Jack O'Brien: Oh, Peter Flynn, Hannah Dunn.

Ben Lynch: Hey, is yours blurry, Ben? Like, I look blurry or do you look blurry? You look blurry. Do I look blurry?

Jack O'Brien: No, you don't look blurry. I'm blurry now, yeah.

Ben Lynch: Pete's blurry.

Jack O'Brien: Pete, you just need to focus more. I can help with that, Pete. I've got some focus juice on hand. So do I. Oh, yes.

Ben Lynch: Oh, yes. Hannah, have we got you over to coffee yet or not?

Hannah Dunn: I'm so boring. I've only got water here. Oh, gee.

Jack O'Brien: Well, I could convert you to the focus gum if you're interested, but that may get us struck on YouTube.

Ben Lynch: G'day, good people. Welcome to the Grow Your Clinic podcast by Clinic Mastery. Here's what's coming up inside of this episode. Do not go through your P&L in alphabetical order.

Jack O'Brien: It lacks context.

Ben Lynch: How do you financially manage your team around some of the things that might actually be costing you more than you think?

Hannah Dunn: There are alternatives to doing unpaid leave.

Peter Flynn: The first thing that pops to your mind when you think of the most common expense… I want to go with wages for therapists, number one.

Ben Lynch: Like that is where… Just get rid of them.

Jack O'Brien: I know, I know. Nothing in isolation is cheap or expensive. Cheap or expensive is only relative to something else.

Peter Flynn: I'd love to see the expense or investment item for cocktails that Shane Davis has at a CM event.

Hannah Dunn: I'm not sure why you're bringing it up. That does not need to be cut.

Ben Lynch: This episode will be right up your Allie if you're looking to boost your profitability. We're diving into managing clinic costs. And trust me, you'll want to hear Hannah's take on how much meetings are costing you. Plus stick around for when Jack and Peter point out costs that you could cut from your clinic today without sacrificing client care or team culture. Before we dive in, today's episode is brought to you by AllieClinics.com. If you're the kind of clinic owner who loves to feel organised and stay ahead of the chaos, you'll love Allie. Think of it as your digital clone. It's the single source of truth for all your clinics, policies, systems, and training. Test it for free at AllieClinics.com. And in other news, applications are now open to work with us one-on-one at Clinic Mastery. If you want support to grow your clinic and bring your vision to life, just email hallowettclinicmastery.com with the subject line podcast, and we'll line up a time to chat. All right, let's get into the episode. Welcome, everyone, to episode 326. We have a full house. Jacoba and Hannah, Peter Flynn. Great to see y'all. Today, we're going to be getting into a very important topic, Hannah, that you teed up, which was managing costs inside of your clinic. Before we get to it, though, there's a couple of things on the desk. I've got a few J.O.B. and then I'll throw to you. The first is a warm welcome to folks who've installed Allie into their clinic to help with the numbers and the system side of things. I got Clem, Mick, Jacqueline. Kirsten, Sajiya, Catherine, and Paul. And we're very soon to roll out the integration. Maybe by the time this is released, we will have rolled out the integration with Splose, Halaxy, and Nucle. That adds to the Cliniko integration as well. Go to alieclinics.com to find out more and do a free trial. J.O.B., what else has come across your desk? What do you want to mention?

Jack O'Brien: Well, we've had a couple of comments on Spotify. So thank you to John, said great episode, heaps of gold nuggets there. And listeners, we asked you, what speed do you listen to Ben Lynch? And so Trish jumped into the Spotify comments and Trish listens at 1.5. Trish, that's still a bit slow, speed up please. I was going to say too, surely too. Thank you so much for John and Trish for jumping into the comments. Listeners, if that's you, please head over to Spotify, engage with us, leave us some feedback and if you're a clinic owner who's looking to fill your books or grow your team, please reach out to me, Jack, at clinicmastery.com, and we'll be in touch. We'll see if you're a good fit for what we do, if our programs will work for your clinic, and ultimately help you to build a clinic for good. So if you're looking to grow your clinic, fill your books, or grow your team, we are ready, at standby, ready to go. Please give us a call at clinicmastery.com.

