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5 Ways To Get Paid As A Clinic Owner (Most Only Have 1 of These) · Build Your PT Clinic with Bryan Wright, DPT

• 0:00
  SPEAKER_00: Can you make good money when you're owning a physical therapy clinic?
• 0:03
  SPEAKER_00: Yes.
• 0:04
  SPEAKER_00: More than most physical therapists think.
• 0:06
  SPEAKER_00: But here's the thing, I watch the other thing happen almost constantly.
• 0:10
  SPEAKER_00: Because an owner will look at the number on their own pay stub and they'll compare it to what a staff PT down the road takes home.
• 0:17
  SPEAKER_00: And they're just deciding that the risk is not even worth it anymore.
• 0:20
  SPEAKER_00: So that business owner that I'm talking about, reading one number out of several, they are a practice that's run right, but they're not paying in the right way because they don't understand the other buckets.
• 0:29
  SPEAKER_00: We're going to talk about that today.
• 0:30
  SPEAKER_00: What is it that most owners are only collecting on?
• 0:33
  SPEAKER_00: That one salary that they're looking at?
• 0:36
  SPEAKER_00: Well, that salary is what keeps somebody myopic enough that they lose the whole picture.
• 0:39
  SPEAKER_00: So let's go through what an owner should actually get paid, in what order, and which one has to be working before any of the others are showing up in their income.
• 0:47
  SPEAKER_00: Before we go too far, I want to tell you where I'm coming from on this.
• 0:50
  SPEAKER_00: I started with one clinic and built my company into a$50 million plus enterprise, and it's growing with 21 locations across Idaho and northern Utah.
• 0:59
  SPEAKER_00: And I want to tell you something that sounds like it might be a mistake, but it's not.
• 1:03
  SPEAKER_00: Inside my company, I'm on payroll like everybody else that I employ.
• 1:06
  SPEAKER_00: My salary happens to be the lowest of any physical therapist in the building.
• 1:10
  SPEAKER_00: It might sound like an accident, but it's actually on purpose.
• 1:13
  SPEAKER_00: Now stay with me on this because by the end of the video, you'll know a little bit better why I set it up that way.
• 1:19
  SPEAKER_00: So start with why ownership feels like a bad trade early on.
• 1:22
  SPEAKER_00: You're putting in a lot of work, a lot of hours, all the risk, and you end up with a salary that may or may not be better than what you expected.
• 1:30
  SPEAKER_00: The basic sequence is you open up the clinic, you're signing the lease, you carry the whole risk, you cover the payroll, and a full caseload.
• 1:37
  SPEAKER_00: And then at nighttime, you might even just go look at the books and you're doing all this work, paying yourself, and sometimes it's less than you made working for somebody else.
• 1:45
  SPEAKER_00: So people give up.
• 1:46
  SPEAKER_00: Some owners read that as a conclusion that owning is actually a bad idea when it's really a description of a stage or an era inside of building a good business.
• 1:55
  SPEAKER_00: You get through that stage, there's some good stuff happening.
• 1:58
  SPEAKER_00: So in that first stretch, you're buying something with your own labor.
• 2:01
  SPEAKER_00: And every hour you don't get paid for is going into an asset that did not exist before you actually signed those agreements, the leases, all the things that are now on your risk.
• 2:10
  SPEAKER_00: But you don't know how long that stage is going to last.
• 2:13
  SPEAKER_00: So many owners quit right before it turns out good.
• 2:16
  SPEAKER_00: And or they might even sit in that, stewing it for a decade or two, wondering, like, how do I get past these areas?
• 2:21
  SPEAKER_00: They forgot to ask mentors that could help them get past their blind spot.
• 2:24
  SPEAKER_00: So I suggest stop asking what you're making this year and ask instead what the company is capable of paying you and whether it's on the path to do it.
• 2:31
  SPEAKER_00: Before we get into the ways you get paid, you need the right numbers actually in front of you because so many owners or aspiring owners have their eyes on the wrong numbers, and that's part of the issue.
