Everything is Negotiable: 5 Tips to Successfully Negotiate Your First Job Contract as a Physiotherapist

With over 1,500 physiotherapist job vacancies across Canada, it’s likely you’ll receive multiple job offers when coming out of school. Although this is a blessing, it can also be a curse. Choosing the right job offer for you can feel overwhelming.

How do you empower yourself by increasing your knowledge and understanding of offers, compensation models, and potential risks and rewards? What questions do you need to ask and how do you speak to the value you bring to place yourself in a position to negotiate and successfully land the best job for you?

In this article, we share 5 tips to help you negotiate your first physiotherapist contract with confidence.

1. Know Your Value and See if It Aligns with the Owner’s

An employer will invest in you if you are willing to invest in them. Understanding what the owner/company values will allow you to speak to what you can offer them. Start with understanding their purpose and the impact they seek to achieve with both their clients and their business. Then, be prepared to speak to the value you bring to the table as a contributor in their practice. Alignment between their purpose and yours is necessary for both to be successful and provides a space for them to see you as the ideal candidate. This gives you negotiating power.

2. Understand the Contract Terms

Most employees and independent contractors don’t take the time to understand contract terms, and what they mean, before signing. Your contract is a binding agreement that governs the working relationship between you and your employer. This includes what happens when your employment ends, along with certain conditions which can outlive your employment. Elements of a contract, such as total compensation, non-compete, and termination clauses are negotiable, which can make a large difference both during your employment and when your contract ends.

3. Know the Compensation Model and Your Earning Potential

Compensation is not as simple as a number you earn each month/year. Understanding the different pay models physiotherapists are offered, along with what the total compensation components will be, can help you negotiate and choose right when weighing different offers. Ultimately, you want your job to meet your financial goals.

A common compensation model in private practice is known as a ‘fee split’. A 50% split may seem enticing, when compared to a 45% fee split. However, the are several factors which can lead to better financial and benefit outcomes, even with a lower split. Some of these factors may include the impact of an administration fee applied by the business, or additional perks such as bonuses, pension/RRSP contributions, health benefits, education allowances, and paid time off. Knowing how to calculate your total compensation, and match them to your financial goals, will put you in a stronger position to negotiate. Start with your ideal end state in mind. What, to you, is a target you would like to make at the end of a day? Work backwards from there to determine your take home earnings, and other added benefits.

It’s also important to ask your future employer what your total compensation growth looks like in the future, and what you need to do to achieve this.

4. Understand the Difference Between Independent Contractor and Employee

When considering your job offers, weighing the benefits and the risks of starting as an independent contractor (IC) versus an employee (EE) can be challenging to navigate. Working as an independent contractor may result in giving up value such as benefits, compensation, and access to growth and development opportunities. On the other hand, you may enjoy the benefits of working with multiple employers and realizing the tax advantages that come along with being an independent contractor. Either way, it’s important to understand the differences in these working relationships, and what your responsibilities are under both scenarios.

5. Assess the Total Rewards

Compensation is a component of total rewards. However, the value an employer can provide extends well beyond the financial earnings you take home. These can include health benefits, work-life benefits, performance recognition, professional development and resources, which can improve your efficiency and effectiveness overall. Determining what is important to you will help you consider the different offers and ask the right questions.

At the end of the day, knowledge is power. This is especially true when negotiating something as important as your job contract.

Need additional guidance? At ELEVATE, we will help you prepare, negotiate, and successfully land your top choice offer.  Schedule a free consultation with us to get started or learn more.  We typically work with new clinicians through 2 hours of coaching to help them secure their first job contract with confidence.

Practice Management Challenges in 2024: Caseload, Relationships and Time

Over the past year, Canada’s physical therapy, chiropractic and occupational therapy landscapes changed dramatically.

Practitioners rallied to address and conquer some of the top issues of the past, like the need for more self-care and patient access to modern care solutions.

In this article, we look to the year ahead and explore three significant practice management issues facing practitioners in 2024.

1. Caseload Management

It’s no secret that retaining your patients is good business, but why is this one of the most significant issues facing clinicians in 2024? According to a 2020 survey of  Chiropractor, PT, and OT clinicians, managers, directors, and owners, the three leading causes (outside of insurance concerns) of patient retention are time, cost, and practitioner expectations.

  • 53.3% of patients have time commitments and scheduling difficulties.
  • 40% of patients believe clinicians have unrealistic expectations for treatment.
  • 73.3% of patients don’t agree with the cost of treatment.

All three stem from one major problem: value. Time commitments would no longer be a problem if patients understood why their proposed care plan was necessary in the first place. Expectations would seem easy if the value to them were apparent. And cost wouldn’t concern patients who knew treatment was essential to living their best lives.

A major root cause of poor patient retention lies in low clinician self efficacy. Many new graduate practitioners suffer from low levels of confidence in their practice ability and hold beliefs that they lack the skills and abilities to effectively practice evidence-based care.

Treat every patient with sterling professionalism, continually underline the benefits of physical therapy, and praise people for their efforts along the way and you’ll keep the patients you have and fuel future visits from their friends and family. Success boils down to building a culture of value around your craft and never letting your enthusiasm waiver in exchange for impressive results.

Other steps you can take to improve the likelihood that patients will return the next time they need therapy include:

  • Set appropriate expectations around treatment outcomes and the patient’s role in their own recovery. Unrealistic expectations are a crucial driver of dissatisfaction; early, honest conversations can help prevent that.
  • Invest in a patient portal software, allowing your patients to register and schedule appointments online for convenience. Patients gravitate toward practices that offer convenience and that leverage technology.
  • Partner with a home exercise program provider so patients leave with a visual, printed home exercise program that illustrates what they need to do, when they need to do it, and how many reps they need to do. Printed HEPs eliminate confusion and improve compliance – ultimately improving outcomes and patient satisfaction.
  • Ensure a patient-to-provider ratio that allows for timely care. If patients cannot get scheduled promptly or as their doctor has recommended, they will move on to another practice, even if they had a positive experience with you in the past.