Ben Lynch: Fantastic. Thanks for trolling me, Trish. So if you paid any attention at all to headlines around about the start of the year or almost this time last year in the US political space, whether you agree or not, One of the big topics of discussion was the Department of Government Efficiency, DOGE. It was headed up by Elon Musk. Essentially, they were looking at how do we cut costs and balance the budget of the country of the US. It got a lot of press. Anyway, at the start of the year, we were talking internally, what a great theme for our business, for your business, to look at costs and look at efficiencies through your P&L, through your budget, and find areas that might just be sucking away the profit from your clinic. Hannah, you brought it up in a thread recently and said, hey, this would be a great topic to dive into. We've been talking about how to add more new clients, how to boost revenue, all the things that add to the top line. Hopefully, they flow through to the bottom line. But you said, why don't we address the thing that so often gets overlooked? I want to start with a specific area that you mentioned, which was How do you financially manage your team around some of the things that might actually be costing you more than you think? Specifically, you called out unpaid leave. Let's start there. What were you referring to? How can we navigate this?

Hannah Dunn: Yeah, I think often people will think, oh, I've got some team members who want some extra leave. It's great for me because I don't need to pay them that week of salary. And so that is a win-win. But ultimately, what people forget to take into account is that you still have that room available. You don't have the revenue coming in. And if we think about for us with OT practice, that's potentially $1,000 a day if we're looking at five clients at $193.99 or $200 a client. So essentially costing you $1,000 minus that day salary, while also still paying for admin, still paying for all the other subscriptions and things that you're paying for, for that person for that time.

Ben Lynch: And so what have you found helpful in navigating these sorts of conversations with team members around leave and policies? How do you frame it up?

Hannah Dunn: Yeah, definitely looking at really being clear about what leave everyone is entitled to. We do say like, of course, if there's extenuating circumstances, like you've got your brother's wedding overseas, we're happy to look at what that looks like. But there are alternatives to doing unpaid leave. Maybe you've got people who work a nine-day fortnight and they want to do a tenth day for a couple of weeks to increase their billables to still meet their KPIs for that quarter and then get that extra week of leave. Well, while you've got that empty room, you've already made up those times and they've pushed themselves for that period of time. Maybe you've got an option of going into negative leave for a little bit of time. Don't want to open that up too far because it could be a liability, but maybe a couple of days.

Jack O'Brien: Jack, put his hand up. How far is too far, Hannah, into the negative? As a general rule, you know, there's not financial advice, but if I was to be financially advising someone, I'd be don't go into the negative at all. But in human context, Hannah, like how far is too far?

Hannah Dunn: Yeah, I think a couple of days is pretty, it depends how long it's going to take them to make it up and how full time they are and potentially how long they've been on the team. You might have someone that you're really confident with where you've made an agreement, might be the time of year. I don't know, Peter, have you got thoughts?

Jack O'Brien: I mean, you're talking days, not weeks, essentially.

Hannah Dunn: Yes, I would be.

Peter Flynn: We would go five days, basically like one quarter of their leave, they could go into advance. And it wasn't just for, you know, we're going on a boys or a girls trip for a while. There has to be a real reason behind why we're making an exception here, but we're not doing it. We're not going to, like you said, unpaid leave because the negative consequences of that, we believe are far higher than going into some negative leave there.

Hannah Dunn: And it just is about that consistency across team, like making all of that really clear about what the options are and really trying to plan out that leave early in the year. And from the moment they join the team, being clear about what it is, what the expectations are around notice periods of when you're going to take that leave.

Peter Flynn: My brain started like thinking in numbers and spreadsheets when you say, look, 10 day fortnight instead of a nine day fortnight. How do you manage, I guess, that extra day being overtime from a HR perspective?

Hannah Dunn: Look, it's a very good question. I don't know the answer to that. How have you navigated it?

Peter Flynn: We didn't necessarily do it, but I thought you might have said that you do that. So I was wondering, like, have you worked out exactly like how that would work in your clinic in order to make that feasible, because the challenge in my mind goes straight to numbers. I'm like, all right, but that's not technically like for like, and that's actually going to cost the business more. And potentially where I've seen some businesses fall down a bit is if someone will work more hours during the fortnight, but the numbers actually don't, the billables actually don't go up. They just take the same amount of work and then go, ah, got more time to do this in. And then we're bringing them higher for it. So that's my guess.

