’s just number one. That’s an easy number, right? I told you I was gonna make this easy. So choose something realistic, but right now, do not think about, “Well, the business can only pay me $50 a week.” I don’t care about that. I don’t want you to care about that. What do you need to get paid every month? That’s all. After the overhead, okay?
Your overhead — I guess what the business pays you is included in your overhead. So you have rent, utilities, internet, your student loan, blah, blah, blah, blah. All the stuff written down. Software expenses, office supplies, subscriptions, the normal stuff, utilities. All that’s added up, plus what you need to get paid — that’s your total. That’s your total. So that kinda leads me into question two.
Number two is how much does it cost to run your practice every month? Every business has costs, and those costs are the rent, the utilities, the subscriptions, the other things that go into the business, right? So how much does that cost? When I have this conversation with practitioners, almost everybody kinda hangs their head and says, “Oh, I don’t wanna talk about it.” I get it. I get it. But if you don’t look at it, it only gets worse.
It’s kind of like looking at something moldy in the refrigerator and you think, “Oh yeah, I should really pull that out,” and then we just pretend it’s not there, and pretty soon the lid is bulging, and then you’re forced at some point to look at it, and by the time you look at it, it’s all gnarly and smelly. Don’t do that. Let’s just do it right now.
So write down how much is your rent. If you’re virtual, you won’t have this expense. How much is your insurance? Do you pay insurance every month? How much is the insurance? How much do you spend every month on, like, office expense? Write that down. How about any independent contractors? Do you have a part-time assistant? Do you pay a retainer to an accountant once a month? Are there any other subcontractors? What do you pay for your website or website hosting? And how about utilities? Just write it in general.
A general number is fine. You think, “Oh, utilities are about $100.” Okay, great. Perfect. Write it down. What about software? Like, I use Practice Better. I have that. If you have Google Workspace, then you don’t have any cost, or it’s minimal there. Just do your best, right? Write all the other things down. If you have a student loan you have to pay, write that down. Whatever it is, just write it down.
So now we have number one, how much does the business wanna pay you. Number two, how much is your overhead every month. And then we add that together, and that is our total nut to crack, so to speak. That’s what we need to make every month, ’cause we gotta get you paid.
Number three — this is your third number. It’s not hard. What is the average collection that you have per patient? So if you think of every person, every visit that you see, how much is it on average? Do they walk out — is it usually $80 for a follow-up visit or $150 for a follow-up visit? Or is it $300? I know some of them are high and some of them are low, so I’m just asking you to go through a little bit of a mental exercise and say, “Okay, well, it probably averages 220.” I would say that’s probably a pretty good number. It’s probably gonna come in around the 180 to 220 mark. Most of the time, that’s about where it is. If you average the highs with the lows, that’s about where you’re gonna sit. So this is just an average.
Now, this is the third number, but if you really want to get into the minutiae of things, there’s kind of two parts to this number. You don’t have to do this, but I’ll give it to you anyway, for those of you that are overachievers who want to win the prize. Part A is how much comes in for your fee for service or programs or membership, whatever you have, and then how much is supplements? Because that supplement money is not all yours — 50, 60% of it is going to go to the vendor, and then you keep part of it.
So if you want a more accurate number as far as the money you get to keep and dole out to all of the expenses, it’s your fee-for-service income — what do they pay to see you to get your clinical input and knowledge — and then you take roughly half of whatever the supplements are. But if you don’t know, that’s okay. If you’re kind of rolling them all together, I probably would bump it up by maybe 50 to $75. That’s what I would do, just for kicks and grins — just so we don’t end up underestimating, we can overestimate.
Okay, so there’s your three numbers. Let’s recap. Number one, how much does a practice need to pay you? Number two, what is your overhead? Add those together — that’s your total. And then number three, what is your average collection? So now we’re going to do only one math equation. It gets way more complicated than this, but I’m just trying to make it simple for you.
We’re going to take the total amount that it takes to run your practice and pay you, and then we’re going to say, how much do we need to make divided by the number of patients that come in? And that’s going to tell us how many patient visits we need. So I’m going to give you an example. Are you ready? Here we go. That was a little mathy, so just sit with me.
Let’s pretend the practitioner wants $8,000 a month. I’m just picking a number. Let’s say you’re very skilled and confident about what you do, and you’re like, “Listen, I should be able to make $2,000 a week.” That’s basically $500 a day in take-home money for what I do. I mean, really, if you look at it that way, it’s not bad — for the days that she’s working. So she wants to take home $8,000 a month, and her practice, she’s virtual, but she has some other expenses, and let’s say her overhead is $4,000 a month.
