November 12, 2025 • 17 mins
We share a simple framework to sort every cost in your practice into COGS, investments, overhead, and fluff so you can cut waste and fund growth. We show how to prove ROI with time and money, fix leaky roles, and turn savings into smarter investments.
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Episode Transcript
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SPEAKER_00 (00:00):
Cutting your expenses is really important in
a business and making sure thatyou are as lean as you could
possibly be so that you caninvest in growth, that you can
continue to grow in afinancially healthy way.
Part of this is understandingyour expenses.
And what I mean by that isknowing which ones are
necessary, which ones maybe youcould do without, and how can we
(00:21):
identify those?
Well, today I'm going to guideyou through that and the three
easy categories, three threecategories that we can easily
place these in so that you canget really crystal clear on
where your money's going, whichones are vital, and which ones
maybe you could just let go.
My name is Craig, and I'm theowner of DAC Financial Coaching.
Our team is on a mission to makeyour therapy practice
(00:42):
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.
I know cutting expenses can beoverwhelming.
I I tried to once a quarter oronce every six months or so look
(01:06):
at my expenses and trim somefat, see if there's areas of
opportunity for me to trim, toremove, to figure out am I
getting an ROI from certainthings?
Maybe I was uh, you know, sixmonths ago, but is it still
providing an ROI to thebusiness?
That's really important, but theprocess can be overwhelming.
Uh, even for me, when I pull myvendor list or when I look at my
(01:27):
bank statement to see what aremy expenses, what have I spent
money on this past quarter, thelist itself can stress me out.
And I sometimes just want toavoid that task altogether.
What I found super helpful isfor me to break it down into
three really clear, really easyto understand categories.
And in fact, you can use a PL tohelp support this process if you
(01:49):
want to.
You don't have to, but you canpull your PL and use some of
these categories to identifywhat's what's key, what's
important, and how can wedistinguish what needs to stay.
So let's talk about those threecategories.
The first one is your cost ofgoods, this is your cogs.
So if you're looking at yourprofit and loss statement, the
first type of operating expenseis cogs.
(02:12):
This basically means if youdidn't have these expenses, you
couldn't run your business.
A t-shirt manufacturer, a cogwould be the t-shirts.
If they print t-shirts, let'slet's say they print graphic T's
with uh funny memes on thefront.
If they did not purchaset-shirts, they could not have a
(02:33):
business, they would havenothing to sell, right?
That seems prettystraightforward.
So t-shirts would be a cog.
It has to stay.
Now, there's obviouslyopportunities.
Maybe we could find cheapershirts, we could find different
vendors, but cogs are the thingsthat you have to have in order
to run your business.
Now, for therapy practices, youprobably don't have a ton of
cogs.
If you have contractors, thatwould be cogs because those
(02:56):
contractors are not part of yourbusiness, they are separate
entities, and so you'recontracting them out.
So they would fall under yourcosts of goods sold, your cogs,
and then supplies.
If you're in physical therapy,so maybe disinfecting wipes,
towels, bands, tape, all ofthose things, although those
could even fall under theoperating expenses, just depends
on how you're utilizing them.
(03:17):
But if you're gonna make surethat you have a clean
environment, you need cleaningsupplies.
If you're going to, you mightneed exercise balls, depending
on the types of physical therapyyou're utilizing, you might need
those things.
And same thing with um regulartherapy, mental health therapy.
If there's certain things thatyou need depending on the style
or type of therapy you're doing,there might be cogs that you
(03:39):
have in place.
Massage therapy, you're gonnaneed certain supplies in order
to fulfill that.
For the most part, if you'reout, I know a lot of our
listeners are mental healththerapists, really, contractors
is the big one.
Now, therapists, even if they'reW-2.
So if you own a group practiceand you have therapists under
you serving clients, that couldbe considered a cog simply
(04:02):
because if they don't you don'thave that therapist to meet with
that client, you're not gonna bemaking that money.
I always think about it thisway.
If that therapist quit tomorrow,what would happen to their
clients?