• 2:40
  SPEAKER_00: Most owners are watching the revenue coming in, and revenue is not the most useful number that you could look at.
• 2:46
  SPEAKER_00: I say this all the time: cash flow is king.
• 2:48
  SPEAKER_00: The flow of income is what actually matters.
• 2:51
  SPEAKER_00: So what came in, what went out, and what's left over, and whether that's improving month over month.
• 2:56
  SPEAKER_00: Robert Kiyosaki, one of my favorite mentors, has a definition that makes this simple for me.
• 3:01
  SPEAKER_00: And I've used it for most of my business career.
• 3:03
  SPEAKER_00: An asset puts money into your pocket, and a liability is what takes money out of your pocket.
• 3:08
  SPEAKER_00: We want more assets, we want less liability.
• 3:11
  SPEAKER_00: We want to put things that put money into our pocket, into our portfolio, and take things out to take money out of our pocket.
• 3:17
  SPEAKER_00: So which one is your clinic this month?
• 3:18
  SPEAKER_00: Is it an asset or a liability?
• 3:20
  SPEAKER_00: And would somebody be willing to buy that company or that clinic someday?
• 3:23
  SPEAKER_00: These are questions that you can easily answer when you know what to look for.
• 3:27
  SPEAKER_00: A lot of owners or aspiring owners have never really asked it that plainly to themselves.
• 3:31
  SPEAKER_00: And it's the answer that tells you what stage you're actually sitting in.
• 3:35
  SPEAKER_00: So here's the part that I think we came for, and it's what I teach about the five main buckets of cash flow.
• 3:41
  SPEAKER_00: I believe there are five separate ways that the work that you do as a business owner can pay you.
• 3:46
  SPEAKER_00: And it's so valuable.
• 3:47
  SPEAKER_00: I'll name all five of them and give you them in order because the order is actually important.
• 3:52
  SPEAKER_00: And it's where, if you get it out of order, a lot of owners will wreck the cash flow that they could have had from these five buckets.
• 3:58
  SPEAKER_00: So, number one, it's your salary and benefits.
• 4:00
  SPEAKER_00: You should pay yourself salary and benefits right out the gate as an owner.
• 4:03
  SPEAKER_00: And what you pay yourself for the job you do inside of the business is that salary.
• 4:06
  SPEAKER_00: I pay myself a salary in my company before anything else.
• 4:09
  SPEAKER_00: Number two is profit share.
• 4:10
  SPEAKER_00: And this one may or may not be applicable to you as a business owner, but it's important for you to understand that profit share is an income bucket, especially if you're going to employ people in the administrative realm that actually will get profit share for the work that they do.
• 4:23
  SPEAKER_00: Now, I don't pay myself profit share, but this is a bucket of cash flow.
• 4:27
  SPEAKER_00: Again, there's a reason I don't pay myself profit share.
• 4:29
  SPEAKER_00: And the main one is because of number three.
• 4:31
  SPEAKER_00: Number three is distributions.
• 4:32
  SPEAKER_00: It's what the ownership that you own in the company pays you out on top of the salary that you have.
• 4:38
  SPEAKER_00: And this profit is actually what you're getting paid pro rata for the percentage that you own of your business.
• 4:43
  SPEAKER_00: It is a huge leverage point to building great wealth.
• 4:47
  SPEAKER_00: The fourth one is equity.
• 4:48
  SPEAKER_00: That is what the company itself is worth.
• 4:50
  SPEAKER_00: So it's paying you all the while as you build the value of that equity.
• 4:53
  SPEAKER_00: Now, this bucket can be one of the biggest ones if somebody understands how to engineer their company to effectively pay them through this bucket.
• 5:01
  SPEAKER_00: I find so many people don't even think about this bucket, and it is a huge mess.
• 5:06
  SPEAKER_00: It's a lot easier than you think to build the equity bucket.
• 5:09
  SPEAKER_00: And there's very simple ways to set these up to pay you consistently.
• 5:12
  SPEAKER_00: The fifth bucket is passive income.
