October 22, 2025 • 16 mins
We show a simple five-minute method to see where every dollar in your practice goes and how to judge if your margins are healthy. We explain which P&L to pull, how to adjust for distributions and debt, and why more revenue won’t fix broken expense habits.
Meet with one of our coaches
*Intro/outro song credit:
King Around Here by Alex Grohl
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
Are you curious about where all the money is
(00:01):
going in your practice and youjust don't really know where to
start or how to figure it out?
I'm going to teach you what Icall the five-minute financial
snapshot in your business, whereyou can get a really good grasp
on where you stand financially.
Are you in a financially healthyplace or not with your business?
And it only takes five minutes,and you're really just using
documents that you already haveon hand.
(00:23):
My name is Craig, and I'm theowner of Daisy Financial
Coaching.
Our team is on a mission to makeyour therapy practice
permanently profitable.
If you own a solo or grouppractice, we're here to help you
build a business that createsmore time, makes more money, and
serves more people.
This is the Therapy BusinessPodcast.
(00:47):
I know business finance can beoverly complicated, and there's
a million softwares out therethat can show you forecasts and
real detailed data on yourfinances.
And truthfully, what I hear frommost practice owners is it's
kind of just like mumbo jumboindustry jargon.
They don't fully get it.
And I'll be honest, sometimes Ilook at these softwares and what
(01:07):
they're spitting out, and it itfeels like I'm having to go back
through like calculus to figureout how to read these things.
It can be really confusing.
And what typically happens is werun these reports, or maybe we
export something from ourbookkeeping software or from
simple practice or whatever itis, and it just overwhelms us
that we just end up closing thetab and like uh I don't have
(01:29):
time to try and figure this out,or whatever.
We're still left confused in thesame place we were before.
So, how can we simply get a goodsnapshot on where our business
stands?
Well, I'm gonna talk you throughhow you can do this in a really
simple, easy way.
It's gonna give you a big bird'seye view of where your finances
currently stand, and all you'regonna need is your PL, an income
(01:50):
statement.
Now, if you don't have one atthe end of this episode, I'll
walk through the alternative.
So if you don't have bookkeepingsoftware, first of all, you need
something to be really trackingand monitoring your expenses so
that you have PLs, they'rereally important to the
business.
But if you don't, that's okay,I'm not judging.
At the end of this episode, I'mgonna walk through things you
(02:11):
can use so that you can still dothis exercise and get a good
picture of where you standfinancially.
And then let's go ahead and addthat bookkeeping software and
maybe even hiring a bookkeeper,outsourcing somebody to help
keep your books and yourexpenses organized and up to
date.
All right, so the five-minutesnapshot, taking your profit and
loss statement.
So if you're somewhere where youcan sit and follow along, I
(02:32):
recommend pull up pausing theepisode, pull up your PL so that
you can do this alongside me.
If you're at the gym in the car,that's okay.
I'm not gonna go super complex.
So you can still listen and geta good idea of what to do
because the process really ispretty simple.
The first thing we're gonna lookat is your revenue generated.
So at the very top, that is yourincome, all the money that you
(02:52):
have generated this this year.
It might be gross income at thevery top.
It's literally at the very topof your PL, the money you've
brought in.
If you're doing multipleofferings, you're gonna want to
take the collective amount, howmuch have you brought in total
across the board?
Now, I do want to say on yourPL, uh, this is I probably
should have said this before Ieven got into the statement of
(03:13):
what you're looking at.
Is depending on when you arelistening to this, determine it
that'll determine what PL youshould be pulling.
And what I mean by that is I'mrecording this here in October.
And so I would say go ahead andjust get a year-to-date PL.
We have enough months this yearthat we can go ahead and just
pull something from January totoday.
If you're listening to this andit's the beginning of the year,
(03:34):
then you're gonna want to justgo ahead and pull the previous
year's profit loss statement.
A good rule of thumb is if it'spast the midway point of the
year, a year-to-date one isgonna be okay.
So that means if it's afterJune, so if it's July and
beyond, go ahead.
You could probably pull ayear-to-date PL and use that
info.
