Want To Be More Profitable? Use This Budget Plan! | GYC Podcast 372

A lot of clinic owners say, "I want to be more profitable." And we say, "Great.

What do you want to earn? What does that look like over the next one to three years? Let's get some clarity." And then let's look at constructing your business in such a way that you achieve that outcome, or you have a higher de- degree chance of achieving that outcome.

But then if you ask every clinic owner, "Do you have a budget?" Or, "Talk me through your budgeting process," I reckon we'd be lucky if one in 10 actually have a budget in place or routinely use their budget, look at it, use it to make decisions, so on and so forth.

And so we want to talk through the process for budgeting, and it can be, you know, varying degrees of sophistication or detail.

And, uh, we work with clinics right from they, the moment they open their doors and they're generating $0 in revenue, all the way up to clinics doing $15 to $20 million a year of revenue, and everything in between.

And just because they're a big clinic doesn't mean they've got their budgeting sorted.

In fact, it's quite interesting to see some of those big clinics who, you know, maybe success breeds inefficiency, as you say, Jack O'Brien.

Things have just been going okay, and they haven't got this document, this key asset for how their decisions are shaping up to achieve some financial outcomes.

But first, I thought it'd be a good opportunity to start by talking through your journey and your observation of why clinic owners don't set it up, why, why they don't have a budget, what are some of the barriers so that we can talk to how we overcome those in the process.

If I just start with perhaps my own journey, I perhaps didn't see the value of a budget.

It was something that the accountant said was a good idea, or a financial planner said, "You know, you should have a budget." And you're like, "Yeah, yeah, yeah, I know I should." But what for? Like, what's it gonna help? Like, you know, I'm not gonna be able to get the numbers absolutely accurate.

And so in reflecting on today's conversation, I thought about what were some of the reasons that ultimately led me to actually following through on a budget, and I'm interested in yours, Bec and Jack.

So Bec, l- let's go to you first.

What, what were some of the elements, uh, part of your story and something that you see in clinic owners that ultimately leads them to getting their butt into action and having a budget?

Mm, and I think this came fairly late in the journey for us, actually.

We were so, um, you know, fixated on revenue as our target, and I, in preparing for today, I was thinking about some of the quotes and, and things that really stuck with me-

Yeah

... that changed us in terms of actually looking at a budget.

And it was one quote which was, "Revenue is vanity.

Profitability is sanity." And I was like, we so often are budgeting for revenue.

If we get our practitioners to this level of utilization, if we increase our, um, fees to this, we'll get this amount through the door.

But we haven't factored in or haven't really thought about, well, what's actually needing to leave the bank account-

Yes

... and then how much is left over.

Um, and I guess probably what sparked it early in our journey, we didn't necessarily follow onto it, but was a book called Profit First.