An article on the business insider website revealed the unique story of Anna Newell Jones, who managed to pay off a significant amount of personal debt with a modification of her personal spending habits.
Here’s a summary of the changes she made to her personal spending habits.
These changes allowed her to pay off more than $20,000 in debt over a period of 15 months. In her own words, it allowed her to ‘live awesomely with less’.
- Identifying wants versus needs.
- Analyze total outstanding debt
- Establish a ‘financial independence goal’ – set a target date for when you want to pay off your debt
- Eliminate unnecessary things
The way she describes it (How To Do A Spending Fast ® and Get Out of Debt Quick) sounds a lot like extreme dieting for someone who’s trying to lose weight.
She hit the ‘financial reset button’ and she admitted that it was fairly uncomfortable.
In fact, Jones has outlined a very specific 15 step process on her website to help you pay off your bills and become debt free.
There are a lot of lessons in here for your private practice, the biggest one being the reduction of unnecessary expenses.
But there is a better way to reduce debt in your practice.
In business, you have not one, but two ways to pay off your debt.
- Decrease (unnecessary) expenses
- Increase income (raise prices, negotiate higher prices, introduce new products and services)
There’s another aspect to this story.
While you can decrease unnecessary expenses in your physical therapy business, what you don’t want to do, under any circumstances, is to decrease your marketing expenses.
If anything, you need to become a lot more strategic with your marketing, so you get ‘more bang for your buck’ and re-allocate your expenses if you need to, but don’t cut your marketing budget.
It’s like taking the foot off the gas, and causing your practice to slow down.
This is the mistake I don’t want you to make after you read this article – spend the same amount (or more) on marketing, but cut your expenses elsewhere (explore a more cost-effective EMR and physical therapy billing software, consider making some staff positions part-time in those areas that are overstaffed, reduce general office expenses etc.).
Find ways to increase revenue per patient, and maintain or increase your marketing budget so you can continue to grow and increase profitability. You must continue to market to your current and former patients. It’s one of the easiest, fastest, and most cost effective ways of realizing a substantial ROI for every dollar than you spend.
The clinic that markets correctly can outspend competitors and acquire MORE new patients in any economy.
This allows a practice to spend more money to market, get more patients, increase income and pay down debt faster relative to the competition.
It’s counter-intuitive to what we are conditioned to believe, as business owners. Marketing is the lifeline that can make or break any business, and cutting down marketing is the first thing business owners do in tough times.
It’s also the critical error, one that can drive the business into the ground.
The biggest mistake physical therapy business owners make is to cut back on marketing and referral generation activities.
It’s counter productive, and can result in less patients, less revenue and eventually stagnation.
The solution – Metric-driven marketing
All these problems can be solved with a plan that involves metric-driven marketing where the return on investment (ROI) is tracked carefully.
Good marketing is fun, effective and profitable.
Here is a simple 3-step plan to reduce debt in your practice:
- Identify your total business debt
- Setting a hard deadline (goal date) by which you want to pay it off
- Determining the monthly payment you need to make to reach your goal
A gift for you – A special, downloadable worksheet to help you reach your debt reduction goal.
I hope you use this worksheet. It’s going to give you at least one A-HA moment, and will help reduce debt in your practice.
Money management is not always a comfortable subject, but it’s something that we, as private practice owners, need to address. After all, it doesn’t matter how much you make, it matters how much you keep.
This worksheet has the potential to put you on the path to financial freedom, especially if you are struggling with debt in your practice. I suggest you download it, print it, fill it out and put it in a place where you can see it every single day. All the best, and if you need more help with your practice, schedule a call with a member of my team at www.strategycall.com