Right?
We have to pay them in order toserve that client.
So that could be considered acog.
However, I prefer to put theminto the next category, which is
investments.
So our first operating expensetype is cogs.
(04:25):
The next one is investments, andthis is the most important one.
And I'm not talking about yourretirement or the stock market,
we're talking about investmentsin yourself and in your
business.
We want a majority of theexpenses in our business to be
investments.
We want them to generate an ROI.
We want you to spend money thatis going to bring back either
(04:47):
more money or more time.
So that is key.
If we focus on making sure thebulk of our expenses fall under
this investment category, that'sgoing to be huge.
And so as you're going throughthis exercise and you're looking
at each expense and decidingwhich category it goes into,
this can be eye-opening.
You may realize, wow, I got alot more expenses in these other
(05:07):
categories.
Whereas the investments one, Idon't really have a lot of
things that are generating anROI.
Maybe that's why we'restruggling with growth.
Maybe that's why we have such acash crunch, is because the
money we're spending is notgetting us anything back.
So it's really important.
So, like I said, money or timeis the ROI we're looking for.
A salesperson, software thatcuts your billing time in half.
(05:30):
Those are things that provide adirect ROI.
A salesperson, you're gonna paythem a salary, they're gonna go
out and generate X number a yearin revenue.
That's really important.
If you have a software that'scutting again, billing, let's
say you have uh you're you get asoftware to help you with your
note-taking, your billing, thatmay cut the time down in half.
That's time you can now reinvestin something else.
(05:51):
Coaches, consultants, I hate tosay it as a coaching business
ourselves.
We are investments.
A good coach should provide adirect ROI.
And I tell our clients all thetime when they come see us, if
they are already seeing a coachor if if they're already if
they're working with us andthey're have other coaches or
they're looking at hiringsomeone else, it's let's look at
the ROI.
And even with us, when it comestime to renew, did you get your
(06:15):
ROI?
Did you make more back than youthan you put in with us?
And typically our clients see afive to 10 times ROI on their
investment.
And for us too, even if theywere to stop coaching with us,
the systems we put in place itgoes in perpetuity, meaning
every year, if they continue todo what we showed them, they're
gonna see more money coming in.
(06:36):
So they're gonna generate thatROI for the life of their
business.
That is key.
So if you have coaches,consultants, if you're thinking
about hiring a marketing coachor a marketing consultant, we
want to make sure that there isan ROI.
That's a great question to ask,even if you're considering
adding this expense.
Is what ROI can I expect?
How do you get an ROI for yourclients?
(06:57):
Where do they typically see thatROI coming in?
Your coach should be able toidentify that, whether it's a
ROI in your time or whether it'san ROI in real dollars, how can
they provide that for you?
Or at least help you get that.
Again, a coach isn't alwaysgoing to hand it to you, but
they can at least show you thepath, help you get that quicker
and faster.
(07:18):
So we talked about the two typestime and money.
So let's talk about time first.
So if it saves you time, there'san ROI there.
The best way to figure this outis what is your time worth?
So think about an hourly rate.
If you could pinpoint an hourlyrate for yourself, what would
that be?
And then we're looking at thisinvestment, is that this thing
we're spending money on,whatever it is, if it's saving
(07:39):
you time, how many hours is itsaving you?
So, for example, let's say abookkeeper, somebody to manage
your books, reconcile yourbooks.
If on average for a therapypractice, um, it takes maybe
five to 15 hours per month.
So let's just say 10 hours permonth for a licensed, certified
bookkeeper to manage your books.
Now, if you were to do ityourself, it would on average
(08:03):
take between three to 10 timeslonger, just depending on your
business.
If you do it, if you were tostay on top of it, or if you
were just to every quarter tryand clean everything up, it can
take three to 10 times longer.
So let's just go on theconservative side of that and
say three times.
So three times longer than 10.
So that's 30 hours per month ofyour time that you would be
spending on managing your booksand doing it correctly.
(08:26):
Now, if we were to calculateyour hourly rate at$100 an hour,
that's$3,000 per month that youwould recoup.
So if you were spending 30hours,$100,$100 an hour,$3,000 a
month.
Now, if we go hire a bookkeeperfor$1,000 a month, then we've
just recouped$3,000 worth of ourtime.
(08:47):
We're paying them to do it.
Now we have those 30 hours backthat we can then focus on
revenue generating activities,marketing, getting new clients,
sales calls, whatever it is.
So even more than that$3,000worth of our time that we got
back, we're also going to seemore financial ROI on the back
end by doing more revenuegenerating activities during
(09:09):
those hours.
So you can see right there adirect ROI between what we're
getting and what we're paying.
Now, with these investments, youcan always look to see if I'm
getting the best ROI possible.
You might even say, is there ifI'm not super in love with my
bookkeeper, could I maybe saveby finding someone who's got a
lower hourly rate?
(09:29):
And that's fine to do.
But where I find is sometimes welook at these these pieces and
we see maybe that time factorcan feel like it's just an
unnecessary expense when inreality it's actually saving you
money and time purely just fromthe hours you would normally
spend on it if you did ityourself.
Now your therapists, let's talkabout financial investments.
(09:50):
They should be a financialinvestment.
So they should be generatingmore revenue than what you pay
them.
So again, if you're paying thema percentage, if they're taking
half and you have a clientpaying you$200 per session, you
give your therapist$100.
That just means for every$100you pay them, the company's
making$200, right?
(10:11):
So it's an investment.
You're making more back thanwhat you're paying them.
So that is the key here is weare getting every time they take
on a client, it's worth it to usbecause we are making money.
That is the idea here.
If you find that you're losingmoney on a therapist, maybe
you're paying a salary, maybeyou have bonuses and incentives
in place, and you realize, wow,we are actually in the red on
(10:32):
this person, then that's aproblem to address because
they're no longer an investment.
This category of investments canbe tricky because a lot of times
we may have emotional ties toexpenses, we may like something,
and we often want to say, well,it's it's an investment, you
know, it's I feel like I'mgetting this back, or maybe it's
intangible, but it providespeace of mind or it provides all
(10:53):
these things, which can be very,very true.
But a good filter for thisinvestment category is data.
If you don't have data that canprovide a point to a direct ROI
number, then let's not put it inthis investment category.
So it would go into this nextcategory, the third and final
one, which is overhead.
(11:13):
So that is ex cost that isexpenses that are costing your
business money, but it helps thebusiness function.
So if you have certain thingsthat cost the business money,
but help it helps the engine runto an extent, then it's overhead
cost.
There's a lot of different waysto define it, but I feel like
(11:33):
that is the simplest way for usto, in at least in this
exercise, to think about it.
An overhead cost costs thebusiness money.
There's not a direct ROI.
This could be your office rent,this could be office supplies,
uh, different softwares that youmight have.
It could be um meals or teammeals or whatever, a lot of
different things can fall intothis category.
(11:55):
Things that don't provide adirect ROI.
Again, there might be some ROIfor feeding your team lunch
every Friday.
You could for morale, there's aboost.
There's a lot of differentfactors that can come into play,
but it's it's an intangible.
We can't calculate what are wegetting back in return on that
expense.
So it's gonna fall underoverhead.
(12:17):
It's costing you money to do it.
Doesn't mean it's not importantor valuable, but it's costing
you money.
Overhead is the greatestopportunity to make cuts.
We again want a majority of yourexpenses to be investments,
things that are growing thebusiness or benefiting you as
the business owner and savingyour time and energy.
(12:38):
So let's look at differentoverhead expenses, and it's
okay, again, some of them aregonna be ones that are easily
you're like, yeah, that's not anecessary one.
But some of them, just becauseit's an overhead expense doesn't
mean it's not necessary.
Licenses, for example, makingsure that you're staying up to
date on certifications, thoseare all really, really important
(12:59):
overhead costs.
They may not have a direct ROIalways, but they are important
if you and they might they mighteven be a cog because you can't
really do business if you're notlicensed, right?
So staying up to date on certainthings might even fall into the
cogs category anyway.
But overhead expenses, pointbeing, some of them are
necessary, some of them it'sokay to have them.
(13:19):
I'm not saying having overheadexpenses, you need to go cut
them all.
You're gonna need or want someof them, they're important.
You may want an office buildingso that you can have in-person
therapy because you think that'simportant.
Like I value that, that's one ofour core values, so it's
important to us and it's worththe money that it's costing us
in order to do so.
(13:40):
They're also kind of going backto that justification piece of
we can easily justify things asbeing investments.
This is where I really try todraw that line, like I said,
because that is one where I'vehad pushback.
Well, you know, an office is aninvestment because you know,
some people will only see atherapist if they can see them
in person.
And so, you know, by having anoffice, we're opening ourselves
(14:03):
to more business and moreclients.
And that might be true, butagain, that data point is hard
to quantify.
So that's why we look at it asan overhead.
It's okay if you want to keepit, it's okay if you consider it
a necessary expense.
We just want to look at thesethings.
So, some of these, like I said,may provide that ROI.
You may have an administrativeassistant who maybe provides an
ROI that you just can't quitepinpoint.
(14:25):
Um, that's okay.
Doesn't mean you have to go firethem.
It could be an opportunity ifyou're trying to cut expenses.
If you're in the red, you'reunderwater.
Maybe that is something to lookat.
But again, really pinpointingthese things and just becoming
aware, I think, is the key here.
We're not going about this withany judgment or any of that.
It's just I want to be aware ofwhere's my money going.
(14:47):
And that doesn't mean I have tochange it, doesn't mean that
there's anything wrong.
Maybe you are in a financiallyhealthy place and you're just
trying to figure out where's mymoney going, and that's okay.
So finding these threecategories, and then I'm gonna
give you a fourth bonuscategory, which is what we call
fluff.
This is expenses that are juststill floating around.
If you have anything that youare didn't felt feel like
fitting cogs investments oroverhead, that's called fluff.
(15:10):
And let's just make things easyon us and go ahead and just cut
those because they're not like Isaid, overhead is something that
may cost you money, but itbenefits the business.
Investments are things that aregenerating an ROI.
Fluff is neither of thosethings.
This might be if you'regrabbing, and this I guess
(15:30):
wouldn't even be really abusiness expense, but if you're
grabbing uh drive-thru food onthe way to meeting a client,
right?
You see, that's fluff.
Those are things that are notbenefiting anything or anybody,
and honestly, it's not evenreally a write-offable expense.
So getting rid of those fluffpieces, any expenses that are
just extra, you don't need them,that is the best place to start.
Let's wipe out that fluff.
(15:52):
We love working on this stuff.
So if you need help, as always,in the show notes is a link to
schedule a free consultationwith our coaches.
They can help you figure out howwe can optimize our finances,
how can we look for thoseinvestments?
And if you've been looking tomake an investment in yourself
and your business by finding acoach who can help you get
organized with your money, whocan help you create those
systems, who can help you growyour business, that's what we
(16:14):
do.
And like I said, we can generatean ROI for you.
We can put our expense into thatinvestment category to make sure
that you are making more moneyback than what you pay us.
And our coaches can show you howin that consultation.
Thank you so much for joining usagain.
I'm super grateful for all ofour listeners, everybody, all of
our practice owners out therewho are putting in the time and
(16:35):
energy.
It means a lot.
And not even just on a selfishside of you're that you're
listening to me ramble on for 15to 20 minutes a week.
It's that you're investing inyour business.
And this is a free, you'reinvesting time.
It's free to listen, but you'retaking time out of your day to
invest in your growth, to investin your business.
And I think that's somethingworth acknowledging.
(16:55):
So thank you for investing inyourself, caring about your
business enough to listen tothis and take action.
Thanks for joining us on theTherapy Business Podcast.
Be sure to subscribe, leave areview, and share it with a
practice owner that you mayknow.