That’s her rent, or not rent, her overhead and expenses and loans, and maybe some equipment thing. It’s $4,000 a month. So her total, total is 12,000. You guys got that? 8,000 plus 4,000 is 12,000. We got this. So the total she needs every month is $12,000. All right. If she collects, let’s say her per patient visit is $200. So we would take 12,000 and divide that by $200 for the average visit, and that means she needs 60 people a month.
Well, first you’re like, “60 people? Oh my gosh.” But if you divide that by four weeks, it’s only 15 people per week. Could you see 15 in a week? Yeah. Not hard, right? That just makes it very, very easy. If you work five days a week, how many people per day is that? Three. Can you handle that? I think you can. It’s only three people a month, and our little sample practitioner could take herself home $8,000 with $4,000 worth of overhead by seeing three people a day or 15 people per week.
Maybe you charge more per visit. Maybe your per visit is $300. So that means you only need 40 visits per month — 12,000 divided by $300. You only need 40 patients per month. That’s pretty great. That’s only 10 per week, which is two per day. So when you have these basic numbers, it’s real easy to do the math.
So we’re gonna add up our total. Total, how much do we need — overhead plus you. We’re gonna divide that by that average patient cost, and that’s gonna tell us how many people we need to see, and then I should be able to get paid. So the next question is, are you seeing that many people? I mean, I would think you should be able to see three, five people a day, or maybe you’re working three days a week. That’s gonna decrease the amount that you get paid, because you gotta work to get paid. But this way, it makes it a little bit more tangible and easier to achieve in your mind.
So did you find yourself going, “Oh, well, that’s not bad. I can do that. That’s not hard at all. Three people a day, two people a day, I can do that”? Now, all of a sudden, energetically, you’re putting out the signal that this is easy. And maybe before we had this conversation, what were you saying? “It’s so hard, and I can’t grow my practice and my social media. I need to do social media, and I’m not making enough money, and I can’t get the right people in, and no one stays. No one wants to refer. My retention is terrible.”
Do you hear yourself? And if that’s you — if your best friend was saying that stuff, what would you say back? “Come on, girl, you got this. You’re gonna be fine. This is all great.” You would come in as the cheerleader. So really, once you know the number — how many people you need to have in order to meet your overhead and pay yourself — when you reverse engineer it like that, just one simple math equation, now you can say, “Okay, well, let’s say your overhead’s super high, and you’re greedy, and you want $10,000 a month, and you’ve just started out.” Okay, fine. You could be that way, but we gotta do the math, right?
Maybe it shows that the numbers pan out that you gotta see six people a day. And if you’re thinking five days a week, that’s 30 people a week, which is high if you’re starting out. But you might say, “Oh my gosh, how am I gonna do that?” Okay. Well, there’s a couple things we could do. Number one, we could look at your fees. Is it time to maybe do a little bit of an increase? Could you maybe add 5% to your supplements, each supplement that you sell? Could you maybe find some people in your community, like I was talking about last week on the cardiolo— uh, about the cardiovascular kidney metabolic syndrome episode last week?
Maybe there’s a cardiologist that you can refer to. I know one practitioner in CBA, Clinical Business Academy, and she just recently made a relationship with a cardiovascular surgeon in her town, and now she’s starting to get cross referrals — he sends people to her, and she sends people to him, and it’s great. She’s getting new patients, he’s getting new patients, and it’s a two-way street. Now, an MD might not be your right fit. I have another practitioner who’s doing that with a massage therapist, and they’re sending people back and forth. It’s perfect. So maybe there’s a referral relationship you can start to develop.
You also have the opportunity, and I would say the responsibility, to look at your expenses. Cut out those subscriptions. Cut out the things you don’t absolutely have to have. And ask yourself, “If I was going to increase the profitability of my practice, could I go without this thing for six months?” I’m not saying cancel your Practice Better software or anything like that. I’m just saying, is there something you’re running through your business that you could live without for a few months, or that’s really not necessary? Are you paying more for website hosting than you need to?
Website hosting is a racket, by the way. Are you paying somebody big, high dollars to do marketing that’s not working? That often is a racket too. They get on the phone, and they’re real good salespeople, and they promise you the moon. But it never, ever drives new patients. And they’ll say, “Oh, well, it just takes a little while. We just gonna have to keep going at it.” And then 12 months later, you’re out six, seven, $8,000 because you were paying four or $500 a month, and you have nothing to show for it. I’ve seen it over and over and over again.