2. Relationship Management

Managing a healthcare practice is challenging, even for the most skilled entrepreneur. There are many moving parts in the allied healthcare industry. It’s nearly impossible to stay on top of everything simultaneously. However, with the proper time allotted to relationship building, and optimal marketing spend on your personal brand, practitioners can attain an average of 1-2 new patients/day across an entire year.

Building a solid patient base must begin and end with friend and family referrals; also called word of mouth referrals. These referrals should make up 60-70% of your overall caseload on any given day. Asking your current patients to refer you to other friends and provide a Google review are important to building your caseload.

Relationship management with physicians, case managers, employers and community members are where you should expect to cultivate the remaining 30% of your caseload. It’s critical to understand where a GP places value when they send a patient to you. And it’s imperative to understand the outcome a Worker’s Compensation/Employer wants at the end of a treatment plan. It’s a brave new world out there, meaning you might have to pick up the phone and call them.

  •  Being active, current, and relevant on your social media accounts will go a long way to gaining credibility as a clinician.

3. Time Management

Productivity metrics are important when measuring both an individual PT’s and the clinic’s success. But understand that they are precious tools for assessing your employees too. Schedule efficiency and no show/cancelation rates are two great time management metrics.

Use these metrics to identify the strengths and weaknesses of your staff. Ask questions about why specific PTs have better metrics, such as net promoter scores or Google reviews, to figure out how to build up the entire team. The best clinicians prepare their cares plans, are careful not to over treat, and have clearly laid out care expectations with each client. They’re mindful of the 3T’s:

  • Tip: Educate (i.e. reinforce a directional movement that reduces pain_
  • Technique: Manipulation or IMS
  • Take-away: Exercise progression to do at home

Individual metrics for each physical therapist can also provide valuable insight. One therapist with significantly higher volumes or another with significantly lower volumes might trigger additional research and learning. Consider investigating how clinicians manage their drop-off list/recall lists/inactivity lists or what % of a clinician’s EHB case load has clients with three visits of less.

Need additional help? At ELEVATE, we work directly with clinicians seeking how to improve their caseload management, gain more referrals from GP’s and B2B sources, and manage their time so charts are being completed outside of work hours. In 2023, our average time spent providing 1:1 coaching for clinicians was 3 hours over a 6 week period. To learn more or get started, book a free consultation today.

What to Include in Your Healthcare Practice’s Functional Strategic Plan

Strategic planning creates value for every business – small, medium, or large. Essentially, it’s a process to figure out where your practice is going and the best route to get there. A strategic plan defines who you are as a practice and outlines concrete actions to achieve your goals.

Despite their importance, many healthcare practices find it hard to create a strategic plan for their business. They’re either too busy wrapped up in the day-to-day operations or are intimidated by the work required to establish a good plan.

In this article, we define what a strategic plan is, why strategic planning matters, and three themes all healthcare practices should include in their plan.

What is a Strategic Plan?

A strategic plan describes the company’s current state, desired future state and how to go from one to the other.

The components of a strategic plan usually include:

  • An executive summary.
  • A company description.
  • Mission, vision, and purpose statements.
  • SWOT analysis (“SWOT” is an acronym for strengths + weaknesses = internal; opportunities + threats = external).
  • A description of your business goals and an outline of how to achieve them.
  • A 6–12-month action plan that highlights specific initiatives, who will carry them out, a timeline for doing so and key performance indicators (KPIs) to track progress.

If reading the above components makes your head hurt, you are not alone. Most owners dread the cost, time commitment and complexity of the ‘to do’ list, especially if they lack resources. Yet, implementing a strategy needs to be concise, flexible, timely and functional. 

“Strategic Planning is not a lengthy action plan. It’s the evolution of a central theme through continually changing circumstances.”—Jack Walsh

What to Include in Your Practice’s Strategic Plan

Below are three central themes all practices should have as part of their 2024 functional strategic plans.

  1. Reduce risk to fixed costs.  Said another way—how can you lower the cost of every transaction in your practice? Here are some ideas:
    • Create a new labor model that allows your practice’s Gross Margin to be >45%.
    • Create a new service delivery model that allows your practice’s Gross Margin to be >45%.
    • Reduce bad debt.
    • Validate pay sheets and billing daily.
  2. Increase your pricing to preserve margin.  Pretty straight forward.
    • The second part to this theme is shift your revenue mix (% of total revenue by service stream—EHB, Auto, WCB, Disability, etc.) to the highest gross margin$ service stream. In most provinces, EHB and Auto have the highest fee for service rates and as such should make up >80% of your overall revenue.
  3. Liberate working capital via A/R, A/P, inventory, and cash.  Ways to achieve this include:
    • Optimize accounts receivable through timely invoicing.
    • Delay accounts payable by extending payment terms.

I have yet to work with a practice owner that has told me their net income is too high (>25%).  Most practice owners have a normalized net income of <10% and would benefit immensely from integrating the above three themes into their 2024 plans.

Owners should also continue to pay attention to retaining team members and always be on the look-out for new ways to grow sales. These two components are important, but the perfect pairing for the above three themes would be enhancing the performance and productivity of your team members.

Said another way…build a high performing operating model with 4 main imperatives and overlay them on the three central strategic plan themes:

  1. Formulate a team based operating model.
  2. Upgrade both your clinical and administrative talent. Make bold moves to ensure the future viability of your practice.
  3. Prioritize around your clients and the experience your brand creates for them.
  4. Instill a culture of accountability and ownership across your entire team. Find team members that crave feedback and want to be high performers.

At ELEVATE, we exist to enable practice owners to create greater profitability in their businesses, which in turn creates greater agency for owners over their wealth creation. We’re always happy to jump on a 30-minute call to explore how we can help create value for your 2024 functional strategic plan.