Otherwise, if it's before July1st, I would say pull your
previous year's PL and use thatinformation.
(03:56):
So we're gonna look at theincome at the top.
That's our how much we'vebrought in as a business.
The next thing we want to lookat is I want to start with you.
I always like to start with theowner.
How much have you paid yourself?
Now, if you're running throughpayroll, you might need to pull
up a payroll document.
Sometimes in your PL it'll haveowner's compensation, it'll have
(04:17):
something in there that'lloutline what you've paid
yourself through payroll.
We want to calculate that.
And then I also want you tofigure out how much have you
taken in distributions.
So you might need to go back andfollow that paper trail.
Maybe depending on how you'vedone it, it might you have to
look at bank statements.
Maybe if you're prettyconsistent about what you're
paying yourself.
So if you pay yourself$5,000 amonth, then just multiply$5,000
(04:39):
times however many months we'vebeen.
I don't want you to get toostuck in the weeds of this.
Obviously, the more accurate youare, the better snapshot we're
gonna get.
But ballpark numbers are fine,they're gonna get you pretty
close to what you want.
So I would say and if yourincome has fluctuated pretty
drastically, meaning like maybeyou've skipped pay periods,
(05:01):
maybe sometimes you pay yourselftwo thousand, sometimes you pay
yourself five thousand, then Iwould probably try and go back
and look because again, what weperceive, what we think we paid
ourselves may be reallydifferent than what we actually
did.
But again, if you pay yourselfpretty consistently, if it's
ranged from four to fivethousand, then calculating it,
just coming up with a ballparkshould be fine.
(05:22):
We want to figure out whatyou've paid yourself so far this
year.
So let's just say top line is ahundred thousand, then I've paid
myself so far this year, let'ssay thirty thousand.
Okay, so that will give us agood idea.
30,000 of that 100,000 got paidto you.
So we're gonna get a percentage.
(05:42):
So 30,000 divided by 100,000means that so far year to date,
if that those numbers were you,you've paid yourself 30% of what
you've brought in.
So that's an important thing tonote.
So we're gonna write that down.
I'm being compensated.
30% of all sales that have comein have gone back to me as the
business owner.
The next thing we want to lookat is our taxes.
(06:03):
How much have we paid into taxesthis year?
So again, whether it's payroll.
Now I want you to, if we're ifyou have employees, we are
thinking solely on your taxes.
How much have you personallytaken?
So, how much has been taken outof your paychecks?
How much has the company paidfor on your behalf in taxes?
And then how much have you, ifyou've had to go in and make
(06:25):
quarterly tax payments, any ofthose, how much have you paid
into that so far?
A lot of this will be on the PL.
However, again, if you have awhole team, it's gonna be
probably lumped in with payrolltaxes, and so you'll want to go
and look into your payrollsoftware to pull that data and
see.
You can just pull your mostrecent pay stub, and it's gonna
go ahead and tell you exactlywhat those numbers are.
(06:45):
So we want to get a generalidea.
So let's say, again, my I took Ipaid myself 30,000.
Um, and then on top of that, wepaid an extra 10% in taxes.
So another 10,000 in taxes.
So I know 30 that 30% is goingto me, 10% is going to taxes.
Next, we want to look at ouroperating expenses.
(07:06):
Now, this is gonna be the bigone, and if you own a group
practice, you're gonna have twobig pieces of this.
You're gonna have your payroll,and then you're gonna have your
overhead expenses.
This is simply taking ouroperating expenses, and on your
PL, it will have a totaloperating expenses.
Uh as they list out everythingyou're spending money on at the
bottom of that section will betotal operating expenses.
(07:30):
We're gonna take that number.
Now, if taxes were included inthere, if your owner's
compensation was included there,we're gonna want to pull that
out because we don't want thatto be part of the picture.
So, again, let's say youroperating expenses this year
were$70,000, and we already knowthat$30,000 got paid to you and
10 got paid to taxes.
(07:50):
So maybe$30,000 or sorry, yeah,$30,000 is what we actually paid
in operating expenses once wetake those things out.