Hannah Dunn: That is actually part of our requirement that it has to be billable work, that we don't allow it to be non-billable hours. And potentially they make it up by working from home in a day where they're taking some of that travel out or they're doing higher billable activities. So we're looking at the whole number over the quarter, which is why it wouldn't be for us a whole week, because making up a whole week is quite a tricky thing to do in a quarter. But then again, like when we look at our key performance indicators, we're looking at them usually over 11 weeks out of 13 weeks. So there is that space to put extra clients sometimes into those times. If you're not going to take leave in quarter one, but you are going to take leave in quarter two, then you can, we allow them to build it up in quarter one. And instead of getting that reward paid out, we contribute it to the quarter two Tally.

Jack O'Brien: I really love the specifics here and like getting down into the nitty gritty. I also think it comes back to, and you touched or alluded to this, Hannah, but specifically it's like, we need to make sure we broach this conversation from a policy perspective, but also from an induction and mentoring perspective so that we're not caught off guard. We wanna be, like as Shane Davis would say, we wanna be looking at a policy, not looking for a policy, And when a team member comes to us, we don't want to react, but we want to have considered, measured out our approach, whether that's unpaid leave, whether that's annual leave into the negative. None of this should be surprising to you or surprising to the team member.

Ben Lynch: So Jack, as we zoom out a little bit more here, how would you encourage a clinic owner to think about managing their expenses, their cost centers, so that they can grow more profitably moving forward?

Jack O'Brien: We want to think about your cost centers and expenses. In the first instance, whether they are a true expense, as in an overhead that is a necessary spend, or are they an investment? And so if they are an investment, what we mean by that is when you spend money, it should make you money back. It should generate revenue. So there are revenue-generating expenses. An example is therapist wages. When you employ a therapist, they generate revenue. When you put money into, say, paid ads, maybe it's Google ads or Facebook ads and even the agency alongside it, That is an expense that generates new clients, which generates revenue. Business coaching is an investment that generates revenue. Compared to something like electricity bills, this is a necessary expense that does not generate revenue. So splitting up your cost centres as either investments, revenue generating, or overheads, non-revenue generating. And then we wanna go through those non-revenue generating expenses and work out, well, is there something here that we can just completely delete and stop spending on? Or is there something here that we can leverage tech and some automation? Can we look at an alternative? How can we streamline this process? So that's probably a high level way of thinking, Pete.

Peter Flynn: I'm interested just because something that came across my mind when you said that, Jack, is we all go through a lot of P&Ls here, right? We all see a lot of the other side. Let's go around. I'm keen to hear the first thing that pops to your mind when you think of the most common expense you find in there that is either way too high or just shouldn't be in there at all. Like, I've got mine, but I'll wait. Anything.

Hannah Dunn: I think there's subscriptions, like there's always subscriptions that people don't even realise that they're paying for.

Ben Lynch: So you might find a few hundred bucks, a few thousand bucks a year to manage and cut in subscriptions. That would be your go-to. Are you thinking, Pete, as well, like your just quick go-to, I can action it maybe this week as distinct from, it's big, hairy, it might take a little bit of workshopping to do it. What do you reckon? Eight slate, Pete? I've only noticed your name there.

Peter Flynn: Yeah, there you go. I would, I'd say something that when you look at a panel… Hold on, Jack and Ben haven't gone.

Ben Lynch: Oh yeah. No, I want to know from you Pete, what do you want to hear? Because there's so many that come to mind.

Peter Flynn: What you look for. Something that in your mind, you go through a panel and you look for it straight away. Ben.

Ben Lynch: Oh, do you know what my, I want to go with wages for therapists, number one, like that is where I know. I know. But like that's when I'm opening it up, that's definitely where I'm going to be looking at in terms of sustainability and what's hitting the bottom line profitability. But the next sort of OPEX sort of line would be the admin category. And most people wouldn't even have it all together, where I would find $20,000 to $50,000 of over-rostering of admin that's just sucking away from the profitability of the clinic, meaning they're kind of, quote, overstaffed, if you would, in the admin section. That's something that I feel you could move on pretty quickly and you could save reasonably meaningfully. That's probably where I would go to first as I'm scanning.