Do You Have Enough Cash in Your Healthcare Practice to Grow?

Owners of healthcare practices often wrestle with a difficult question: “Is there sufficient cash in my practice to capitalize on my next growth event?”

It’s important for business owners to strike a balance between taking profits and leaving enough capital within the business to ensure its stability, growth, and resilience in the face of challenges. But this balance can be difficult to determine.

Although we always recommend you consult with your accountant, lawyer, and other advisors to create a solid financial plan about working capital/cash flow management, this article offers some initial information that will help you get started.

Definitions

Before we get to the heart of the matter, let’s go over a few concepts that are helpful to understand.

  • Balance Sheet: a financial statement that breaks down a company’s assets, liabilities, and shareholder equity at a single point in time. It can be used to evaluate a practice’s working capital and the amount of its capitalization that’s debt versus equity.
  • Working Capital: this is the difference between current assets and current liabilities. Current assets are your highest liquidity assets and typically include cash, accounts receivable, and inventory. Curent liabilities typically include accounts payable, pay roll, and accrued expenses.
  • Working Capital Ratio: shows how much working capital is available for every dollar of current liability.  A strong ratio would be in the 1.7-2.0 range.
  • Cash Flow Statement: measures how much money the practice generates or consumes in a given period. It provides information about a practice’s ability or inability to generate profit.
  • Profit and Loss Statement: summarizes the sales (revenue), cost of goods sold (labor) and expenses related to operating a practice during a specific period in time (monthly, quarterly, or annually.)

Why Does Capital Matter?

  • Effective working capital management is crucial for the financial health and success of a healthcare practice.
  • Withdrawing excessive cash from your business as a shareholder can have significant disadvantages. (Keep in mind that the specific implications will depend on your business structure, financial situation, and the prevailing laws and regulations in your jurisdiction.)

Here are 6 ways withdrawing too much cash can put your business at a disadvantage:

  1. Impact on Business Valuation: If you’re considering selling your practice in the future, potential buyers will assess its financial health, including cash reserves. Pulling out excess cash can lower your business’s perceived value and make it less attractive to potential buyers. Strong financial performance is one of the most critical factors that potential buyers consider when valuing a business. Clinic owners should focus on the diversifyingrevenue, achieving steady growth, improving profitability through efficient and streamlined operations, creating a steady and stable workforce, and demonstrating a commitment to quality care and patient outcomes. These can be achieved through investment strategies such as expanding services, increasing patient volume, optimizing pricing, controlling overhead costs, and having a steady brand image in the community.
  2. Reduced Reinvestment: Withdrawing cash reduces the amount of capital available for the business. Retaining capital within the business can contribute to stability, growth, and resilience over time. Investing back into the business can lead to greater profits in the future by being able to seize timely opportunities, hire top talent, purchase assets at a discount, adapt quickly to changing market dynamics, and remain resilient despite economic downturns or unexpected events.
  3. Business Growth: Having ample capital can give the business a competitive edge. The cash that remains within the business can be reinvested to fuel growth, such as launching new products, expanding into new markets, increasing marketing efforts, hiring top talent, investing in new technology, improving products or services, acquiring a competitor, and staying competitive.
  4. Tax Implications: Depending on your jurisdiction and business structure, withdrawing cash could result in additional taxes. These withdrawals are ultimately taxed at higher personal income tax rates than corporate tax rates. It’s important to understand the tax implications of any cash withdrawal (income splitting, etc.)
  5. Working Capital Impact: Working capital is the amount of money available to cover day-to-day operational expenses. Regular cash withdrawals could potentially strain the business’s working capital, making it challenging to cover day-to-day operating expenses or unexpected financial needs. As a risk mitigation strategy, having a financial cushion to manage unexpected challenges such as economic recessions, supply chain disruptions, or emergencies can prevent the need for drastic cost-cutting measures or taking on high-interest debt during tough times, without interrupting your business operations.
  6. Liquidity Issues: If the business does not have sufficient cash reserves and substantial withdrawals have been made, the business could face liquidity problems. This might make it difficult to cover immediate financial obligations and reduce any borrowing capacity.

How to Improve Your Healthcare Practice’s Working Capital

If you’ve decided that you want to increase your working capital, there are many ways to go about doing so. Here are some examples of strategies that small businesses can implement to improve their working capital management:

  • Streamline Operations: Identify and eliminate inefficiencies in business operations to reduce costs and free up cash. This could involve automating certain processes or renegotiating contracts for better terms.
  • Control Costs: Implement cost-cutting measures to control expenses without compromising on the quality of products or services.
  • Forecast Cash Flow: Create accurate cash flow forecasts to anticipate future cash inflows and outflows. This helps in identifying periods of potential cash shortages or surpluses, allowing the business to plan accordingly.
  • Manage Inventory: Optimize inventory levels by implementing just-in-time (JIT) inventory practices. This reduces carrying costs and prevents overstocking or stockouts.
  • Manage Accounts Receivable: Set clear credit terms for customers and establish a systematic process for collecting payments. Consider offering discounts for early payments to encourage quicker settlement.
  • Manage Accounts Payable: Negotiate favorable payment terms with suppliers without damaging relationships. Take advantage of vendor discounts for early payment if feasible.
  • Supplier Relationships: Nurture positive relationships with suppliers to negotiate favorable terms, such as extended payment deadlines or discounts for bulk purchases.
  • Diversification: Consider diversifying your product or service offerings to reduce dependence on a single revenue stream, which can help stabilize cash flows.
  • Debt Management: If the business has existing debt, manage it effectively by making consistent payments and exploring opportunities to refinance at lower interest rates.
  • Strategic Pricing: Set prices strategically to ensure profitability while remaining competitive in the market.

At the end of the day, your job as a practice owner is to create transferable value.

If you want to create a business you can sell for the highest price, you should focus on creating business equity by building a practice that creates value beyond its balance sheet. In other words, building a practice that can be transferred to a new owner. 

If you can’t sell your company today with the confidence that a strategic/financial buyer can operate it as profitably as you, then you still have work to do in building the right kind of value and equity in your practice.

3 Mistakes to Avoid as You Plan, Start and Grow Your Private Healthcare Practice

Starting a private healthcare business is a giant leap for anyone to take.  It often requires leaving the familiarity and reassurance of a regular paycheque for a more uncertain financial future. 

The survival rate of business enterprises is not very favorable, with the latest trends showing 50% success rate at the five-year mark.  Understanding why private healthcare practices come up short in their life span can be a useful starting point for a future entrepreneur.

In this article, we unpack three common mistakes healthcare entrepreneurs make – and how to avoid them in your practice.

Mistake #1: Not spending enough time in the planning phase

Instead: Plan to win. Spend an inordinate amount of time, energy, and resources on this phase.

  • It’s critical for an owner to invest in their own management and leadership development. Spend time learning about the EQ themes of empathy and self awareness, as well as authenticity, leading the self, and leading others.  Clinic owners have often invested significantly in the development of their PT tool belt and must acknowledge that being a great clinician does not equate to business success.  An owner needs to create personal development leadership goals to balance out their tool belt.
  • Understand the ‘why’ you want to start your business. This will lead you to find greater clarity on purpose and impact.  Your business idea must have a competitive advantage/unique selling proposition and sufficient market demand.  Doing a SWOT analysis can clarify your business strategy.
  • Always start with the end in mind.  Understand your end game (e.g., who you want to sell to).  Work backwards from there.

Mistake #2: Starting a practice with incoherence between your competitive advantage, world class client experience, and ability to generate 20+ EBITDA.

Instead: Start to win. Clients don’t buy what you do, they buy why you do it, so don’t treat your team members like economic units. Instead, treat them like they’re your greatest asset.

  • To fully capitalize on the potential of team members as your greatest asset, you’ll need to invest in their training, development opportunities, compensation that reflects perceived value, and a positive work environment. By prioritizing your people, you can create a motivated and engaged workforce that’s committed to achieving your practice’s goals and driving success.
  • When it comes to customer interaction, team members are often the face of the company. Positive interactions with customers can lead to stronger relationships, customer loyalty, and increased sales.
  • A strong compnany culture that fosters team member engagement, satisfaction, and well-being can have a significant impact on productivity, team member retention, and attracting top talent.

Mistake #3: Growing your practice with an over-reliance on technology i.e. Practice Management Software (PMS). Technology has created an automation bias and automation complacency in owners.

Instead: Grow to win. Pair human judgemental capabilities with technology to guide decision making. This will avoid automation bias and complacency in owners.

  • End users of a practice management software (PMS) or practice/data management system tend to forget or ignore that information from the system depends on data entered by a human.  In other words, processes that appear to be fully automated are often reliant on human input at critical points and, as a result, require the same degree of monitoring and vigilance as manual processes.
  • Automation bias and complacency can lead to tactical decisions that are not based on a complete analysis of all available data, but that are strongly biased to the presumed accuracy of the technology.
  • As a practice owner, you need to understand how to manually check, at a high level, the accuracy of data from a PMS or EMR.
    • Example #1: monthly sales (revenue)
      • Sales data generated from the system for July 2023: $91,073Owner’s calculation:
        • July intakes 117 (3-month trend: April: 133 May: 122, June 120)Mix: Private/EHB: 60, Auto: 45, Worker’s: 12 = 117Revenue/intake: Private/EHB: $680, Auto: $1,140, Worker’s $880Revenue: $112,660 (manual) v. $91,073 (system); delta of $11,587 or 13%Opportunity: missed billings.

    • Example #2: monthly cost of sales (people power) for July sales: $91,073
      • Owner’s calculation:
        • Cost of sales data generated from the system for July: $60,108 (66%)
        • Forecasted July cost of sales %: 61% or $55,554; delta = $4,554 (8%)
        • 3-month trend: April: 60%, May: 61%, June 62%
        • Opportunity: overpaid a clinician.

ELEVATE Practice Intelligence (EPI) is a value growth advisory firm. We have domain knowledge and industry successes that we put to work for practice owners, from start-up, to organic and inorganic growth, to succession/exit planning.  We are a team of clinicians and business strategists who are passionate about creating a greater sense of agency over wealth creation for practice owners.  Grow your tomorrow with EPI.

Sell My Practice – How to Create an Exit Plan to Extract Maximum Value

Generally speaking, healthcare practice owners are woefully unprepared when it comes time to sell their business.

In fact, only 16% of owners who plan to sell their business in the next 12 months have a succession plan. And that number drops to 11% for owners who are 2-5 years out from a sale.

Despite this, 70% of small-medium business owners in Canada will sell their business within the next 10 years, which equates to 3 trillion dollars of assets exchanging hands over the next decade. That’s a lot of money on the table, making it important to start preparing today. The succession planning journey should commence well in advance of the sell/transition date. In my experience, the optimal planning time is 2-3 years out from the sale. This timeframe affords practice owners time to create a tactical business exit plan with manageable goals and timelines.

In my video, Grow My Healthcare Practice: Understanding the Rules of the End Game, I speak to the importance of always beginning with the end in mind. What matters to you today might not be the same things that matter to special interests buyers down the road, who are generally interested in EBITDA$, tangible assets, intangible assets, and goodwill. 

As a first step, it’s critical that a practice owner understands which elements of their business contribute to value and, equally important, which need to be cleaned up, eliminated or enhanced to maximize value.  

Practice owners must be able to validate value to the end buyer in order to command the highest price. Value is always future-looking and the buyer will require a tactical plan for how the existing maintainable earnings will hold/grow post sale (1-3 years). This usually comes in the shape of a proforma budget.

*Disclaimer: the information provided herein is intended for general informational purposes only.  The information should not be considered a substitute for professional legal or financial advice.  You should always consult with a qualified expert in these areas before making any decisions or taking any action.

There are many ways a business owner can maximize the value of their practice via the sale of shares. 

Here are three of those ways:

1- Create an exit strategy:

  • At a minimum, create accurate profit and loss statements on a quarterly, and annual basis. Same year quarter on quarter trends (e.g., Q1 2023 v. Q2 2023) are equally important as year on year quarterly trends (e.g., Q2 2022 v. Q2 2023). Accurate and timely data is essential to business navigation.
  • Remove all personal spending from your business account.
  • Remove all other expenses that do not enhance the client experience (Box 4 expenses). In other words, cut costs to grow stronger. Always look to automate tasks that are transactional in nature (no human contact required).
  • Create a forecasted annual plan for the next two years. Highlight opportunities for revenue growth, but more importantly, opportunities to further maximize net profit. 

2- Reduce reliance on the practice owner:

  • Train and empower key employees. Identify key team members who can assume critical roles and responsibilities in the absence of the practice owner. 
  • Document and systemize your practice—things like operational tasks, customer interactions, financial management and any other critical aspects.
  • Ensure all employee contracts are updated with non-compete and non-solicitation agreements. 
  • Outline components of a transition plan for the practice owner.  
  • Diversify your customer base where it makes sense. Always remember, there is such a thing as BAD revenue. Find new services that offer high net profit opportunities paired with a high volume reload (repository of clients). This could a B2B contract with an insurance company or hiring complimentary team members that are experts in areas like vocational rehab, disability case management, chronic disease management or health coaching.
  • Prepare a great story/pitch deck for the prospective buyer.     

3- Assemble a team of trusted advisors:

  • Seek professional tax advice. Selling a business involves complex tax considerations that can vary based on your specific circumstances, the type of business entity, and applicable tax laws. Engage the services of a qualified tax professional who specializes in business sales and can help you navigate the tax implications of the sale. They can provide personalized advice based on your situation and help identify additional tax-saving opportunities.
  • Remember that tax planning should be done well in advance of the sale to maximize the available strategies and minimize tax liabilities. Consulting with a tax professional early in the process is essential to ensure compliance with tax laws and optimize tax savings while selling your business.
  • Understand the opportunities/risks associated with the two most common business deals:
    • 100% share sale at date of close.
    • A fixed/contingent share sale where seller/buyer agree upon a % of sale price to be paid at the date of close (fixed) and the % left in the business as a growth incentive over a set time period (i.e., 2-3 years).
  • Get advice on how to navigate the Lifetime Capital Gains Allowance, which is $971,190.

Want more information on this topic? Stay tuned. I’ll be posting three new Sell My Practice videos to the ‘Watch’ section of my website in early Q3 2023. 

Grow Your Healthcare Practice by Cracking the SEO Code

An outdated SEO campaign could cost your practice 400K in annual revenue growth.

An interview with Cris Bandhan, Physical Therapist/PT Practice Owner/SEO Healthcare Expert

Gary: What problem do you solve for healthcare practice owners?
Cris: Only Google executives truly know how Google bot algorithms – now aided by Artificial Intelligence – piece together information online to output search rankings.   Rather than guess at the game, it’s better to focus your efforts on developing a deep understanding of the customer you’re targeting.  This helps you identify how to structure the site, content, expertise, meta data, etc.  It all ties together harmoniously to be effective.  At the end of the day, it’s an art to ensure all SEO strategies on Google, YouTube, Instagram, Facebook etc. tie together in a meaningful way.  One of the biggest mistakes a practice owner can make is consulting with an SEO company who is not familiar with Physical Therapy or private healthcare and generalizes the SEO services they provide.  Content that’s relevant to the services you provide, and a strategy that aligns to healthcare, makes a big impact.  Having someone in your corner who understands the healthcare side provides a competitive advantage. 

Gary: What are your top two tactics to improve a practice’s search engine ranking page?
Cris: The meta title and meta description in my opinion are crucial.  Their lengths, the words used, and how it all ties back to your target customer is important.  Although the meta description isn’t a ranking factor, it can impact click-through rates which can in turn help SEO. The second would be site content.  The depth, relevancy and quality are important to search engines as they also want to ensure they’re presenting the best of the best to a search customer.

Gary: What is the cost of not having a strong SEO campaign?
Cris: I firmly believe that a strong SEO campaign can add an additional 40-50 new patients/month to a practice.  When you calculate this in a generalized way, the revenue attached to 40 patients/month x 12 months x $750/patient = $360K.  SEO requirements can often change multiple times per year, so it’s a lot easier to review monthly and make quick necessary updates.  Additionally, info on your site may require changes, such as clinician or staff bios, specific services, and content.  Each of these moments require an SEO implementation, and when done regularly, can be done much faster, saving time and cost. 

Gary: What is the typical mistake practice owners make with their SEO campaign?
Cris: The revenue loss from low net new customers, when SEO is not maintained monthly, can have a lasting impact on the financial viability of your practice.  Your search ranking can drop from page 1 to page 3, your target customer can change and, as we know, Google can make algorithm changes 3-4 x/year.  This type of ‘SEO rollercoaster’ requires much more time on the SEO end to get your website back to a position that continues to drive substantial revenue.  An example of this was a practice I was managing that obtained 50+ intakes alone from their online organic search monthly.  They paused the SEO service, and after 3 months their search ranking dropped significantly, and those intakes disappeared.  Essentially, their competitor, who had a more robust search ranking, was more discoverable to those new customers looking for the service.  As a result, I was brought back in to re-deploy the SEO campaign and the outcome was a return to a top 3 search ranking for their particular service, and the new client flow returned.

Gary: Who is Your Ideal Client?
Cris: Our most common practice owner has typically been in business 3-5 years and their practice is stuck in terms of revenue growth. At this stage, they have what I call existing online equity.  Their site has been around for a while, it has been indexed and re-indexed by search engines.  They’ve also gained organic backlinks to their site from other reputable sites or directories across the internet.  These situations typically have some stagnation in search ranking as the site has not met updated SEO standards, reflects inaccurate information or has out of date content.  It’s quite impactful when some tweaks to the content, meta information and some back-end work move the site’s position on search for key service offerings.  We can see these changes as early as thirty days to three months.

Cris: We also work with new practice start ups, similar to the ones ELEVATE Practice Intelligence works with.  Working in parallel with the web designer is critical and communication is key for us.  We open the channels early to ensure we’re working together to get the best outcome from a website or digital solution.  We first work with the developer to implement tracking codes on the site.  This will allow key data points from site visitors and search ranking to be identified, helping us down the road as we continue to enhance the SEO.  Some of this data is shared regularly with our customers.  SEO recommendations can be implemented as early as the development stage of a website, or later down the road, by providing appropriate updates to be deployed after a thorough review of the website and its back-end structure.  This could be related to the content itself or even items that impact the load time of the site.  Once we are off the ground, we work with the developers at a regular cadence to ensure updates are made keeping the site’s SEO relevant.

Connect with Cris on LinkedIn at https://www.linkedin.com/in/criston-bandhan

Grow My Practice – 4 Tactics to Improve Clinician Productivity

As a busy healthcare practice owner, your time is valuable. You know it’s important to operate your practice efficiently, while also providing for the best client experience possible. 

That’s why optimizing clinician productivity can be an investment in your client’s health (greater access to care) and the financial success of your practice (greater EDITBA). In fact, a practice can gain a competitive advantage simply by closely managing their clinicians’ productivity.

Productivity metrics are measurements used by practice owners to evaluate the performance of clinicians. These metrics are used to highlight areas of opportunity for improvement to ensure optimal efficiency and productivity. 

Productivity metrics typically fall into one of two buckets: output value or input cost.

Output value is often measured as:

  • Revenue billed/hour: based on the revenue mix of the clinic (i.e., $176/hr)
  • Schedule efficiency: total available Ax/Rx slots in the schedule minus an 8% no show/cancellation rate (i.e., daily schedule efficiency target for a clinician could be 92%)

Input costs are often measured as:

  • Direct labour costs: clinician cost to deliver care
  • Indirect labour costs: administrative or other support staff costs
  • Gross margin: revenue minus labour (direct + indirect); a 55-58% gross margin range is healthy

In one of our previous blog posts, Why Your Healthcare Practice Should Use a Business Scorecard, we mentioned the importance of improving scheduling and productivity inefficiencies. Now, let’s go one step further and unpack the four best tactics to improve productivity from an output value perspective. In a future blog, we’ll dive into labour costs and models.

It won’t come as a surprise to many practice owners that tactic number one starts with human capital: our clinicians. At the end of the day, when you strip everything away, we’re all just people. People caring for people. So, how can we help our clinicians get better at this?

1- Help clinicians become more human (EQ eats IQ for breakfast)

    Creating positive change in the lives of your clients might be your greatest legacy as a clinician. Clients won’t remember what you did, but they’ll remember how you did it. A blend of caring plus competence is the fastest way to build trust. The most important therapist attributes required to create an engaged client outcome might surprise you. They are:

    • Empathy
    • Effective communication
    • Friendly and caring attitude
    • Professionalism
    • Knowledge
    • Skill

    Winning with EQ will have a downstream impact on many of your lead measure KPIs, such as lowering no show/cancellation rate, improving net promoter score, encouraging fewer private pay clients with three or less visits, and increasing friends and family referrals.

    2- Define your productivity KPI (Rx/day or revenue/day) and measure it in your practice scorecard

    Often, simpler is better. A good calculation option for clinician productivity = number of hours    worked/day x number of treatment slots/hour x 92% (8% no show/cancellation rate)

    • 7 hours/day x 3 Rx slots/hour x 0.92 = 19 Rx/day (Adjust accordingly for Ax slots)

    Practice owners should know their average revenue/Rx across their entire clinic.

    • For example: Average Rx revenue = $65 x 19Rx/day = $1,235/day or $176/hr

    3- Create schedule efficiency and discipline

    Our best advice to win on schedule efficiency/discipline is to start by reading: The 4 Disciplines of Execution (Mc Chesney, Covey). It’s likely that any practice with a schedule efficiency of less than 92% has succumbed to the so-called whirlwind of urgent activity required to operate the day-to-day. What gets lost is the time and energy required to execute on the tactics that allow you to keep your doors open in six months’ time. 

    Understanding the ‘what’ of execution must come before the ‘how’. There are a multitude of ways to win at schedule efficiency (one of which is outlined next). To be fair though, schedule efficiency/discipline is one of the hardest tactics to master, and in trying to do so, your eyes will certainly be opened to your practice/organizational ethos.

    4- Eliminate non-billable clinician hours in the schedule

    Business admin should control the clinical schedule—with no exceptions. As a result, it’s important to remove all the ‘white noise’ from the schedule. This includes anything like charting time, prep time, etc.

    As a practice owner, it’s imperative that you form a united front with your business administrator and communicate the ‘why’ to your clinical team. Remember, the why should resonate as a benefit to the clients your clinic serves. This could be greater access (or same day access) to care, a more comprehensive care plan, or even a financially viable clinic.

    As a practice owner, understanding and leveraging your competitive advantage is essential, especially when you compete in a commodity driven industry. Transforming human capital into a competitive advantage is what practice owners should turn if they’re unable to sustain a competitive advantage related to location, price, service, customer experience, or clinical expertise. 

    Practice ownership that emphasizes a dual focus on managing their people, in combination with developing their people, will uncover a long-term competitive advantage.

    Need Help Getting Started?

    If you’re running a busy healthcare practice, finding time to design and implement tactics to improve clinician productivity might feel overwhelming. But you don’t have to go it alone. And the work you put in now will pay off in the future.

    If you need help, our team at ELEVATE Practice Intelligence is ready to assist. Book a free consultation today to see how we can help you measure your performance and create a thriving business sooner.

    Growth for Growth’s Sake Could Cost Your Healthcare Practice

    In today’s economy, business growth is considered to be good

    Growth is the gold standard. It’s what most business owners say they’re shooting for. We often equate growth with more revenue and therefore more profit and more success.

    But is growth always what it’s chalked up to be?

    For many healthcare practice owners, they’ve grown their staff, grown their client base, and grown their service offerings. Yet, things still feel hard. 

    Maybe they’re constantly turning over patients. Maybe they’re spending many hours simply fighting to get paid. Or maybe they’re spending all of their time dealing with HR issues. Growth was meant to be exciting, so what happened?

    In this article, we look at why growth for growth’s sake can actually cost your healthcare practice, and what you can do to turn things around.

    The Growing Pains of Building a Practice

    Going from a single-person operation to a practice with staff changes the landscape. It doesn’t really matter what industry you’re in. Adding people, whether that’s a new clinician, assistant, or an office administrator, changes the way your day-to-day business operates.

    It’s not uncommon for us to see practices that hit this growth hurdle as they stretch from $250,000 to $500,000 in annual revenue. The topline of their financial statement keeps rising as they add staff and services, but the needle doesn’t move on the bottom line. 

    On paper, revenue growth looks good for your practice bank account, but at the end of the year, there still isn’t more for you to take home. You’re working harder than ever and have nothing to show for it. 

    It’s a story we hear often. So if you’re experiencing this, rest assured that you’re not alone.

    Where Does the Money Go?

    Scaling a business takes more than adding staff and expanding service offerings. In fact, each person or service you add can hurt your practice’s profitability if you don’t do it in a calculated and strategic way. 

    To effectively scale your practice’s business, you can’t simply focus on offering a broader and more dynamic client experience. It takes smarts and business savvy that many healthcare providers don’t consider when they start a practice.

    To figure out why your topline is rising but your bottom line profit is stagnating you have to take a careful look at the money. Specifically, how are you getting paid and how much is it costing you to provide services?

    How Do You Get Paid?

    Depending on the services your practice provides, you probably bill through a number of different channels. 

    These could be steams like:

    • Government
    • Worker’s Compensation
    • Disability
    • Auto
    • Private Pay 
    • Contingent

    Not all money is good money. If you’ve spent any time trying to get paid across these streams, you know there’s such a thing as “bad” revenue. 

    Whether there’s a particular insurance company that takes so long to pay that it hurts your cash flow, or there are standardized unit rates for a particular service that make it hardly worth the time to offer, if you look closely at your income sources, you know there are streams that are more and less valuable.

    Turning away business can be scary. When you were starting out, you were grateful for every patient and every phone call. But over time, some of your income streams have become more trouble than they’re worth. 

    What does this mean for your practice? You may never be able to turn away patients who want to pay through a particular stream, but you can stop courting them. Have a look at your advertising. What are the keywords on your website? Will clients looking for a physiotherapist after a workplace accident feel like your clinic will meet their needs? Or are you presenting yourself as the place to go for a local homeowner who hurt his back shoveling his own driveway?

    By positioning yourself as accepting yourself as a clinic for clients paying through a particular revenue stream, you’ll see more of those walk through your door, and fewer of the ones that will take weeks or months to collect on. Your cash flow will be stronger. 

    But this only solves part of the problem.

    What Are Your Cost of Services?

    When you started growing your clinic, how did you go about doing it? Did you add another provider who offered the same services you do so you could see twice as many patients? Or maybe you added a second service offering so you could offer broader care to your existing patients?

    Maybe you heard from clients that they were looking for a registered massage therapist, and it seemed like a good fit to add one to your chiropractic clinic. Or you had available treatment space and met a new osteopath in town who offered to help you cover the rent.

    Services get added to clinics for lots of reasons, but unfortunately scalability doesn’t always enter the conversation until after the fact. More services means more patients through the front door, and that can only be a good thing, right?

    If you’re struggling with growing revenue and a stagnant bottom line, you’ve learned the hard lesson that more isn’t always more. Not in the ways that matter anyway. In order to make it pay off, you need to make sure that introducing new services and service providers is done efficiently. 

    Finding efficiencies is a 360° undertaking. If you’re adding new services without reducing the overall cost of providing those services, you’ll never see it reflected in your bottom line. 

    Here are a few things to consider:

    • Standardize the cost of providing care. You need to be able to compare, so you need to know the cost per patient. 
    • Understand your labour costs. Are your staff paid based on fee for service or hourly? How are contractors compensated? Find a solution that has the greatest potential for increasing the profitability of your practice.
    • How is your schedule managed? Are treatment rooms left empty? Is there down time as equipment is changed over from one appointment to the next? Do particular types of appointments only get made on evenings or weekends, and do you have the staff to meet those demands?
    • What are your biggest cash flow problems? We talked a bit about this above, but also consider how you handle your accounts payable. If you can’t boost how quickly you get paid, are there ways to cut back expenses or go with suppliers with longer payment terms?
    • Do you have solid and documented operating and training procedures? Service providers run on human assets. It’s natural that everyone wants to provide services in a way that works for them, but over time, individual efficiency can suffer, and procedures get lost in translation.

    Once you have a better understanding of your cost of services, you can find the pain points that are hurting the profitability, and the practice areas that will grow both your top and bottom lines.

    Where to Start?

    Understanding what needs to be done and actually doing it are very different things. Auditing your cash flow when you already spend too much time just trying to get paid can feel like a losing endeavour. Having conversations with staff about improving service efficiency can be painful.

    If you’re struggling with rising revenue and declining profits, it may be time to ask for help. 
    At ELEVATE Practice Intelligence, we use proven techniques to find inefficiencies and identify the elements of your practice that will take your growth and profitability to the next level.

    Book a free consultation today to learn more.