So again,$30,000 as compared to$100,000, that's 30% again.
So we're getting a good idea ofwhere do we stand
percentage-wise financiallyacross the board on all these
(08:11):
areas.
The last one we're wanting to weare gonna want to look at is
profit, and that's at thebottom.
That's why they call it thebottom line, your net profit.
We want to see what is thatnumber, we're gonna divide it by
the top, the revenue number.
So we're gonna take that, divideit by the 100,000.
One thing we want to note is ifyou've been paying yourself
distributions, not throughpayroll, they're likely not in
(08:33):
the PL.
So we're gonna want to take thatinto account.
So again, if you've paidyourself 15,000 in distributions
and your net profit at thebottom says it is 20,000, well,
then we need to take away that15 because of that profit you
paid yourself, and all that'sleft is the five.
And so that's five percent.
This is a way to get a goodclear picture percentage-wise of
(08:56):
where your money is going.
Now, we know healthy businessescan vary drastically in this
realm.
Uh, if you want to know whereyou stand payroll-wise, it's
okay to stuff to take that asits own percentage and say,
okay, out of those operatingexpenses, what is my payroll
compared to my revenue?
What is my operating expensescompared to my revenue?
You don't need to get too deepinto the weeds.
(09:18):
The more detailed you are, likeI said before, the more accurate
your numbers are gonna be.
But getting a general idea ofprofitability-wise,
percentage-wise, where are we?
What percentage of revenue isgoing to me?
What percentage is going totaxes?
What percentage is going tooperating expenses?
If you get stuck on the taxpiece, for example.
(09:38):
So maybe as I was saying, youmight need to go back through
pay stubs and pull those to getout.
If it's overwhelming to you,then it's okay to just say, you
know what, I'm gonna just figureout my operating expenses and my
owners pay for now and profit,and just leave the tax piece to
the side.
What we want to know really inthis snapshot is just where do
we stand in general?
(09:59):
Now, my example was a 30%operating expense number.
Odds are that's gonna be a solopractice, a group practice is
likely not gonna have 30% goingto operating expenses.
But right there, that is areally healthy number.
30% is a very healthy number forany size business.
Honestly, if you're a largebusiness and you're only
spending 30%, uh, that'sfantastic.
(10:22):
You might even be able toallocate more funds to growth if
you're struggling to gettraction or struggling to grow.
If you are a virtual therapistor you have a virtual only
practice, it's likely that yournumbers will be lower.
Now, again, if you're a largerbusiness, you might be looking
at 50% going to operatingexpenses, 50 to 60%.
And that's still okay.
(10:43):
But what we want to see, if yourun these numbers and you see
80% go into operating expenses,which let me tell you is
incredibly normal.
And that's what we largely seewhen people come to see us is
they're sitting around 80%operating expenses, and they're
we're going, no wonder you'restressed out.
No wonder you're not payingyourself what you need to be
paying yourself.
Once you can identify that, thenit's the next step of okay, I
(11:06):
have I need to fix this problem.
Why, why do what are we spendingthis money on?
Why is it this way?
Why are we stuck?
What do we need to change?
Is it something in our paystructure for our team?
Are we overcompensating them?
Are we wasting a lot of money onthe overhead side?
Is our rent way too expensive?
What are the pieces that arehurting us?
(11:27):
And then we can also look andsay, okay, well, if I bring in
if I doubled my revenue, wouldthe problem still persist?
And kind of playing around withthose numbers and saying, how
can we systematically bringthose numbers down?
Do you have debt?
Are you servicing debt?
Could that be why?
When you're looking at a PL, andthat's something to note is your
debt payments are not includedon there.
So your monthly minimum paymentstoward debt will not be included
(11:49):
on a PL.
And so we want to take that intoaccount.
So if you're paying monthlydebts, we want to add that on
top of your operating expensepercentage that we calculated
earlier, so that way we get areal good idea of where the
money's actually going.
So take all those pieces intoaccount, and then from there,
it's moving forward and makingthe necessary tweaks,
adjustments.
We have a whole episode uh onthe percentage splits.