Jack O'Brien: I like it. Jack? Well, I'm going to get off the fence and I won't say it depends. I wasn't on the fence, I went with admin. I would have either said admin to Ben's point or I was thinking more along the lines of IT. Now, I'm not going to win any friends here. IT support services or stationary. And I'll bundle in telephone in that one.

Ben Lynch: Oh, come on, you're saving hundreds of dollars. I'm proposing maybe tens of thousands of dollars of saving.

Jack O'Brien: Mate, people pay tens of thousands on IT and phone as well.

Ben Lynch: It depends on the IT bill. We have seen some horrific ones over time. But, you know, we're talking about the typical clinic that we'd see here. Hannah, what about you?

Hannah Dunn: Leadership hours as well is a big one that like managing a team, like so coming to your salary, I'd be looking at what is that salary going towards.

Peter Flynn: Hmm. I, I mean, I won't say sick leave. I know that's Mick risk. He, he likes to pull that one out. Lots of money to be saved there, but mine is it services. I, I still find many clinics who have $2,000 a month, it services that is literally just a password reset for Microsoft one drive. You would not believe how many clinics still have IT services. Wow. You're not server based anymore. You don't need them. You're spending $24,000 a year. It's ridiculous. Okay.

Hannah Dunn: That's a shocked face. And we're just as shocked that you were right.

Ben Lynch: Skull emoji across the screen. Look at you. Okay, IT services, so you're getting into the P&L, say in Xero, you're screen sharing with a member that you work with, and you're just hunting for the IT services line item to see how much it is to say, hey, we've got to cut this, we've got to look at an alternative. But what about that clinic owner? Clearly they've got it, Pete, because they feel, I don't know, incapable or they feel they need the safety net and they need support on hand. So what do you replace it with or what do you suggest they do? I replace $2,000 a month. They still need some assurance or sense of certainty. We're not getting rid of their insurance.

Jack O'Brien: Don't worry about that. Look, I can assure them, Ben. I can send them a monthly email that says your IT systems are okay.

Ben Lynch: I know we say a bit tongue-in-cheek here, but seriously, we know the type of people that maybe are investing in these things and doing it for a reason. You can't just say, turn it off. They go, well, what do I replace it with?

Hannah Dunn: Can you just go to like one-off services if you've got time, like if there is something that comes up that's big? Just a call-out fee, right?

Peter Flynn: Yeah. We'll think of it like this. for most clinics that use it, they're using it because it's always been there. That's the way it's always been done at that clinic. And a lot of them, it stretches a long way back to when they actually had their PMS running off servers and it wasn't in the cloud like it is today. So, it was entirely different. So, the way support is done through pretty much every IT thing these days is on the cloud, it's on the internet. That's how it's all done. So typically, Ben, all I do is I ask them, you know, can you tell me like over the past six months, the exact tickets you've raised with them. So what, what have you asked them to do for you? What have they done for you? And what do they do for you? And with that, we can then quantify it and go, right, you are getting value for money. You're not getting value for money. The things you're asking for, we can do without them anyway. This is how you would do those things. But I think it's just seeking to understand. And typically by the end of going through those questions, they're like, Oh my God, I need to get rid of this. And. You don't need to say too much around that. Yeah.

Ben Lynch: Jack, you raised a good point around investments and thinking of costs as investments. I agree and disagree in the sense that we would say every decision is an investment decision, whether it's generating revenue or not. It's some way playing a role in supporting our team. For instance, CPD. Maybe you say, okay, well, I hope my team are more competent or capable of seeing a certain caseload or client load, but maybe it's months away from seeing that, but I still need to invest in CPD today. So take me back to maybe even when you look at your P&L, as a clinic owner, what do you suggest they do? There's a lot of items. There's a lot of line items that go into it. How should they think about it? Is it literally from head to toe, A through to Z, as so many P&Ls are structured, and just trying to find opportunities? Or do you tend to advise them to look for something like the needle in the haystack or the big ugly, hairy thing that really needs to be addressed. Talk us through the actual process of auditing finances and identifying cost-saving decisions.

Jack O'Brien: Yeah, I think having your financial house in order is a really key component to this. So, you know, for listeners, if you haven't already, sit back and watch the previous episodes on structuring your profit and loss. But you want to have really well-organised, categorised zero. To make sense of this logically, do not go through your P&L in alphabetical order. It lacks context.