    Three Overlooked Strategies to Ensure Your Healthcare Practice’s EBITDA is Calculated at the Highest Value

    If you’re a healthcare practice owner, chances are you’ve put years of effort into growing your practice, finding new patients, training and keeping staff. So, when it comes time to calculate the value of your business, you want those efforts to be reflected in your business’s valuation.

    But business value is about more than just topline revenue and expenses. 

    Enter: EBITDA

    EBITDA stands for “earnings before interest, taxes, depreciation and amortization”, and many potential investors or acquirers will look at your practice’s EBITDA to get a clearer picture of your business’s worth. When we’re talking valuation multiples, we’re often looking at it in relation to EBITDA.

    Unlike revenue and expenses though, EBITDA isn’t a fixed number. There can be some nuance in how it’s calculated, and if you’re not looking for those gray areas, you can be leaving cash on the table when it comes to valuations. 

    In this article, we discuss what EBITDA is, how it’s calculated, and how you can leverage it to maximize your business value.

    What is EBITDA and How is it Calculated?

    EBITDA is a way of measuring a business’s cash flow, profitability, and its ability to add new debt, while also adjusting for factors that are beyond the business’s control. This includes taxes and interest that are set by outside organizations, as well as depreciation and amortization, which are inevitable with capital expenditures.

    EBITDA allows investors and financial institutions to value businesses across jurisdictions and compare the results.

    To calculate EBITDA, the following formula is used:

    Net Income + Interest Expense + Taxes + Depreciation and Amortization

    By adding interest expenses, taxes and depreciation and amortization amounts back into your income, you’ll actually see your total go up. This means if investors or buyers are looking to value your company as a multiple of EBITDA, the offer will be higher than if they’d used income or revenue alone.

    What EBITDA Isn’t

    While EBITDA can be a useful tool to project future financial performance, it isn’t always something you see on a balance sheet and often gets confused for other financial metrics. 

    Here’s what EBITDA isn’t and how these metrics are different:

    Gross Profit

    Gross profit is your revenue less the cost of providing services. It’s a bottom line number which can help you track performance, but unlike EBITDA doesn’t look at operational efficiency or normalize performance over different jurisdictions.

    Net Income

    Net income takes total revenue and removes all expenses, taxes, and interest paid. In terms of calculating your practice’s available cash, it’s a useful number. But EBITDA doesn’t consider taxes and interest, which gives investors a better picture of your practice’s potential earning power.

    Operating Cash Flow

    Operating cash flow is an officially defined term under Generally Accepted Accounting Principles and is similar to Net Income in that it considers taxes and interest paid, but also includes depreciation and amortization. This gives a clear picture of cash at hand.

    By adding back in those taxes and interest paid as well as depreciation and amortization amounts, EBITDA provides a more normalized number for investors to review.

    How to Use EBITDA to Increase Practice Value

    While the basic EBITDA equation looks pretty straightforward in terms of how EBITDA is calculated, there is room to tweak it in your favour. 

    Here are three different ways you can adjust your EBITDA to calculate your practice’s highest value.

    1. Stop Treating Your Business Like a Hobby

    As the saying goes: Treat your business like a business and it will pay you like a business. Treat your business like a hobby and it will cost you like a hobby.

    Treating your business like a business means getting your financial ducks in a row. This can look like investing in more sophisticated accounting software, or choosing a new accountant or business consultant who can help you quantify things like depreciation and amortization for capital assets. 

    Treating your business like a business also means not writing off quasi-personal expenses just to lower your tax liability. This is a rookie mistake many owners make, and it’s important to stop doing this for several reasons:

    • First, accurate accounting is essential for sound decision making in your practice, and rules are rules – meaning the CRA may audit you. 
    • Second, it’s difficult to have a clear picture of profit when it’s clouded with personal expenses.
    • Finally, doing so could harm your valuation if you decide to sell. Cash flow is highly important in a business valuation and running personal expenses through your business moves the needle the wrong way.  

    2. Exclude Extraordinary Costs

    Investors, buyers, and financial institutions will use EBITDA to get a sense of how your practice will perform in the future. So while you want your numbers to accurately reflect your operations, it’s also important to look at the big picture and take out expenses and items that the practice is unlikely to incur in the immediate future.

    Costs like renovations, severance pay, or asset purchases can be removed from your EBITDA since they’re typically one-time non-recurring expenses. You’ll probably want to make a note of them so it doesn’t look like there are discrepancies between your balance sheet and your EBITDA value, but most investors won’t balk at excluding them if it means giving a clearer picture of future earning potential.

    3. Make Note of Operational Changes

    EBITDA is often calculated using several years of data to give a clear picture of your financial performance. But as discussed above, the true value of EBITDA is in determining where your practice is headed, not where it’s been.

    If you’ve made a significant change in your operations in the last year or two, you may want to calculate EBITDA to reflect these changes so investors can better understand potential future cash flow. 

    For instance, maybe you’ve recently changed your pricing, reduced your labour costs, or improved overall efficiencies through revised patient care procedures. If this is the case, you’ll want to adjust your EBITDA so it more accurately predicts what your practice will look like into the future. 

    Confidently Calculate Your Practice’s EBITDA

    As discussed, EBITDA can be a bit of a nebulous concept. There’s room for adjustments for things like one-time costs and recent changes to your operations. But if you get too aggressive in boosting your EBITDA number, it can start to look like you’re trying to inflate your business value beyond what it’s really worth.

    Investors or acquirers are going to look at your healthcare practice from every angle. They’ll scour your books and ask questions so they truly understand your business’ potential cash flow and earnings. 

    That’s why it’s important to keep detailed records and review your financial situation in detail. Ideally, you’ll want to go into any negotiation knowing your financial records are bulletproof and your EBITDA is fully defensible. The last thing you want is unpleasant surprises when questions get asked.


    Need help calculating your EBITDA, so you don’t leave money on the table? Book a free consultation with our experts at ELEVATE Practice Intelligence today.