If your practice needs helpgetting organized with its
finances, or just growing yourpractice, head to
(17:16):
therapybusinesspod.com to learnhow we can help.
Cutting your expenses is really important in
a business and making sure thatyou are as lean as you could
possibly be so that you caninvest in growth, that you can
continue to grow in afinancially healthy way.
Part of this is understandingyour expenses.
And what I mean by that isknowing which ones are
necessary, which ones maybe youcould do without, and how can we
(00:21):
identify those?
Well, today I'm going to guideyou through that and the three
easy categories, three threecategories that we can easily
place these in so that you canget really crystal clear on
where your money's going, whichones are vital, and which ones
maybe you could just let go.
My name is Craig, and I'm theowner of DAC Financial Coaching.
Our team is on a mission to makeyour therapy practice
(00:42):
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.
I know cutting expenses can beoverwhelming.
I I tried to once a quarter oronce every six months or so look
(01:06):
at my expenses and trim somefat, see if there's areas of
opportunity for me to trim, toremove, to figure out am I
getting an ROI from certainthings?
Maybe I was uh, you know, sixmonths ago, but is it still
providing an ROI to thebusiness?
That's really important, but theprocess can be overwhelming.
Uh, even for me, when I pull myvendor list or when I look at my
(01:27):
bank statement to see what aremy expenses, what have I spent
money on this past quarter, thelist itself can stress me out.
And I sometimes just want toavoid that task altogether.
What I found super helpful isfor me to break it down into
three really clear, really easyto understand categories.
And in fact, you can use a PL tohelp support this process if you
(01:49):
want to.
You don't have to, but you canpull your PL and use some of
these categories to identifywhat's what's key, what's
important, and how can wedistinguish what needs to stay.
So let's talk about those threecategories.
The first one is your cost ofgoods, this is your cogs.
So if you're looking at yourprofit and loss statement, the
first type of operating expenseis cogs.
(02:12):
This basically means if youdidn't have these expenses, you
couldn't run your business.
A t-shirt manufacturer, a cogwould be the t-shirts.
If they print t-shirts, let'slet's say they print graphic T's
with uh funny memes on thefront.
If they did not purchaset-shirts, they could not have a
(02:33):
business, they would havenothing to sell, right?
That seems prettystraightforward.
So t-shirts would be a cog.
It has to stay.
Now, there's obviouslyopportunities.
Maybe we could find cheapershirts, we could find different
vendors, but cogs are the thingsthat you have to have in order
to run your business.
Now, for therapy practices, youprobably don't have a ton of
cogs.
If you have contractors, thatwould be cogs because those
(02:56):
contractors are not part of yourbusiness, they are separate
entities, and so you'recontracting them out.
So they would fall under yourcosts of goods sold, your cogs,
and then supplies.
If you're in physical therapy,so maybe disinfecting wipes,
towels, bands, tape, all ofthose things, although those
could even fall under theoperating expenses, just depends
on how you're utilizing them.
(03:17):
But if you're gonna make surethat you have a clean
environment, you need cleaningsupplies.
If you're going to, you mightneed exercise balls, depending
on the types of physical therapyyou're utilizing, you might need
those things.
And same thing with um regulartherapy, mental health therapy.
If there's certain things thatyou need depending on the style
or type of therapy you're doing,there might be cogs that you
(03:39):
have in place.
Massage therapy, you're gonnaneed certain supplies in order
to fulfill that.
For the most part, if you'reout, I know a lot of our
listeners are mental healththerapists, really, contractors
is the big one.
Now, therapists, even if they'reW-2.
So if you own a group practiceand you have therapists under
you serving clients, that couldbe considered a cog simply
(04:02):
because if they don't you don'thave that therapist to meet with
that client, you're not gonna bemaking that money.
I always think about it thisway.
If that therapist quit tomorrow,what would happen to their
clients?
Right?
We have to pay them in order toserve that client.
So that could be considered acog.
However, I prefer to put theminto the next category, which is
investments.
So our first operating expensetype is cogs.
(04:25):
The next one is investments, andthis is the most important one.
And I'm not talking about yourretirement or the stock market,
we're talking about investmentsin yourself and in your
business.
We want a majority of theexpenses in our business to be
investments.
We want them to generate an ROI.
We want you to spend money thatis going to bring back either
(04:47):
more money or more time.
So that is key.
If we focus on making sure thebulk of our expenses fall under
this investment category, that'sgoing to be huge.
And so as you're going throughthis exercise and you're looking
at each expense and decidingwhich category it goes into,
this can be eye-opening.
You may realize, wow, I got alot more expenses in these other
(05:07):
categories.
Whereas the investments one, Idon't really have a lot of
things that are generating anROI.
Maybe that's why we'restruggling with growth.
Maybe that's why we have such acash crunch, is because the
money we're spending is notgetting us anything back.
So it's really important.
So, like I said, money or timeis the ROI we're looking for.
A salesperson, software thatcuts your billing time in half.
(05:30):
Those are things that provide adirect ROI.
A salesperson, you're gonna paythem a salary, they're gonna go
out and generate X number a yearin revenue.
That's really important.
If you have a software that'scutting again, billing, let's
say you have uh you're you get asoftware to help you with your
note-taking, your billing, thatmay cut the time down in half.
That's time you can now reinvestin something else.
(05:51):
Coaches, consultants, I hate tosay it as a coaching business
ourselves.
We are investments.
A good coach should provide adirect ROI.
And I tell our clients all thetime when they come see us, if
they are already seeing a coachor if if they're already if
they're working with us andthey're have other coaches or
they're looking at hiringsomeone else, it's let's look at
the ROI.
And even with us, when it comestime to renew, did you get your
(06:15):
ROI?
Did you make more back than youthan you put in with us?
And typically our clients see afive to 10 times ROI on their
investment.
And for us too, even if theywere to stop coaching with us,
the systems we put in place itgoes in perpetuity, meaning
every year, if they continue todo what we showed them, they're
gonna see more money coming in.
(06:36):
So they're gonna generate thatROI for the life of their
business.
That is key.
So if you have coaches,consultants, if you're thinking
about hiring a marketing coachor a marketing consultant, we
want to make sure that there isan ROI.
That's a great question to ask,even if you're considering
adding this expense.
Is what ROI can I expect?
How do you get an ROI for yourclients?
(06:57):
Where do they typically see thatROI coming in?
Your coach should be able toidentify that, whether it's a
ROI in your time or whether it'san ROI in real dollars, how can
they provide that for you?
Or at least help you get that.
Again, a coach isn't alwaysgoing to hand it to you, but
they can at least show you thepath, help you get that quicker
and faster.
(07:18):
So we talked about the two typestime and money.
So let's talk about time first.
So if it saves you time, there'san ROI there.
The best way to figure this outis what is your time worth?
So think about an hourly rate.
If you could pinpoint an hourlyrate for yourself, what would
that be?
And then we're looking at thisinvestment, is that this thing
we're spending money on,whatever it is, if it's saving
(07:39):
you time, how many hours is itsaving you?
So, for example, let's say abookkeeper, somebody to manage
your books, reconcile yourbooks.
If on average for a therapypractice, um, it takes maybe
five to 15 hours per month.
So let's just say 10 hours permonth for a licensed, certified
bookkeeper to manage your books.
Now, if you were to do ityourself, it would on average
(08:03):
take between three to 10 timeslonger, just depending on your
business.
If you do it, if you were tostay on top of it, or if you
were just to every quarter tryand clean everything up, it can
take three to 10 times longer.
So let's just go on theconservative side of that and
say three times.
So three times longer than 10.
So that's 30 hours per month ofyour time that you would be
spending on managing your booksand doing it correctly.
(08:26):
Now, if we were to calculateyour hourly rate at$100 an hour,
that's$3,000 per month that youwould recoup.
So if you were spending 30hours,$100,$100 an hour,$3,000 a
month.
Now, if we go hire a bookkeeperfor$1,000 a month, then we've
just recouped$3,000 worth of ourtime.
(08:47):
We're paying them to do it.
Now we have those 30 hours backthat we can then focus on
revenue generating activities,marketing, getting new clients,
sales calls, whatever it is.
So even more than that$3,000worth of our time that we got
back, we're also going to seemore financial ROI on the back
end by doing more revenuegenerating activities during
(09:09):
those hours.
So you can see right there adirect ROI between what we're
getting and what we're paying.
Now, with these investments, youcan always look to see if I'm
getting the best ROI possible.
You might even say, is there ifI'm not super in love with my
bookkeeper, could I maybe saveby finding someone who's got a
lower hourly rate?
(09:29):
And that's fine to do.
But where I find is sometimes welook at these these pieces and
we see maybe that time factorcan feel like it's just an
unnecessary expense when inreality it's actually saving you
money and time purely just fromthe hours you would normally
spend on it if you did ityourself.
Now your therapists, let's talkabout financial investments.
(09:50):
They should be a financialinvestment.
So they should be generatingmore revenue than what you pay
them.
So again, if you're paying thema percentage, if they're taking
half and you have a clientpaying you$200 per session, you
give your therapist$100.
That just means for every$100you pay them, the company's
making$200, right?
(10:11):
So it's an investment.
You're making more back thanwhat you're paying them.
So that is the key here is weare getting every time they take
on a client, it's worth it to usbecause we are making money.
That is the idea here.
If you find that you're losingmoney on a therapist, maybe
you're paying a salary, maybeyou have bonuses and incentives
in place, and you realize, wow,we are actually in the red on
(10:32):
this person, then that's aproblem to address because
they're no longer an investment.
This category of investments canbe tricky because a lot of times
we may have emotional ties toexpenses, we may like something,
and we often want to say, well,it's it's an investment, you
know, it's I feel like I'mgetting this back, or maybe it's
intangible, but it providespeace of mind or it provides all
(10:53):
these things, which can be very,very true.
But a good filter for thisinvestment category is data.
If you don't have data that canprovide a point to a direct ROI
number, then let's not put it inthis investment category.
So it would go into this nextcategory, the third and final
one, which is overhead.
(11:13):
So that is ex cost that isexpenses that are costing your
business money, but it helps thebusiness function.
So if you have certain thingsthat cost the business money,
but help it helps the engine runto an extent, then it's overhead
cost.
There's a lot of different waysto define it, but I feel like
(11:33):
that is the simplest way for usto, in at least in this
exercise, to think about it.
An overhead cost costs thebusiness money.
There's not a direct ROI.
This could be your office rent,this could be office supplies,
uh, different softwares that youmight have.
It could be um meals or teammeals or whatever, a lot of
different things can fall intothis category.
(11:55):
Things that don't provide adirect ROI.
Again, there might be some ROIfor feeding your team lunch
every Friday.
You could for morale, there's aboost.
There's a lot of differentfactors that can come into play,
but it's it's an intangible.
We can't calculate what are wegetting back in return on that
expense.
So it's gonna fall underoverhead.
(12:17):
It's costing you money to do it.
Doesn't mean it's not importantor valuable, but it's costing
you money.
Overhead is the greatestopportunity to make cuts.
We again want a majority of yourexpenses to be investments,
things that are growing thebusiness or benefiting you as
the business owner and savingyour time and energy.
(12:38):
So let's look at differentoverhead expenses, and it's
okay, again, some of them aregonna be ones that are easily
you're like, yeah, that's not anecessary one.
But some of them, just becauseit's an overhead expense doesn't
mean it's not necessary.
Licenses, for example, makingsure that you're staying up to
date on certifications, thoseare all really, really important
(12:59):
overhead costs.
They may not have a direct ROIalways, but they are important
if you and they might they mighteven be a cog because you can't
really do business if you're notlicensed, right?
So staying up to date on certainthings might even fall into the
cogs category anyway.