• 5:14
  SPEAKER_00: This is when you don't have to work in order to get collections from what you invested in.
• 5:19
  SPEAKER_00: And I have a lot of my own wealth building inside of passive investments.
• 5:22
  SPEAKER_00: I love it because it doesn't require my time, it doesn't require my energy, and the money just keeps on making more and more of its own kind.
• 5:27
  SPEAKER_00: Okay, so what I want you to do is take a look at your PL and ask yourself how many of these buckets am I really able to fill up through the business that I've engineered or the business I'm going to engineer?
• 5:38
  SPEAKER_00: If you don't have a profit and loss, look at what your business plan that you're building or what your future performa is telling you.
• 5:44
  SPEAKER_00: That is extremely valuable as a tool, is just to look at where you're at.
• 5:47
  SPEAKER_00: So if this is useful to you, you guys should know by now, but I'm putting one of these out every week.
• 5:51
  SPEAKER_00: I think that if you want to learn more about what it is that we are actually doing, tune in, subscribe.
• 5:56
  SPEAKER_00: Now owners hear about bucket five and go straight at it.
• 5:59
  SPEAKER_00: They start a side business, they buy a rental, or they chase a course or a product line, get all excited, or some kind of second thing entirely.
• 6:06
  SPEAKER_00: And that is not what you want to do.
• 6:08
  SPEAKER_00: That's going out of order and it causes your company or clinic to limp if you go out of order.
• 6:12
  SPEAKER_00: Here's a little tool that I use.
• 6:14
  SPEAKER_00: Picture a pumpkin patch, one plant that puts out a lot of pumpkins, and every one of those little pumpkins is pulling energy off of the main vine.
• 6:21
  SPEAKER_00: And it is pulling energy off of the one that could have gotten bigger than the rest.
• 6:24
  SPEAKER_00: And so instead of ending up with really good, solid quality pumpkins, you oftentimes end up with a lot of small pumpkins in your pumpkin patch.
• 6:31
  SPEAKER_00: And that's not what you want.
• 6:32
  SPEAKER_00: Your core stream is your salary and benefits, and it comes from doing exceptional work inside the scope that you already have.
• 6:39
  SPEAKER_00: You never leave the core stream to go create other streams.
• 6:42
  SPEAKER_00: And too many people do it.
• 6:43
  SPEAKER_00: I see it all the time.
• 6:44
  SPEAKER_00: In fact, one of my partners this week talked to me about how they've had one of the worst performing years they've ever had in their core business.
• 6:52
  SPEAKER_00: As we went back and looked at what was causing it to be such a poor performing year, it was clear that there was a leaving of their core stream of income in order to build these other businesses that they felt like they should, because they heard an influencer talk about how you needed multiple core income streams.
• 7:06
  SPEAKER_00: But they left the main main pumpkin to go feed the smaller pumpkins.
• 7:10
  SPEAKER_00: And we were able to correct that and we charted a course and made a plan for how to actually bring back an obsessive renewal on the existing stream.
• 7:18
  SPEAKER_00: Once we got it streamlined to where he could actually empower others in the business while he was away from it, which is the goal we have now, so that he could actually build the other business with power, energy, and time and not lose that core income stream.
• 7:31
  SPEAKER_00: We had a plan that then worked.
• 7:32
  SPEAKER_00: By the end of our strategy, there was so much energy and excitement, it was palpable.
• 7:36
  SPEAKER_00: Do a great job in the core and the profit shows up because there's finally profit to share.
• 7:40
  SPEAKER_00: Then distributions become possible.
• 7:42
  SPEAKER_00: Then equity is worth something much more substantial because you've built a thing somebody would actually want to buy and you've engineered it to be worth more as well as stable.
• 7:50
  SPEAKER_00: And stable is important too, because you don't just want to build something that fades as you sell it.
• 7:54
  SPEAKER_00: Passive income, I believe, comes last in the sequence, or at least dovetailed in after understanding how the flow of income on the first four buckets works.
• 8:02
  SPEAKER_00: So, number one, you have to have that flow in order to invest passively.
