In the “P and l in 10 Minutes a Month” online training session last week – I outlined the exact system I used in my health business, and for my private mentor clients – which instantly calculates the value of the consulting work the owner actually does in the business.
In the majority of health businesses – the wage the owner draws from the business is an accounting decision not one based on clinical consulting.
Meaning – this weekly or monthly owner drawings is an amount determined by your accountant to reduce your tax – and NOT as a reflection of how much physical work you do as part of the therapy team.
One of the problems with the majority of health business P and l calculations is the lack of analysis available to the owner with regard to their personal consulting work – which also leads to problems working out how much your business is actually worth to a potential buyer.
Think about it.
If you are looking to buy a health business – the price you are prepared to pay for the business is dramatically increased if the current owner does not do much in the way of physical treatment of patients.
The potential buyer knows – if the current owner exits the business – this will not really impact the monthly billings – because the owner is not part of the actual service delivery team.
Much like the owner of a McDonalds franchise – does not flip the burgers – so the value of the business is not dependent on the ability of the current owner to provide the actual burger flipping service.
If ,on the other hand, the current health business owner is heavily involved in patient care – this can reduce the value of the business due to the potential loss of monthly billings caused by the departure of the current owner from the treatment roster.
It makes sense, therefore, for all current health business owners to fully understand their personal contribution to patient treatment (billings) and make allowances for this in your P and l analysis.
In the “One Minute Practice” community – we use a specific method to work out the actual owners treatment contribution – called the “Owner Consulting Wage“.
This analysis allows the owner to understand the true value of the business to a potential buyer, gives them a figure they can use to see when they can afford to take holidays and even a way to see when they are actually better off dropping consulting hours to spend more time on business development, marketing and more time with their families.
Without the “Owner Consulting Wage” you are flying blind and believe you just need to keep seeing as many patients as possible to keep the door open – even if it means missing out on precious time with your family and friends.
If you want to see the exact “Owner Consulting Wage” calculation system I use for my private clients the make sure you watch the replay of last weeks special online training event BEFORE it disappears from the internet on Thursday.
Here is the replay registration link –once you register you will be taken directly to the replay view page PLUS receive an email with the link to the replay view page.
I don’t always make replays available of my live online events – however – due to the large number of replay requests we have received ,the importance of the topic and maybe a dose of Christmas cheer , I have decided to make the replay of the event available.
BUT – the replay will ONLY be available until – Midnight Thursday December 13th, 2018, Sydney Time – after which the video will no longer work.
# The exact Profit and Loss calculation method used by my most advanced private clients – which lets them know – in less than 10 minutes a month – exactly how much they are paying in admin wages, therapist wages, rent, and clinic costs – and where saving can be made.
# How to make your business infinitely more attractive and valuable to a potential buyer
# The 2 key roles of your accountant – and neither of them are to give you a workable P and L or to help you run your business more successfully
# The key number that lets you know when to expand into a new location- and if the rent at this new location is too high.
# The number which will give you the freedom to cut back your consulting and spend more time with your family and friends
# Why your current payroll system is making it impossible to know your monthly P and l and how to solve this instantly in your health business
Plus in the Q and A section I shared by secret recruitment strategy which instantly made my health businesses the preferred employer ,removed almost all wage negotiations and made all applicants want to work at my health businesses.
Be aware – this replay will only be available until – Midnight Thursday December 13th, 2018, Sydney Time after which the video will no longer work
Here is the link to the replay registration page: