Most business owners know how much money they make, but they don’t know where it all comes from, leaving them scattered and offering products and services that aren’t worth their time or energy. Let’s review a way we can understand your income so you can earn more money.

Categorizing your income is an essential tool to understand what’s going on in your business.

If you earn $5,000 this month, that number doesn’t really mean anything. It comes from many services (new patients, returning patients, labs, webinars, supplement sales, etc.), and it’s hard to know how much progress your business is making by just looking at the $5,000 on its own.

Here are the most common ways to break out income; if you come up with a new one, please email me to let me know!

Example 1: New vs. Returning Clients

I have a new graduate client who breaks out new patients vs. returning patients to see how they are trending. This client knows that it’s less effort to keep clients you already have, but it’s more profitable to have a higher ratio of new clients. By looking at these numbers, they can see whether they should focus their energy on improving client retention or finding new clients. They also choose to track the number of patients seen per week, which helps them see trends in the year and plan for slower months.

Example 2: Location vs Location

Another client works at three locations and wants to reduce to two locations eventually. They look at total sales by the clinic to see which is the most profitable per day. If they don’t know which clinic has the best cash flow per day, they may take an offer to work more days at a slower clinic and earn less income.

Money is not everything, so don’t forget to consider cultural fit and where you want to build your practice long-term when making this decision!

Example: Jan Feb Mar Apr

Clinic 1 (2 days/week) 2,000 1,900 2,200 2,250

Clinic 2 (2 days/week) 1,500 1,400 1,500 1,450

Clinic 3 (1 day/week) 1,000 950 1,100 1,100

Since they were tracking, they could clearly see how much they make per clinic. Their sales for each clinic per day in April is:

Clinic 1 = 2,250/2 = 1,125

Clinic 2 = 1,450/2 = 725

Clinic 3 = 1,100/1 = 1,100

From a purely financial standpoint, they could leave Clinic #2 in favour of Clinic #1 or #3, where one day per week turns into $1,100 in sales within one month!

They can also see that Clinic #1 and #3 practices are growing, where Clinic #2 is the same income month over month. Assuming they have been working at all three clinics for the same amount of time, there is more potential to build a thriving practice with Clinics #1 and #3 since the patient base is still growing.

If you are new to a clinic, you want to look for GROWTH. I recommend tracking sales and the number of patients to get an accurate picture of how your practice is growing.

If Clinic #2 was a practice you just started at in January and your sales are stagnant, but you are increasing the number of patients you see, this may be because you have more returning patients (which is a lower dollar value sale than a new patient).

These factors can impact your decision of which clinic is the best fit for you.

Example 3: By service

Especially if you are building a new practice (which can happen any time, not just at the beginning of your career!), you may want to monitor how many sales you are getting from each of your services. This also makes it easier to track how many patients you see for each service since the price is the same per patient.

By knowing the number of patients from each service, you can identify whether there is a lack of interest in a service or a considerable interest. This information will help drive your business decisions like hiring additional employees or allocating more of your hours to specific services.

Common breakouts include:

New patient
Retaining patient
Labs
Supplements
Acupuncture
60 min, 45 min, 30 min treatment time
Referral
Virtual vs. in person
Long-term contract vs. 1-time visit

This also allows you to see how many of your new patients are returning, so you know your patient retention rate!

Example 4: Special breakouts

Examples include a special line for FullScript commission, breaking out workshop income to see how different topics do in other months, tracking virtual appointments vs. in-person to know how you are trending.

Or….Any combination of the above!

That’s right; you can take any of the ideas above and customize how you track your income for what is right FOR YOU.

There is no one-size-fits-all way to track your income since everyone has a different value on these possible metrics.

How did you end up breaking out your income? Email me to let me know!

RESOURCES:

Thinking about making a change with your practice? Most health professionals have financial goals, but without a budget, they are earning money and spending it without a plan and end up wondering where all the money they worked so hard to earn went.How can you expect to hit your financial goals, or stay accountable to them, if you aren’t doing proper planning on how to get there.

Financial empowerment shouldn’t be reserved for accountants!

Business Foundations: Budgeting covers everything you need to know about building a budget as a health professional so you can fully understand how you earn and spend money!