• 8:06
  SPEAKER_00: And number two, it gives you the knowledge on what you would want to invest in passively and have a stream that actually flows continuously into those buckets.
• 8:13
  SPEAKER_00: These are the five buckets in order.
• 8:15
  SPEAKER_00: If you skip the order, I believe you'll spend a lot more years growing five small pumpkins than one substantial that then flows and flows and flows that cash flow into your buckets.
• 8:25
  SPEAKER_00: Now, whether your clinic can feed those buckets at all comes down to profit margin.
• 8:29
  SPEAKER_00: And we need to understand what's eating at your profit margin.
• 8:32
  SPEAKER_00: Profit margin tells you whether the operation is sustainable.
• 8:34
  SPEAKER_00: And there's benchmarks I've seen in physical therapy that run somewhere between 10 and 25%.
• 8:40
  SPEAKER_00: I know that's a broad category, but it runs the gamut.
• 8:43
  SPEAKER_00: And where you land in that range comes down mostly to labor as a percentage of revenue.
• 8:47
  SPEAKER_00: That's what eats most of the profit margin up.
• 8:50
  SPEAKER_00: It's the strongest single lever you've got on margin.
• 8:52
  SPEAKER_00: And it's one most owners manage by feel instead of by the science that they could run it by.
• 8:58
  SPEAKER_00: So look at profit margin per month per clinician.
• 9:01
  SPEAKER_00: The total profit margin can actually lie to you here.
• 9:03
  SPEAKER_00: So break it down per person.
• 9:05
  SPEAKER_00: That number is what tells you whether adding another therapist makes you money or just adds hours to your week.
• 9:10
  SPEAKER_00: If profit per clinician climbs as you add people, you've got a good model and growth will pay you by growing more.
• 9:17
  SPEAKER_00: If it fails, growing is actually going to cost you more money.
• 9:20
  SPEAKER_00: And every hire actually makes it worse.
• 9:33
  SPEAKER_00: Write down which ones are living and which ones are empty.
• 9:36
  SPEAKER_00: Then choose the next one in the order and go find out what has to be true for it to start paying you.
• 9:42
  SPEAKER_00: And that's why my salary is the lowest of any PT at my company.
• 9:46
  SPEAKER_00: Primarily because earned income is also taxed higher than the other buckets downstream, and because earned income is also something that I'm not earning at the same leverage level as the buckets downstream, like distributions and equity.
• 9:58
  SPEAKER_00: My salary was never going to be the point of what I was trying to build with that business.
• 10:03
  SPEAKER_00: It is a point, but it's not the main point.
• 10:05
  SPEAKER_00: I also set it up that way to kind of remind myself to become a better owner and a better investor because that's where the other four come from.
• 10:12
  SPEAKER_00: And also with those investments and being a better owner, I become a better leader worth following and I create a legacy for the people that I love.
• 10:19
  SPEAKER_00: So this is not about charging more per visit inside of a clinic.
• 10:22
  SPEAKER_00: That's never been what it's about.
• 10:24
  SPEAKER_00: But making money is in fact a responsibility of the business.
• 10:27
  SPEAKER_00: If you handle that responsibility properly, it actually automatically stops competing with your purpose.
• 10:32
  SPEAKER_00: And instead, it merges with the purpose.
• 10:34
  SPEAKER_00: And that is a beautiful harmony.
• 10:36
  SPEAKER_00: If that's useful to you, subscribe so you don't miss what's coming next.
• 10:39
  SPEAKER_00: And we're going to watch this one next.
• 10:41
  SPEAKER_00: What the practice can pay you only matters once you've decided what it's supposed to pay for.
• 10:45
  SPEAKER_00: I created an entire video on building the business around your life instead of the other way around.
• 10:50
  SPEAKER_00: And there's a link to watch that one next.
• 10:52
  SPEAKER_00: You don't take on the lease risk and the payroll risk and the risk to get paid by trading time for your paycheck.
• 10:58
  SPEAKER_00: Go find out which buckets this clinic is already capable of filling, and I'll see you on the next one.