(12:12):
I will put a link in thedescription below so that way
you can find it that talks aboutthe healthy balance of what you
should be paying yourself, whatpercentage of profit you should
be aiming for, depending on yoursize, the size of your business.
So I recommend listening to thatif you're saying, okay, I've got
my snapshot.
Now what do I do with it?
Go find that episode.
Now, as promised, for those ofyou who don't have a PL handy,
(12:34):
maybe you don't have bookkeepingsoftware, maybe you haven't and
you haven't touched it all year,and so it is just a mess.
And but you want a snapshottoday.
Here's how you can do that.
So we want to get your grosssales.
So that's just like I said atthe top of the PL, that's where
you're gonna get that.
We can go back and you can lookin if it's through simple
practice, through Stripe,however, you're collecting
(12:54):
payments, you can pull the datafor year to date.
How much have you brought in?
How much revenue have youbrought in as a business?
Then you can pull bankstatements.
You can do year to date, you cango monthly.
What have we spent in our bank?
What outgoing debits have wecharged?
If you have a credit card, youcan pull credit card statements,
(13:15):
and we're gonna collect all ofthat.
You don't need to go through andline item everything.
It's okay to take the lump sum.
What is the amount we've spent?
If you have a team, you're gonnawant to log into your payroll
software and you can pull apayroll report that's gonna show
exactly what you've paid year todate on payroll on all of those
pieces.
And then we're gonna do theexact same process.
We're gonna take what you'vepaid yourself and divide it by
(13:36):
that gross revenue that youfound.
We're gonna take your bankstatements and credit card
statements, take that totalyou've spent, divide it by the
gross revenue, take yourpayroll, divide it by the gross
revenue.
All of those elements are gonnacome into play and we're gonna
figure out what we are actuallyspending, getting those
percentages.
Again, this is not gonna beperfect.
And if you don't have a PL, Irecommend getting something
(13:57):
working so that you have moreaccurate numbers because it is
really important.
While we are believers in thebeing able to manage your money
in a way that you don't have tolean on accounting documents, we
think on the day-to-day, youshould have a system in place
where you're actually utilizingit and you're leveraging it and
you're be able to be proactive.
While I think that is key, Ialso think having data is
(14:20):
essential, if nothing else, forfiling your taxes.
You have to have really accuratenumbers and really accurate
data.
And that's where having cleanbooks is going to be super
important.
If you're really small, then youmight benefit from trying to
manage it yourself or learning.
But again, if you're busy, ifthat's just I honestly think
that everybody should have abookkeeping support of some
(14:42):
kind, then I would reallyrecommend reaching out to you,
even if it's a lower cost uh VAor a service that offers
low-cost bookkeeping.
It's really important to yourbusiness that it's done and it's
done right.
All right, there's yourfive-minute snapshot.
So give it a shot.
Let me know how your numbersturn out.
If they turn out in a way thatyou are unhappy with or are
(15:03):
scary to you, or you start thisprocess and you're even just the
quick five-minute snapshot isoverwhelming.
Reach out for help.
It's really important that youfix this problem before it gets
bigger and bigger.
I'm gonna tell you right now,earning more money is not a
solution to the problem.
Businesses, a lot of times weget in this, oh, I just need to
hit this revenue goal, thisrevenue goal, this revenue mark.
(15:25):
And then all of a sudden thingswill be better and they won't
be.
Problems will just continue toexpand with us.
The more we make, the more ourexpenses go up, the more people
we need to hire, the higherpayroll goes up.
And you can see that this pipedream that when I hit a million,
when I hit two million, when Ihit whatever that that mile
marker is, once I hit that,everything will be great.
I'll be able to pay myself.
You'll find that it's you'restill going to be dealing with
(15:48):
the same issues just on a largerscale, and it becomes harder and
harder to undo.
So reach out for help in thedescription below is always a
link to meet with one of ourcoaches to see how we can best
help you grow your practice in afinancially healthy way.
Thanks for joining us on theTherapy Business Podcast.
Be sure to subscribe, leave areview, and share it with a
(16:09):
practice owner that you mayknow.
