Since when have you ventured into anything with great results where you had no earlier knowledge of the subject before you started and then magically it all worked out with no exterior guidance (or skinned knees) whatsoever? Right. Never. At a minimum, you watched a video, read an article/book, you took a course (or years of school for a trade), or better yet you hired a coach or a consultant to guide you. The resources available to the public is endless these days. Some is “free” but typically the most effective is paid for programs. Think of times when you didn’t solicit direction and you learned from the school of hard knocks. How much time did that cost you (and subsequently money)? Results typically cost you either way you look at it. How long are you interested in waiting for results to happen? It’s a fair question, because the real question is, “What are you willing to pay?”
As a business owner, you have probably paid handsomely to the school of hard knocks. When everyone is preaching the life mantra of “balance” you are just begging for “consistency”. You have heard that if you just stick with it and work hard
that everything will turn out okay. But what is “okay”? Who wants to just be “okay”? For all the time, effort, money, and sacrifice — shouldn’t you be in a better financial state than you are currently in? If you have a profitable business then it would stand to reason that your household is profitable. Here’s the definition of a practice owner’s household in optimum financial condition: A household achieving an optimum financial condition is one that is free of all bad debt, where there is sufficient income from multiple sources that cannot be outlived, virtually all assets are reasonably protected from loss including taxes, inflation and lawsuits, plus the business is profitable, sustainable and transferable, and time is free to pursue other life goals. That is financial freedom. How close are you to achieving that definition?
Let’s examine two scenarios. Which one sounds most like yours?
Owner A: Practice Owner A starts and builds a practice that grew fast but is becoming stagnant. This Owner is putting in 50-60 hours of their time and attention to make sure the practice runs. He/she has a semi-supportive staff to service the public but finding good help is becoming more of a struggle. The Owner is responsible for making sure there are new patient visits, interviewing new employees, managing expenses, staff training, client complaints, all while trying to see patients and produce income for the organization. Financially, the Owner is able to pay all of his/her practice liabilities as well has his/her personal expenses and debts. However, he/she is not taking any time off and does not have much set aside for emergency funds or retirement. Most of the profits are reinvested back into the business or have been used to pay taxes. If there was a government shut down or a medical issue with the owner, the business and the household would be in financial peril.
Owner B: Practice Owner B starts and builds a successful practice that is now booming. The practice runs fairly smoothly with the Owner putting in a lot of hours but splitting time between being a practitioner executing technical tasks and working as an executive to build the business. He/she has a supportive staff to service the public and a location the Owner is proud to own. The Owner has hired staff who are responsible for patient visits, marketing, payroll, hiring, building and equipment maintenance, expenses, staff training, compliance, complaints, inventory, etc. The practice is primarily dependent on the Associate Practitioners to produce the gross income. The Owner treats their practice as an investment asset and places financial demands on the business to set aside emergency funds, taxes, expenses, and additional resources for practice expansion. In addition to their salary and other profit draws, the owner pays themselves 10% of the monthly practice revenue as compensation for the risk of building the practice. The Owner has a household financial plan that systematizes paying off bad debt while simultaneously channeling cash flow into income producing assets outside of the business. Their financial plan puts an emphasis on the protection of money from taxes, inflation, and lawsuits. This owner is busy, but they have created time so not to sacrifice those things which are important such as friends, family, life experiences, and self-growth.
Where does your loyalty lie? It’s a serious question. First, let’s examine words that describe the state of being “loyal.” Faithful, committed, devoted, duty, trustworthy, supportive, and truthful. As a Practice Owner, you certainly sacrificed to start and keep your business going. But at what point do you look at where you stand and ask yourself, “Have I sacrificed too much?” There is some crazy notion being sold that you must sacrifice to build a profitable business. Why is this bad? It’s really more of a question of loyalty and an affliction I call “practice servitude syndrome.” Allow me to explain.
Owner A is loyal to their business success. Owner B is loyal to their household success. Do you see the difference? Owner A suffers from “practice servitude syndrome,” and Owner B is in what we at Econologics Financial Advisors call “Financial Beast™ mode.” Which Owner scenario would you prefer? Hopefully you chose Owner B. It IS the optimum financial condition and ideal professional condition for a Practice Owner. If you find you are far away from this scenario or worse — you are already burned-out looking for a way to exit, then you need to change something — NOW! The first step to changing anything is to make the decision to do it. I mean a REAL decision. Not a, “I would like to” non-committed statement. I mean ALL IN! Are you all in? Good! Next step is identifying your current state and comparing it to an ideal one. And then finally — TAKE ACTION! When you take action, you can gain more control over the future. It really IS that simple.
So what are you willing to do about it? How much is it worth to move from “practice servitude syndrome” to “Financial Beast™ mode?” I’m not going to sugarcoat it. It will cost you either way you choose. Let’s break down the cost.
Time & Money. I have met with hundreds and hundreds of Practice Owners and one-for-one they tell me they wish they would have taken action sooner. Why did they wait? The answers are seemingly logical, rational and legitimate — but in actuality they aren’t. The most common reasons boil down to: time and money. These MYTHS sound like this: I want to pay off some debt first before I hire someone to help me, I want to wait until my practice is doing better, I can’t afford it, I don’t have time to add one more thing to my plate, I’m too overwhelmed right now, I want to wait until after…(tax day, holiday, vacation, new year, etc.). This is just a sampling of all the excuses of why NOW is NOT good. These excuses are nothing more than an unwillingness to confront reality and change bad habits. Let’s see if I can bust these myths.
Financial Excuse MYTH: The reality is that people afford what they want to afford. It’s not the cost to get expert guidance, because if you really wanted it and you understood the value, you would make it happen. What would you expect to pay an advisor that helped you get into Financial Beast™ mode? In our experience we find that most practice owners are unnecessarily losing an average of $20,000 a year in taxes to the IRS. How much interest on debt do you pay every year? How much is not systemizing your profits costing you? Answer these questions and add up the numbers. This is what it is financially costing you to wait. I think I’ve made my point here.
Time Excuse MYTH: This one is seemingly the most logical excuse. You own a business, therefore your time is extremely precious. If you allow it, other people will gladly use up all the time you have and then some. Wasting time is not a luxury you can afford. Time is money — it’s valuable. You have already divided up your time to all of your responsibilities, which leaves very little to devote to planning your financial future (this is a common conversation). BUT, is all that really true? Have you ever laid awake at night thinking about your revenue, bills and business solvency? Have you ever had to scramble and carve out time you “didn’t have” to handle a financial problem? Has a financial mistake ever stressed you out? Have you ever tried to organize your expenses only to go back to old bad habits? If you said yes to even one of these questions, I guarantee you have already wasted more time on the school of hard knocks with little to no results than it would have cost you to get help mapping out a clear path with guidance to keep you on track and focused. What is your time worth?
Here’s the real cost to you if you decide to wait (regardless of your reasons)...
Time will continue to elude you. Before you know it 3 months are gone, then 6, then 9. To the degree you could have spent time setting up systems to save in taxes, pay off debt, set money aside and channel your profits properly. Add all this up and it will equal the amount of money you lost waiting until (whatever the excuse). That’s just an example of one year that has flown by. Look back to the last 10 years. What if you had these answers back then? What is the math in losses you have accrued by now? Have I hit a nerve? I hope it’s sinking in. Start now. The time is now. Don’t wait. It will cost you either way. How much are you willing to pay/lose? Do you want more control? Here’s your chance to prove you are a Financial Beast™ in training. Be a recruit and get into Financial Beast™ mode now! You can do it and we can help! Let us be your guide and take the first step to a financial journey that puts you back in financial control.