What is Profit First for Chiropractors?
9 MIN READ
If you’re not yet a master of your cash flow, it’s easy to go through an entire year without knowing whether you’re making or losing money. Worse, by the time you know your financial standing, it’s often too late to correct the situation. This can be a very stressful place to be.
But, it doesn’t have to be this way. By learning to leverage some of your natural behaviors, you can implement a system to manage your finances and ensure your practice is profitable. All it takes is learning the Profit First system and applying it to your practice. With this system in place, you’ll know exactly where your practice stands at all times. The system allows you to be proactive in managing your finances. You don’t have to stress about your finances anymore. Learn how Profit First can help you take control of your practice’s finances today.
When you have control of your practice’s finances, you have the power to impact your profitability and future. Knowing where your money is coming from and where it is going is essential to making sound financial decisions. This is why we have made it our mission to bring you high quality financial information, and wrote the book Profit First for Chiropractors.
As a practice owner, knowing your financial numbers is essential to your success. But it can be challenging to figure out how to manage your finances since you’re not an accountant. Don’t worry – you’re not alone. Don’t let the challenge of accounting hold you back. Managing your finances doesn’t have to be complicated, so don’t let that keep you from reaching your goals. With the right tools and guidance, you can take control of your finances and achieve success.
When we came across Profit First, a book by Mike Michalowicz, it didn’t take long to realize this is an excellent resource for any practice owner. The Profit First system teaches practice owners to “transform any business from a cash-eating monster to a money-making machine.” The system focuses on transforming your cash flow management system. It is designed so that your practice makes a profit and you get paid a regular salary, regardless of your revenue level. After reading this book, we were excited about how transformational this would be for a chiropractor.
We knew we had to customize this system so chiropractors everywhere could achieve their profitability goals. We have over 20 years of business and accounting experience and a passion for chiropractic. This lead us to write the book Profit First for Chiropractors. This book is available as paperback and Kindle books on Amazon.
This book is all about empowering you in your finances to create sustainable profitability for your practice. Are you ready to find out how you can make your profitability dreams a reality?
~Mike Michalowicz
Swapping the Formula
Do you remember the age-old GAAP formula for determining profitability? Where you take Revenue – Expenses = Profits. Sounds simple, right? It’s logical and straightforward. But what if I told you there’s a better way to measure your practice’s profitability? Forget the old GAAP formula – it’s meant for accountants and doesn’t consider natural human behavior. Instead, Profit First For Chiropractors will have you use a new, improved method called flipping the formula.
Revenue – Expenses = Profit
Revenue – Profits = Expenses
I know, mind-blowing! Right?
Listening to the teachings of GAAP led us to believe that Profit is what is leftover, which makes profits an afterthought. You end up hoping to be profitable rather than planning to be. If we continue to use this formula, our profits will be nothing more than a maybe surprise at the end of the year.
It’s the same but different.
Logically the match is the same. However, from a behavior standpoint, it’s radically different. Essentially for every sale you make, you take a predetermined percentage and transfer it to your Profit account. Now you are taking your Profits before you pay for anything else.
Parkinson’s Law
Author and historian C. Northcote Parkinson discovered this law in 1955. This law states that our demand for a resource (in this case, money) increases to meet the supply of it. So, if you have two weeks to do a project, it will take two weeks. If you have eight weeks, it will take eight weeks. The same is valid with money. If you have $1,000 to complete a project, you’ll get it done for $1,000. But if you have $10,000, you’ll spend the $10,000.
It’s time to leverage Parkinson’s Law to your benefit. When you take your profits first, the money available for expenses lessens. It would be best if you found ways to get the same things done for less money. It may seem difficult at first, but you can make it happen with a bit of creativity and determination.
Bank Balance Accounting
The reality is that you didn’t start your practice so that you could work on managing your finances. However, it is essential in order to have a successful practice. Using a traditional bookkeeping method, you would need to spend hours reviewing your financial statements in order to understand your current financial standing so that you can make informed decisions for your practice.
That is just not practical as a practice owner. There has to be a better way to get updated financial information.
This is one of the great benefits of Profit First. It creates a reliable bank balance accounting system. You can actually rely on the numbers in your bank account to give you an accurate picture of your financial standing.
And the best part is that you don’t have to do any additional work. You can now log into your bank account, or better yet receive push notifications to your phone, every morning and know exactly how your practice is performing. How much of a relief is that? One less thing you need to get done today!
Don’t Change Habits. Leverage Them
You are not alone if you have ever struggled to stay disciplined with managing your finances. Managing your finances just through self-discipline is hard to achieve. However, with the Profit First system, you can make your practice financially stable and benefit from regular profit distributions. This system does not try to change your habits but instead works with your existing habits. You simply allocate money to different accounts and remove the temptation to “borrow” from yourself.
Seems Simple Enough, But Where do I Start?
You are probably thinking, wow, this sounds so easy. I want to be profitable. I’m going to grab this book and get started. While Profit First is a simple system to follow, and the book is a fantastic starting point, we want to make the process of implementing Profit First into your practice as easy as possible for you.
This is why we created the Profit First Chiro Roadmap.
This personalized financial roadmap will show you exactly what you need to do to achieve financial clarity and finally start making profitability a reality.
With the Profit First Chiro Roadmap, you’ll learn the five key numbers that every chiropractor needs to know to make informed decisions about their practice. You’ll also get a personalized roadmap that shows you exactly how to achieve profitability.
Stop struggling and start making a profit with the Profit First Chiro Roadmap. Get started today and see the results for yourself!
So, what are you waiting for!
If you’re inspired to take control of your finances and start keeping more of your revenue, Profit First Chiro Roadmap is the perfect solution. Grab the Book and the Profit First Chiro Roadmap and start your journey to sustained profitability today!
Profit First Chiro Roadmap
Welcome to Profit First Chiro!
Hi, we are Debra and Sabrina! We are mothers, wives, financial experts, Profit First enthusiasts, chiropractic advocates, and co-founders of Profit First Chiro: a company on a mission to elevate chiropractic financial literacy. We are here to teach you how to transform your practice’s profitability and finally achieve the abundant lifestyle you desire.
We specialize in using the Profit First system to achieve your financial goals, helping you shift from pieced-together financial and business systems to a holistic financial plan that supports you in achieving your goals in every aspect of your practice and life.