If your practice needs helpgetting organized with the
finances or just growing yourpractice, head to
therapybusinesspod dot com tolearn how we can help.
Are you curious about where all the money is
(00:01):
going in your practice and youjust don't really know where to
start or how to figure it out?
I'm going to teach you what Icall the five-minute financial
snapshot in your business, whereyou can get a really good grasp
on where you stand financially.
Are you in a financially healthyplace or not with your business?
And it only takes five minutes,and you're really just using
documents that you already haveon hand.
(00:23):
My name is Craig, and I'm theowner of Daisy Financial
Coaching.
Our team is on a mission to makeyour therapy practice
permanently profitable.
If you own a solo or grouppractice, we're here to help you
build a business that createsmore time, makes more money, and
serves more people.
This is the Therapy BusinessPodcast.
(00:47):
I know business finance can beoverly complicated, and there's
a million softwares out therethat can show you forecasts and
real detailed data on yourfinances.
And truthfully, what I hear frommost practice owners is it's
kind of just like mumbo jumboindustry jargon.
They don't fully get it.
And I'll be honest, sometimes Ilook at these softwares and what
(01:07):
they're spitting out, and it itfeels like I'm having to go back
through like calculus to figureout how to read these things.
It can be really confusing.
And what typically happens is werun these reports, or maybe we
export something from ourbookkeeping software or from
simple practice or whatever itis, and it just overwhelms us
that we just end up closing thetab and like uh I don't have
(01:29):
time to try and figure this out,or whatever.
We're still left confused in thesame place we were before.
So, how can we simply get a goodsnapshot on where our business
stands?
Well, I'm gonna talk you throughhow you can do this in a really
simple, easy way.
It's gonna give you a big bird'seye view of where your finances
currently stand, and all you'regonna need is your PL, an income
(01:50):
statement.
Now, if you don't have one atthe end of this episode, I'll
walk through the alternative.
So if you don't have bookkeepingsoftware, first of all, you need
something to be really trackingand monitoring your expenses so
that you have PLs, they'rereally important to the
business.
But if you don't, that's okay,I'm not judging.
At the end of this episode, I'mgonna walk through things you
(02:11):
can use so that you can still dothis exercise and get a good
picture of where you standfinancially.
And then let's go ahead and addthat bookkeeping software and
maybe even hiring a bookkeeper,outsourcing somebody to help
keep your books and yourexpenses organized and up to
date.
All right, so the five-minutesnapshot, taking your profit and
loss statement.
So if you're somewhere where youcan sit and follow along, I
(02:32):
recommend pull up pausing theepisode, pull up your PL so that
you can do this alongside me.
If you're at the gym in the car,that's okay.
I'm not gonna go super complex.
So you can still listen and geta good idea of what to do
because the process really ispretty simple.
The first thing we're gonna lookat is your revenue generated.
So at the very top, that is yourincome, all the money that you
(02:52):
have generated this this year.
It might be gross income at thevery top.
It's literally at the very topof your PL, the money you've
brought in.
If you're doing multipleofferings, you're gonna want to
take the collective amount, howmuch have you brought in total
across the board?
Now, I do want to say on yourPL, uh, this is I probably
should have said this before Ieven got into the statement of
(03:13):
what you're looking at.
Is depending on when you arelistening to this, determine it
that'll determine what PL youshould be pulling.
And what I mean by that is I'mrecording this here in October.
And so I would say go ahead andjust get a year-to-date PL.
We have enough months this yearthat we can go ahead and just
pull something from January totoday.
If you're listening to this andit's the beginning of the year,
(03:34):
then you're gonna want to justgo ahead and pull the previous
year's profit loss statement.
A good rule of thumb is if it'spast the midway point of the
year, a year-to-date one isgonna be okay.
So that means if it's afterJune, so if it's July and
beyond, go ahead.
You could probably pull ayear-to-date PL and use that
info.
Otherwise, if it's before July1st, I would say pull your
previous year's PL and use thatinformation.
(03:56):
So we're gonna look at theincome at the top.
