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FAQ's

The simple answer is yes. It’s important to understand how complex solving for profit is vs. solving for revenue. For a typical healthcare practice, the profit ‘fix-it’ phase often lasts 12 months. In this phase, practice ownership will adopt lean principles, align with high value services and shed itself of non-essential expenses. The 12 months following the ‘fix-it’ phase is often called a ‘maintainable profit phase.’ In this phase, the practice owner will often experience daily profit growth in the range of $250-$400/day or $65,000-$105,000/year (based on 260 working days/year). Outlined below are the two wealth creation phases for a practice owner:

  • Operations: Number of years an owner continues to operate in the ‘maintainable profit phase’ (i.e. 10 yrs.) x average profit increase (i.e. $75,000/yr) = $750,000 additional profit above and beyond the profit from the ‘fix-it’ year.
  • Sale of the business: A complex formula with a multitude of variables, which gets crafted into a multiple based on maintainable earnings. However, the practice owner could easily earn an additional $500,000 on the sale of their business compared to the value of their business in the ‘fix it’ phase.
  • Total potential profit gain: $1,250,000

 

To look at it from another perspective, by not partnering with ELEVATE, are you ready to forgo this potential profit gain?

Revenue growth means very little if your profit isn’t healthy. We have watched practices add $500,000 in revenue with no additional dollars to the bottom line. It’s important to remember that great clinicians can grow revenue in their practices, but not all great clinicians can grow profit (this is the stuff they didn’t teach us in university!). In our experience, 90% of practices don’t face revenue challenges, they face profitability challenges. If your practice’s EBITDA is <10%, it’s essentially at a break even point. All that to say, our near-term focus always starts with sustainable profit growth.

Annual turnover trends in administrative positions are hovering just below 50%. It may feel like you’re paying for administrative training and development all year long. Before you make the decision to pay for ongoing training, it’s wise to explore opportunities to automate any/all transactional tasks. Lowering the cost of a transaction is imperative to the long term success of your practice.

Also, when you sell your business to a strategic buyer, chances are the buyer will have a team of centralized services (payroll, bookkeeping, HR, marketing, etc). We often suggest outsourcing functions wherever possible, rather than wasting money on training and development.

Yes, absolutely. The earlier you can start planning for your tomorrow, the faster you can achieve everything outlined in your business plan.

Yes, whether you want to sell your business, pass it onto family, or transfer day-to-day operations to someone else, we’ll help you assess your options and extract the most value. Retire knowing you’re set, or use the money to fund your next chapter.

No, absolutely not. We have no desire to make money on the sale of your business, nor would we ever limit your access to all potential strategic buyers in an open market.

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