Ben Lynch: And the thing there is like typically you've got accounting next to admin, next to advertising, and it goes all the way through to the letter Z. And they're not of a similar nature or category, right? And they're all, you're looking at them together. So yeah, great point.

Jack O'Brien: And then I think perhaps a helpful mental model or framework for folks to think through is nothing in isolation is cheap or expensive. Cheap or expensive is only relative to something else. And so, I would encourage clinicals to start thinking in a rational, reasoned way. If I'm going to spend $1,000 on this thing, is it the best allocation of $1,000 to achieve the outcome that I want to achieve? What are the other options or alternatives that I could spend my $1,000 on? and which one am I willing to bet on, which one will give me the greatest degree of confidence in achieving the outcome? That's a really pragmatic way to think about things. What am I trying to achieve? What are the alternatives to achieve that outcome? And is this the best deployment of dollars?

Ben Lynch: It's a great role for practice managers, in particular, or the right person on the team to really help do some of that discovery work and auditing work, depending on their competency and confidence levels, to be able to task them. And they could likely find $5,000, $10,000, $15,000, depending on the size of your clinic, probably pretty quickly. And it starts to then, you could say, pay for that role, which we've discussed in previous episodes about getting a practice manager on. Pete, I want to come to you on transaction fees. This is one that often comes up regularly within our Slack community from clinic owners saying, hey, you know, can I get a different provider? Because we're swiping through these cards and we're getting hit with these transaction costs. Can I negotiate them? Can I get better rates? Is that something that you address? Because it's a question we get asked quite regularly.

Peter Flynn: I thought you were just talking about them using their own Amex and you want me to drop in my little referral code. But it sounds like the question was going somewhere else. We could do an episode on that, I think. We could do a whole episode on that. Unreal. But look, it does depend at the end of the day.

Jack O'Brien: Ring the bell, ring the bell.

Peter Flynn: You can ring the bell all you like. When I sit with the clinic owners, they often say the bank fees associated with this, etc. But at the end of the day, if your bank fees from people swiping their cards is really high, it's because you've got a lot of revenue coming through and The alternative is, I guess, you can add the, a lot of clinics will choose to add the fees on, which you can do. Some people don't like that. Some people do like that. Whether or not that's still going to be legal in the near future is up for debate at the moment. You can currently do it, but the RBA is moving to have those taken away.

Hannah Dunn: I'll do it with NDIS, just as a note.

Peter Flynn: True. The best option for most clinics is just to increase your fees accordingly and then just understand that that's a cost of doing business.

Ben Lynch: Okay, so play on is the advice. You're saying basically don't spend your time, don't waste your time on this one. Okay, Hannah, what about coming back to you propose this topic here around other areas for you to dive into and find some cost savings, because we got to get fit to come back to the Department of Clinic Efficiency, DOS and DOD chair, if you're Italian like me or one eighth. Or dope, I thought is another one. Department of practice efficiency. I mean, you go with whatever suits you, but as our mini little dope room here, what else are you looking for to find different areas to cut costs and ultimately have that flow down to the bottom line, or you can reinvest it back into business? Talk us through how you navigate this.

Hannah Dunn: I think we're really also, to your earlier point, around those wages, looking at how we're spending them, how they're broken down in the profit and loss. Do we look at what is leadership hours? What is project work? What is clinical facing billable hours? And what I will often find is they're like, oh, we've got speech, psych, OT, and we've got a team leader for each of them. And they've got four hours or a day each. And then they'll say, and I'll say, how many in each team? Oh, the psych actually doesn't have anyone in their team. The speechy has 20 people. The OT has 30. It's like, okay, well, maybe we need to have a look at this and have a look at what are those hours going towards. There would be more hours if you had 20 and 30 OTs and speechies, but just as an example. And so what we find often is there is a team leader who doesn't have a team to lead or a project that doesn't have accountability. So we can say, oh, this person's working on the school's project. And we'll say, OK, well, what's happened in the school's hours? Like, what did they do? And they'll say, oh, not really sure. And so it's one of two ways. We either increase that accountability or we look at the money that we're spending on that leadership time and make it either redundant or make it work better for us. I think the other thing with team is, you mentioned practice managers before, depending on their level of skill, and this could be for any non-revenue or revenue generating part of their role as team leaders, is sometimes directors will say, we've got this practice manager and this team leader. they really work together and don't really agree with what I say or they spend a lot of time together working on things that I'm not included on and I just think we've spoken on other episodes that our leadership teams should help us not hinder us and thinking about what are those hours being spent on.