That's our how much we'vebrought in as a business.
The next thing we want to lookat is I want to start with you.
I always like to start with theowner.
How much have you paid yourself?
Now, if you're running throughpayroll, you might need to pull
up a payroll document.
Sometimes in your PL it'll haveowner's compensation, it'll have
(04:17):
something in there that'lloutline what you've paid
yourself through payroll.
We want to calculate that.
And then I also want you tofigure out how much have you
taken in distributions.
So you might need to go back andfollow that paper trail.
Maybe depending on how you'vedone it, it might you have to
look at bank statements.
Maybe if you're prettyconsistent about what you're
paying yourself.
So if you pay yourself$5,000 amonth, then just multiply$5,000
(04:39):
times however many months we'vebeen.
I don't want you to get toostuck in the weeds of this.
Obviously, the more accurate youare, the better snapshot we're
gonna get.
But ballpark numbers are fine,they're gonna get you pretty
close to what you want.
So I would say and if yourincome has fluctuated pretty
drastically, meaning like maybeyou've skipped pay periods,
(05:01):
maybe sometimes you pay yourselftwo thousand, sometimes you pay
yourself five thousand, then Iwould probably try and go back
and look because again, what weperceive, what we think we paid
ourselves may be reallydifferent than what we actually
did.
But again, if you pay yourselfpretty consistently, if it's
ranged from four to fivethousand, then calculating it,
just coming up with a ballparkshould be fine.
(05:22):
We want to figure out whatyou've paid yourself so far this
year.
So let's just say top line is ahundred thousand, then I've paid
myself so far this year, let'ssay thirty thousand.
Okay, so that will give us agood idea.
30,000 of that 100,000 got paidto you.
So we're gonna get a percentage.
(05:42):
So 30,000 divided by 100,000means that so far year to date,
if that those numbers were you,you've paid yourself 30% of what
you've brought in.
So that's an important thing tonote.
So we're gonna write that down.
I'm being compensated.
30% of all sales that have comein have gone back to me as the
business owner.
The next thing we want to lookat is our taxes.
(06:03):
How much have we paid into taxesthis year?
So again, whether it's payroll.
Now I want you to, if we're ifyou have employees, we are
thinking solely on your taxes.
How much have you personallytaken?
So, how much has been taken outof your paychecks?
How much has the company paidfor on your behalf in taxes?
And then how much have you, ifyou've had to go in and make
(06:25):
quarterly tax payments, any ofthose, how much have you paid
into that so far?
A lot of this will be on the PL.
However, again, if you have awhole team, it's gonna be
probably lumped in with payrolltaxes, and so you'll want to go
and look into your payrollsoftware to pull that data and
see.
You can just pull your mostrecent pay stub, and it's gonna
go ahead and tell you exactlywhat those numbers are.
(06:45):
So we want to get a generalidea.
So let's say, again, my I took Ipaid myself 30,000.
Um, and then on top of that, wepaid an extra 10% in taxes.
So another 10,000 in taxes.
So I know 30 that 30% is goingto me, 10% is going to taxes.
Next, we want to look at ouroperating expenses.
(07:06):
Now, this is gonna be the bigone, and if you own a group
practice, you're gonna have twobig pieces of this.
You're gonna have your payroll,and then you're gonna have your
overhead expenses.
This is simply taking ouroperating expenses, and on your
PL, it will have a totaloperating expenses.
Uh as they list out everythingyou're spending money on at the
bottom of that section will betotal operating expenses.
(07:30):
We're gonna take that number.
Now, if taxes were included inthere, if your owner's
compensation was included there,we're gonna want to pull that
out because we don't want thatto be part of the picture.
So, again, let's say youroperating expenses this year
were$70,000, and we already knowthat$30,000 got paid to you and
10 got paid to taxes.
(07:50):
So maybe$30,000 or sorry, yeah,$30,000 is what we actually paid
in operating expenses once wetake those things out.
So again,$30,000 as compared to$100,000, that's 30% again.
So we're getting a good idea ofwhere do we stand
percentage-wise financiallyacross the board on all these
(08:11):
areas.