So what are the things you can do that will actually start to drive the needle and bring in more people? Social media works, but it’s a long game unless you’re gonna post every single day. So what if you get down to the end of the day and you’re like, “Okay, this is not working. I can’t see enough people to make this work on a fee-for-service model”? You might want to think about not offering it one appointment at a time, but instead consider doing something as a — I’ll say a package or a program. I don’t really like either one of those words, but I don’t know what to replace them with. But think about doing something that’s outcome-based. I teach this in Clinical Business Academy. I’ll pick on bloating a lot, because so many people are bloated.
If you had a “beat the bloat” program and it was six weeks, and you’re really good with bloating, you know, if I just do this, you’re gonna be fine. Or maybe it’s fatigue, or maybe it’s sleep, or whatever. You pick the thing you’re good at and could solve in your sleep. It’s easy for you. And you just create a six-week — one fee, one thing — and you do it for six weeks. You build it out. It includes the supplements. You just kinda guess how much they’re gonna need in supplements. This protects your income, your revenue from supplements, and keeps them from going out and buying them online, which they like to do.
It includes all the supplements. It includes, you know, a call with you every two weeks. You build it however you want. All the practitioners in CBA are doing this, and everybody has it a little bit different — it’s just whatever your flavor is. But you build that however you want, and now the patient comes in, and they’re not paying you fee for service for one-off visits. And you know what happens — they often drop off, right? Then that affects your income, and that’s why practitioners are complaining to me, “My retention is terrible. How do I get them to stay?” And I’m like, “You’re just not offering your service in the right format.” So you format it like this, where now they’re buying an outcome.
They’re buying a transformation. They’re buying a solution from you, not a transaction — not a one-off, “I’m gonna pay you, and you’re gonna give me an adjustment. I’m gonna pay you, and you’re gonna give me an appointment.” Now you’re saying, “Here’s what it’s gonna cost, and I’m gonna give you no more bloating,” or “more energy,” or “better sleep,” or “resolve your brain fog,” or whatever that is. So think about that. That is a really good way to turn the revenue dial up. And at the same time, if you decrease your expenses — that’s the only two dials you have to turn in a business, more revenue, less expenses. But when you can leverage those two dials, then you’re gonna end up being a lot more profitable at the end of the day.
[CLOSING]
Ronda Nelson: So that’s my two cents for you if you’re thinking about, “How do I get myself paid?” This is how you do it. It’s not that hard. Just reverse engineer how many people you need to see in a week, and then start thinking positive. So many of us, it’s easy to get in the negative spiral, and I don’t want you to do that. I want you to think positive. I want you to say, “Yes, I can easily see 15 people a week. I can easily see 20 people a week. Those 20 people are gonna come to me. My practice is gonna be full. I’m gonna have a wait list. I’ve got plenty of room to expand and see all of these people. That’s what I want. I’m gonna see all these people.”
Because now you’re clear about what you need. But when you’re not clear about your number — “I want $8,000 a month in income, that’s what I want” — if you’re not clear about that number, how can you get it? You can’t. You’re gonna limp along and let happen what happens. And I argue, you gotta get in the driver’s seat of that business. You’re a clinician and you own a business. I’m sorry, I didn’t make the rules. That’s just a requirement, right? You gotta have a business. You can’t do what you do without one. So get in the driver’s seat, be the CEO of your business and say, “This is what I need, my overhead. This is how many people I need to see in order to pay myself and satisfy the obligations of the business.” That’s just you being a good business owner. There you go. That’s it.
If you wanna learn more about business, you can always come join me inside Clinical Business Academy. It’s a one-year program. It will transform the way that you think. It’ll transform your business. You will look back a year from now and you’ll say, “Oh my gosh, my business is completely different.” You gotta put in the work, but it’s not that hard. And you get to do things you love to do, create solutions for patients who want to pay for what you do and want your services, rather than feeling like you’re always out on the street corner begging people to come in.
We don’t want that. We wanna shift that. So you can come join me in Clinical Business Academy — rondanelson.com/cba — and schedule a call with me. It’s a strategy call, and I’ll tell you: if I can help you, I will tell you, and if I can’t, I will make sure you leave with actionable steps you can take. If you’re not a good fit or you’re not in the right place in your business, I’ll give you those actionable steps that will allow you to start making some improvements, and then maybe you can come back and we can have a conversation another time.
Thanks for joining me. I hope this was so helpful for you. Have a great rest of your week, and I’ll see you next week on the podcast.
[END]