Ben Lynch: And so we spoke about this, I think, in the profit and loss episode, where we went through head to toe, shared screen of a profit and loss and looked at how we would structure it and also analyse it. What you're saying is we want to separate the wages that we pay to a team member for their leadership hours, their mentoring hours, their project hours, and the hours that they spend consulting and seeing patients. So that in that P&L, we can actually say, are we a bit management heavy? Are we spending too much dollars, percentage of revenue in this area that's not actually generating commercial gains for our business? I see a lot of people just to unpack that a little bit. start projects or initiatives, as you said, Hannah, maybe with a reasonable intention, but often not clear on what is the outcome of this meant to be. And they're working on it for three months, four months, five months, and you nailed it when you said the clinic owner would say, I don't know, they kind of meet, they've got a channel, they're chatting, they're developing some of these resources, but hey, I've spent maybe $15,000, $20,000 on wages for these meetings to have happened, for this time to be offline, not seeing clients. And what commercial gain have I got? So Jack, when you're speaking with clinic owners in this position and auditing their leadership hours, how do you go about doing it delicately? Because just taking away leadership hours isn't necessarily the thing to do, or you can't move particularly quickly on it. It's a bit delicate. So how do you support a clinic owner who has to address this?

Jack O'Brien: Yeah, sometimes you've got to just draw a line in the sand, right, as a clinic owner. And so it's okay to take ownership and say to your team, hey, look, when we set this up, I wasn't as specific or as clear as you needed me to be. And for that, you know, I take ownership. And so moving forward, here's what's going to happen. We need to see a commercial outcome for this investment of dollars, which just so happens to be your wage. That looks like, Maybe it's the utilisation of their team. Maybe it's the productivity, the revenue generated. We need to see movement in the cancellation rates. But here's the outcome that we need to see and here's the type of work that I would expect to come from that. As few meetings as necessary and no less or no more. I want transparency, you know, I trust you to do the job, but I wanna see the job being done. And so that looks like having things written down, show us your work, show your work, be proud of your work that you do so that we can connect the work done to the investment and the outcome.

Ben Lynch: Well, Hannah, you raised meetings. You talked about meetings specifically and the real cost of meetings. Do you wanna just elaborate more on how meetings might be costing you your profitability as a clinic owner?

Hannah Dunn: Yeah, absolutely. And just on the sharing before jumping into the meetings was, well, even with meetings, like we used to meet with our team to say, okay, tell me where you're at. And we're both sitting down and having, you know, three or four of us together. Now we have a Slack channel that's dedicated to that project. And then there's another Slack channel that has all the project coordinators in there. They do a one to three minute video update on what they've done for that month. So we can all see it and they don't have to watch each other's, but it just means that we're able to tag them if they need support. And so that has just cut a meeting out the information still coming. We can still comment on that, but we haven't sat down for an hour and wasted time having small talk in between all the other projects. in regards to meetings, thinking about everybody in that meeting is someone you're paying that hourly rate to. Do you really need all of those people there? Or could one or two of them be off revenue generating instead of being sitting in the meeting? And I talk a lot about my own stories of what I've learned as a business owner. And one thing is three years ago, I had five team leaders. And I did that because again, fun boss, and I want to give everyone what they want. And so we had five of us in a team leader meeting. I am at the point now where I have one team leader. The team size is slightly bigger than it was then. I have one team leader and that one team leader and I meet and we have two other people who lead an area of the business and that team leader meets with those two people. And the best piece of advice that This might be Jack again, I can't remember who said this to me. No, credit it to me. Yeah, I was like two times in one effort, I could be right, seems a lot. Was if you take someone out of the meeting and you don't have to go back to them to feed them back anything, then they don't need to be in the meeting. But if there is someone that you are going to have to feed information back to for that meeting, then it's considering just having them in the meeting to start with.