The last one we're wanting to weare gonna want to look at is
profit, and that's at thebottom.
That's why they call it thebottom line, your net profit.
We want to see what is thatnumber, we're gonna divide it by
the top, the revenue number.
So we're gonna take that, divideit by the 100,000.
One thing we want to note is ifyou've been paying yourself
distributions, not throughpayroll, they're likely not in
(08:33):
the PL.
So we're gonna want to take thatinto account.
So again, if you've paidyourself 15,000 in distributions
and your net profit at thebottom says it is 20,000, well,
then we need to take away that15 because of that profit you
paid yourself, and all that'sleft is the five.
And so that's five percent.
This is a way to get a goodclear picture percentage-wise of
(08:56):
where your money is going.
Now, we know healthy businessescan vary drastically in this
realm.
Uh, if you want to know whereyou stand payroll-wise, it's
okay to stuff to take that asits own percentage and say,
okay, out of those operatingexpenses, what is my payroll
compared to my revenue?
What is my operating expensescompared to my revenue?
You don't need to get too deepinto the weeds.
(09:18):
The more detailed you are, likeI said before, the more accurate
your numbers are gonna be.
But getting a general idea ofprofitability-wise,
percentage-wise, where are we?
What percentage of revenue isgoing to me?
What percentage is going totaxes?
What percentage is going tooperating expenses?
If you get stuck on the taxpiece, for example.
(09:38):
So maybe as I was saying, youmight need to go back through
pay stubs and pull those to getout.
If it's overwhelming to you,then it's okay to just say, you
know what, I'm gonna just figureout my operating expenses and my
owners pay for now and profit,and just leave the tax piece to
the side.
What we want to know really inthis snapshot is just where do
we stand in general?
(09:59):
Now, my example was a 30%operating expense number.
Odds are that's gonna be a solopractice, a group practice is
likely not gonna have 30% goingto operating expenses.
But right there, that is areally healthy number.
30% is a very healthy number forany size business.
Honestly, if you're a largebusiness and you're only
spending 30%, uh, that'sfantastic.
(10:22):
You might even be able toallocate more funds to growth if
you're struggling to gettraction or struggling to grow.
If you are a virtual therapistor you have a virtual only
practice, it's likely that yournumbers will be lower.
Now, again, if you're a largerbusiness, you might be looking
at 50% going to operatingexpenses, 50 to 60%.
And that's still okay.
(10:43):
But what we want to see, if yourun these numbers and you see
80% go into operating expenses,which let me tell you is
incredibly normal.
And that's what we largely seewhen people come to see us is
they're sitting around 80%operating expenses, and they're
we're going, no wonder you'restressed out.
No wonder you're not payingyourself what you need to be
paying yourself.
Once you can identify that, thenit's the next step of okay, I
(11:06):
have I need to fix this problem.
Why, why do what are we spendingthis money on?
Why is it this way?
Why are we stuck?
What do we need to change?
Is it something in our paystructure for our team?
Are we overcompensating them?
Are we wasting a lot of money onthe overhead side?
Is our rent way too expensive?
What are the pieces that arehurting us?
(11:27):
And then we can also look andsay, okay, well, if I bring in
if I doubled my revenue, wouldthe problem still persist?
And kind of playing around withthose numbers and saying, how
can we systematically bringthose numbers down?
Do you have debt?
Are you servicing debt?
Could that be why?
When you're looking at a PL, andthat's something to note is your
debt payments are not includedon there.
So your monthly minimum paymentstoward debt will not be included
(11:49):
on a PL.
And so we want to take that intoaccount.
So if you're paying monthlydebts, we want to add that on
top of your operating expensepercentage that we calculated
earlier, so that way we get areal good idea of where the
money's actually going.
So take all those pieces intoaccount, and then from there,
it's moving forward and makingthe necessary tweaks,
adjustments.
We have a whole episode uh onthe percentage splits.
(12:12):
I will put a link in thedescription below so that way
you can find it that talks aboutthe healthy balance of what you
should be paying yourself, whatpercentage of profit you should
be aiming for, depending on yoursize, the size of your business.
