Top 10 Tips for Group Owners wanting to SCALE
Updated: Jan 28, 2022
If you're fortunate enough to invest in a consultant to help you set up your group in a scale-able, please do so! This can save you lots of time and believe it or not, money! Unfortunately, I learned my tips and tricks the hard way; through trial and error. I wouldn't wish that on many people. If you are new to the Group Practice business or if you're considering transitioning from a solo practice to a group practice, these ten tips are a MUST READ!
TIP # 1
Structuring Your Group for Scale-ability
In the beginning most people are just trying to survive the legal process for registering their business, deciding on what type of entity to become, whether to use an attorney or not, etc. Most of the time we are not thinking in terms of scalability when we start our practices. We don't consider what's best for the company when we have not one, but ten locations until it's too late! You will most definitely want to consult with a CPA and attorney in your state to determine the best way to get the most bang for your buck based on your state's tax laws and business restrictions. Personally, I chose to be a PLLC taxed as an SCORP, mostly for the tax benefits based on my projected income and growth.
When you're structuring your group think about the ramifications and incentives for having a business partner(s). Simple questions like, "What are your long term goals for this group?" is a good place to start the conversation. If you are going to contribute blood, sweat and tears to make your group successful and your business partner is just looking for a supplemental income you will definitely have some problems down the road. The more people you have involved in the ownership component of your company the more challenging decisions become, internal allies can form, manipulation and greed can emerge and resentment can fester. On the flip side, having more owners can mean more minds in the mix to generate innovative ideas, progressive growth strategies and more hands on deck to help in the time of need.
TIP # 2
Choose the Right Electronic Medical Records System
If you plan to stay small, then choose an affordable EMR that is easy to use and offers the features you are looking for. Think about documentation, accepting payments, metrics, etc. If you plan to scale you'll want to make special considerations when choosing an EMR to meet those needs. If you are an insurance-based practice, specifically Medicaid and/or Medicare, you will need an EMR that allows you to customize your templates for documentation. As many know, insurance companies are always adding new requirements to their standards of care which providers are expected to meet. The only way to do this is to have an EMR that allows you to make changes to templates such as progress notes, treatment plans, needs assessments, discharge summaries, etc. If you want a referral for a comprehensive and customizable EMR that I use in my own practice, email me!
TIP # 3
Determine a Pay-Scale that You're Comfortable With
In my eBook, I discuss profitability and pay scales in more depth, however determining what type of pay scale you feel is in line with your company's purpose and culture is very important. Whether you are using an incentive based pay scale (what I use), a percentage split, a flat hourly rate, a salary or a different option, getting it right the first time is critical. This is not to say that you can't make changes as you grow because you can, and you should, but it does bring along more challenges if you wait until your group is already established.
TIP # 4
Be Selective in the Hiring Process
New businesses tend to make a lot of mistakes during the start-up phase. You have great ideas, lots of energy and drive, but no applicants. People don't want to leave their "safe" job with benefits to come work for your start-up because of the associated risks. Applicants love your ideas, your passion and purpose but they're experiencing some doubt just because you're company is new to the field. For these reasons many group owners are unable to be as selective as they would like so they end up hiring clinicians that aren't their ideal provider. The could mean lots of compromise for the group owner; often times compromising the culture of your company. Despite all of the barriers, you must hold out and expect that you may not get as many applicants as you would like in your first year. Just know that bringing on the right people who are have a fire burning to spread your vision will catch on and before you know it you'll have more applicants than you'll ever be able to hire!
TIP # 5
Start with a Detailed Accounting Service
I remember my first year of group practice, the single component that drove my practice was total dollar amount sitting in my bank account. An accounting service like Quickbooks, what I use now, was not even used. I look back three years later and actually cringe at the thought of basically driving my business blindfolded! You must have an accounting service at your fingertips that can quickly run one very important report, the Profit & Loss Statement. This is a report that has been super helpful in determining when to grow, when to hold back and when to re-evaluate the budget. In the eBook , I talk about using Percentages to make important business decisions and your P&L Statement will allow you to run those reports in a matter of seconds. Hear more about this in the Profits section of the Million Dollar Practice Series podcast by clicking on the image below!
TIP # 6
Know Your Numbers
My favorite part!!!! You must know your numbers if you are looking at scaling your business. This does not have to be a complicated process. Just determine what you want your Top Line Revenue to be and work backwards. If your goal is to gross one million dollars and your average reimbursement rate is 100.00, that's 10,000 sessions per year, 192 sessions per week, 38 sessions per day, which could equate to 5 therapists seeing approximately 7.7 clients per day. You can change any variable in this equation to get an adjusted number. If you have 10 clinicians and your goal is one million dollars, that's just 20 hours per week per clinician. Perfectly doable! You'll also want to know your gross and net profit margin per session as well as what the average profit margin on a clinician per year is. For more detailed formulas or examples, check out the eBook! There is also a Planning Podcast that outlines easy ways to financially plan and know your numbers!
TIP # 7
Start with Great Branding
It's so hard to change your branding once you start. Spend the time, give it enough thought and consideration and do it right the first time. Ask your colleagues, friends, or even strangers to get as much feedback as possible. You'll want something that's easily recognizable, that is in line with your desired culture and that you can capture your ideal audience. Think about all of the ways you might use your branding and make sure that what you have meets that criteria. We've created simple but effective marketing materials that highlight our staff members. For more information on using these to grow you practice, click here! Three years ago I would have never imagined our logo on tshirts, baseball caps, bumper stickers, flyers, stickers, billboards, etc.
TIP # 8
Get Your Systems & Processes Right Immediately
Often times when you start a practice your main concern is surviving! You think about what is going to work for you now and not what would work for you now and as you grow. When you start developing your processes, keeping the end goal in mind is key. If your plan is to scale a million dollar practice, go into the planning process creating ways to make what works for you at 100K also work for you at 1M with minimal modifications.