But overhead expenses, pointbeing, some of them are
necessary, some of them it'sokay to have them.
(13:19):
I'm not saying having overheadexpenses, you need to go cut
them all.
You're gonna need or want someof them, they're important.
You may want an office buildingso that you can have in-person
therapy because you think that'simportant.
Like I value that, that's one ofour core values, so it's
important to us and it's worththe money that it's costing us
in order to do so.
(13:40):
They're also kind of going backto that justification piece of
we can easily justify things asbeing investments.
This is where I really try todraw that line, like I said,
because that is one where I'vehad pushback.
Well, you know, an office is aninvestment because you know,
some people will only see atherapist if they can see them
in person.
And so, you know, by having anoffice, we're opening ourselves
(14:03):
to more business and moreclients.
And that might be true, butagain, that data point is hard
to quantify.
So that's why we look at it asan overhead.
It's okay if you want to keepit, it's okay if you consider it
a necessary expense.
We just want to look at thesethings.
So, some of these, like I said,may provide that ROI.
You may have an administrativeassistant who maybe provides an
ROI that you just can't quitepinpoint.
(14:25):
Um, that's okay.
Doesn't mean you have to go firethem.
It could be an opportunity ifyou're trying to cut expenses.
If you're in the red, you'reunderwater.
Maybe that is something to lookat.
But again, really pinpointingthese things and just becoming
aware, I think, is the key here.
We're not going about this withany judgment or any of that.
It's just I want to be aware ofwhere's my money going.
(14:47):
And that doesn't mean I have tochange it, doesn't mean that
there's anything wrong.
Maybe you are in a financiallyhealthy place and you're just
trying to figure out where's mymoney going, and that's okay.
So finding these threecategories, and then I'm gonna
give you a fourth bonuscategory, which is what we call
fluff.
This is expenses that are juststill floating around.
If you have anything that youare didn't felt feel like
fitting cogs investments oroverhead, that's called fluff.
(15:10):
And let's just make things easyon us and go ahead and just cut
those because they're not like Isaid, overhead is something that
may cost you money, but itbenefits the business.
Investments are things that aregenerating an ROI.
Fluff is neither of thosethings.
This might be if you'regrabbing, and this I guess
(15:30):
wouldn't even be really abusiness expense, but if you're
grabbing uh drive-thru food onthe way to meeting a client,
right?
You see, that's fluff.
Those are things that are notbenefiting anything or anybody,
and honestly, it's not evenreally a write-offable expense.
So getting rid of those fluffpieces, any expenses that are
just extra, you don't need them,that is the best place to start.
Let's wipe out that fluff.
(15:52):
We love working on this stuff.
So if you need help, as always,in the show notes is a link to
schedule a free consultationwith our coaches.
They can help you figure out howwe can optimize our finances,
how can we look for thoseinvestments?
And if you've been looking tomake an investment in yourself
and your business by finding acoach who can help you get
organized with your money, whocan help you create those
systems, who can help you growyour business, that's what we
(16:14):
do.
And like I said, we can generatean ROI for you.
We can put our expense into thatinvestment category to make sure
that you are making more moneyback than what you pay us.
And our coaches can show you howin that consultation.
Thank you so much for joining usagain.
I'm super grateful for all ofour listeners, everybody, all of
our practice owners out therewho are putting in the time and
(16:35):
energy.
It means a lot.
And not even just on a selfishside of you're that you're
listening to me ramble on for 15to 20 minutes a week.
It's that you're investing inyour business.
And this is a free, you'reinvesting time.
It's free to listen, but you'retaking time out of your day to
invest in your growth, to investin your business.
And I think that's somethingworth acknowledging.
(16:55):
So thank you for investing inyourself, caring about your
business enough to listen tothis and take action.
Thanks for joining us on theTherapy Business Podcast.
Be sure to subscribe, leave areview, and share it with a
practice owner that you mayknow.
If your practice needs helpgetting organized with its
finances, or just growing yourpractice, head to
(17:16):
therapybusinesspod.com to learnhow we can help.
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