So I recommend listening to thatif you're saying, okay, I've got
my snapshot.
Now what do I do with it?
Go find that episode.
Now, as promised, for those ofyou who don't have a PL handy,
(12:34):
maybe you don't have bookkeepingsoftware, maybe you haven't and
you haven't touched it all year,and so it is just a mess.
And but you want a snapshottoday.
Here's how you can do that.
So we want to get your grosssales.
So that's just like I said atthe top of the PL, that's where
you're gonna get that.
We can go back and you can lookin if it's through simple
practice, through Stripe,however, you're collecting
(12:54):
payments, you can pull the datafor year to date.
How much have you brought in?
How much revenue have youbrought in as a business?
Then you can pull bankstatements.
You can do year to date, you cango monthly.
What have we spent in our bank?
What outgoing debits have wecharged?
If you have a credit card, youcan pull credit card statements,
(13:15):
and we're gonna collect all ofthat.
You don't need to go through andline item everything.
It's okay to take the lump sum.
What is the amount we've spent?
If you have a team, you're gonnawant to log into your payroll
software and you can pull apayroll report that's gonna show
exactly what you've paid year todate on payroll on all of those
pieces.
And then we're gonna do theexact same process.
We're gonna take what you'vepaid yourself and divide it by
(13:36):
that gross revenue that youfound.
We're gonna take your bankstatements and credit card
statements, take that totalyou've spent, divide it by the
gross revenue, take yourpayroll, divide it by the gross
revenue.
All of those elements are gonnacome into play and we're gonna
figure out what we are actuallyspending, getting those
percentages.
Again, this is not gonna beperfect.
And if you don't have a PL, Irecommend getting something
(13:57):
working so that you have moreaccurate numbers because it is
really important.
While we are believers in thebeing able to manage your money
in a way that you don't have tolean on accounting documents, we
think on the day-to-day, youshould have a system in place
where you're actually utilizingit and you're leveraging it and
you're be able to be proactive.
While I think that is key, Ialso think having data is
(14:20):
essential, if nothing else, forfiling your taxes.
You have to have really accuratenumbers and really accurate
data.
And that's where having cleanbooks is going to be super
important.
If you're really small, then youmight benefit from trying to
manage it yourself or learning.
But again, if you're busy, ifthat's just I honestly think
that everybody should have abookkeeping support of some
(14:42):
kind, then I would reallyrecommend reaching out to you,
even if it's a lower cost uh VAor a service that offers
low-cost bookkeeping.
It's really important to yourbusiness that it's done and it's
done right.
All right, there's yourfive-minute snapshot.
So give it a shot.
Let me know how your numbersturn out.
If they turn out in a way thatyou are unhappy with or are
(15:03):
scary to you, or you start thisprocess and you're even just the
quick five-minute snapshot isoverwhelming.
Reach out for help.
It's really important that youfix this problem before it gets
bigger and bigger.
I'm gonna tell you right now,earning more money is not a
solution to the problem.
Businesses, a lot of times weget in this, oh, I just need to
hit this revenue goal, thisrevenue goal, this revenue mark.
(15:25):
And then all of a sudden thingswill be better and they won't
be.
Problems will just continue toexpand with us.
The more we make, the more ourexpenses go up, the more people
we need to hire, the higherpayroll goes up.
And you can see that this pipedream that when I hit a million,
when I hit two million, when Ihit whatever that that mile
marker is, once I hit that,everything will be great.
I'll be able to pay myself.
You'll find that it's you'restill going to be dealing with
(15:48):
the same issues just on a largerscale, and it becomes harder and
harder to undo.
So reach out for help in thedescription below is always a
link to meet with one of ourcoaches to see how we can best
help you grow your practice in afinancially healthy way.
Thanks for joining us on theTherapy Business Podcast.
Be sure to subscribe, leave areview, and share it with a
(16:09):
practice owner that you mayknow.
If your practice needs helpgetting organized with the
finances or just growing yourpractice, head to
therapybusinesspod dot com tolearn how we can help.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.