Why Prioritizing Profit is vital to your practice
10 MIN READ
Why Prioritizing Profit is vital to your practice
You can sum up why profitability matters to a practice in just one word: stability. Being profitable means you and your staff can depend on your practice to support your needs. Profit is the lifeblood of any practice. Without it, practices would quickly fold, and passionate chiropractors would have no choice but to find other work. Profit lets you keep doing what you’re passionate about, and that’s why it’s so important.
The reality is that every practice needs a positive cash flow to survive. You need to make more money than you spend to continue to open your doors for practice. Nobody wants to pay to work. A practice needs money to pay its salary, rent or mortgage, utilities, insurance, employees, marketing expenses, practice supplies, etc.; without cash, your practice will fail.
A financially healthy company is a result of a frugal practice owner not a cheap one.
The old mentality of “I just have to spend money to make money” works in the short term but will ultimately undermine the longevity of your practice. What happens if you have a slow month or have to close for an extended period? How long can your practice survive this?
You need to be setting money, aka profit, aside to create stability and longevity in your practice.
Cash is the lifeblood of any practice; without it, the business fails. That is why profit first was designed to help you retain more cash in your business by simply getting you to rethink what profits mean.
“Good practices generate missions to drive their profits. Great practices generate profits to drive their mission.”
5 Reasons Why Profit is Essential to your Practice
1. Stability & Sustainability
The most important reason to have a Profit in your practice is that it allows you to maintain your practice through any ups and downs in your revenue streams. The revenue generated in your practice will not always be excellent, even throughout the year. There are going to be peaks and valleys.
By making a profit, you are building a reserve that will allow you to withstand these changes without panic. It allows you to create stability in the future of your practice and gives you the time and opportunity to make changes when your revenue drops.
2. Supporting your practice’s growth & goals
Profiting gives you the autonomy to run your business as you want and allows you the flexibility to re-invest in your business to reach your goals.
In growing a business, there are many times when you will need to invest to reach the next level in your performance. Investing in your business could mean anything from increasing the amount spent on advertising to bring in new customers faster. It could even mean that you need to expand your office to allow space to provide more services at once to increase your revenue. Or it could be the ability to hire more staff, allowing you to accommodate more patients.
Whatever your goals are, having a profit gives you the flexibility to invest in your practice how you want. Without a profit, maybe you can’t spend that extra money on advertising, so it takes longer to grow your customer base. When expanding your office, you now need to get a loan to make that happen. You depend directly on the bank to give you the funds to increase your office space. And without a profit, it might be hard to get a loan as they want to know that you can pay them back.
Profit is essential to continuing to grow your practice.
3. The reward for taking the risk
By starting a practice, you are taking on considerable risk. Often there is a significant investment upfront to start a practice. This investment can be cash “sweat equity,” or most commonly, both. Getting rewarded for taking that risk and for all the time you invested in building your practice is a significant reason for doing it in the first place.
This reward comes from the profit of the practice. If the practice was only paying you what you deserve to get paid for the function that you perform, then why would you take on the risk of starting your own practice? Why not just go and work for someone else? Let them deal with the worries and dangers that come with practice ownership. You can take your salary and go home at the end of the day.
But that isn’t the path that you have chosen to take. Getting rewarded for taking a course that only 7% of the population takes on and starting your own practice should be met with a great reward.
You are a shareholder in your practice, and it’s time your practice starts rewarding you like one, just like if you were a shareholder in a large corporation. You should receive quarterly distributions for the increased value in the business you have worked to build. These rewards are possible because you generated a profit in your business.
4. Servicing your community
Profit in your business allows you to continue to show up and serve your community to your fullest capacity. Profit gives you the peace of mind to not worry about money every second of every day. A dip in income for a day will not compromise your ability to pay your bills tomorrow.
Instead, you focus on showing up for your community and providing them with the highest level of service possible. There are no distractions because you know your finances align to support you. And the higher service you can provide to your community, the more likely they will stay with you and recommend you to their friends and family.
5. Supporting your lifestyle
As a business owner, your business must not only support itself, but it also needs to support your lifestyle at home. By generating a profit, you are also securing your life at home. It would help if you made sure that as a business owner, you continue to provide for yourself the level of lifestyle that you desire because when that continually falls short, you will start to resent your business.
Have you ever heard the phrase “You can’t pour from an empty cup”? This phrase speaks to the fact that for you to continue to show up every day in your business, you must ensure you are fulfilling your needs at home. If they aren’t, you will become quickly depleted and unable to show up in the way your business requires. Profit in your business helps stabilize your home lifestyle so that you don’t have any more added stress.
Profit is essential to the stability and longevity of any business, no matter what industry. Without it, you are merely working to cover your expenses. What changes could you make in your business if you were more profitable today? What goals do you have for your business, and would you be able to reach them faster if you had more profitability? Remember that profit is your reward for starting a business and not just a by-product of running a business.
Profit is essential to the stability and longevity of any business no matter what industry. Without it you are merely working to cover your expenses. What changes could you make in your business if you were more profitable today? What goals do you have for your business and would you be able to reach them faster if you had more profitability? Remember that profit is your reward for starting a business and not just a by-product of running a business.
Profit First Chiro Roadmap
Is one of your goals to have a financial system that simple, easy, and allows you to make the best decisions to increase your practice's profitability?
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!