Ben Lynch: When you add up the cost of those hourly rates for each of the meetings each week over a year and you see the total figure, you might just freak out a little bit.

Peter Flynn: Yes. And at the same time, just look at what would they otherwise be generating. So it's not just the cost of them being there, but to Hannah's point earlier, it's if they were generating revenue during that time, like it's a big difference. It's a big difference.

Hannah Dunn: And we fight for our best practitioners being our team leaders, which we've spoken to before.

Ben Lynch: So often is the case. Pete, you've created the Rolling Breakeven spreadsheet, which helps clinic owners get a really quick sense of their profitability, sort of this week, this month, this quarter, this year, where they can plug in some of these expenses. And it's made available as a free resource. If you're listening into this podcast, we'll link it underneath in the show notes, but you can head over to clinicmastery.com. We've got a free resources section there where you can download it. Pete, you've done a video about it. But just talk us through how you go about setting a frequency in the calendar to review expenses so that this isn't just an ad hoc or once a year thing that you actually stay across it. And is the rolling break even the tool that you go to?

Peter Flynn: No, it's not, but… Okay, forget the promotion of the rolling break even. Great tool, don't get me wrong.

Hannah Dunn: I use it a lot. But I'm about to change what I'm using, I think.

Peter Flynn: Think about the rolling break even helps you to understand a snapshot in time of what the clinic looks like right now, but it's forecasting into the future, whereas expenses are looking into the past. So anytime I want to see actuals or looking into the past, that's where I look at zero, QuickBooks, etc.

Ben Lynch: No one uses QuickBooks.

Peter Flynn: Some people do. It's a challenge. Get over to Xero. Get them straight over to Xero. I've got shares.

Ben Lynch: We should have an affiliate link with Xero. Go like that.

Peter Flynn: But it's a great product. it is a great product. But that's where I'm looking at expenses in Xerox, because that's where you're going to see your actuals. Typically, I'm looking at them once a quarter with the clinic owner. I'll look at their P&L and their balance sheet once a month. Typically, we do it on the second week of each month. So if I see them on the Tuesday or the Wednesday, the second Tuesday or the second Wednesday of each month, And so there's an item for them to have everything up to date by that time. Then we can be looking at the P and L, etc. We're not usually going through with a fine tooth comb on a month to month basis. We normally do that once a quarter. I think for most clinical is once a quarter. It's more than enough.

Peter Flynn: Yes. I've identified some very frivolous spending habits.

Jack O'Brien: So, I want to direct the conversation. We've talked about a lot of higher-level big expenses, which are really important. I want to talk about the smaller expenses. You know, I think, Hannah, you touched on subscriptions and we see a lot of these little things around. So, I'm curious, specifically, Hannah, and for Ben and Pete, what are some of the smaller fly-under-the-radar expenses you see that are entirely unnecessary? Hannah, I'll start with you and then Pete and Ben.

Hannah Dunn: I think just subscriptions to things that do the same things, like Canva can do a lot now. And so having subscriptions to like iStock photos and things like that, that people might've had just doubling up different. things there or not utilising like their Google suite things as much as they could and having too many different programs.

Jack O'Brien: Like having Google and Dropbox subscription, for example. Yeah, sure. Okay.

Peter Flynn: Pete, how about you? I'd love to see the expense or investment item for cocktails that Shane Davis has at a CM event. Catering. Probably not insignificant.

Hannah Dunn: I'm not sure why you're bringing it up. That does not need to be cut.

Peter Flynn: It needs to be increased.

Ben Lynch: And do not cut the coffee budget, please.

Peter Flynn: No, I'm trying to think of the small ones that I find. I feel like I do see a lot of discrepancies, but a lot of them come down to subscriptions. I'd say small things that they don't really use. that can, it's those things that you have there that you're like, oh, I might use that one day. Yes.

Hannah Dunn: The other thing is like Coles online, doing an order through Coles online versus doing an Amazon order that might come in bulk if you've got the storage or that is a way to really save some of those. There can be a big difference if you're doing like all the paper towels, gloves.

Jack O'Brien: Yeah, just retail rather than wholesale.

Ben Lynch: To answer your question, Jack, in a slightly different way, what I've typically found is that you might be paying for seats in subscriptions or softwares that you no longer need, that aren't automatically changed maybe when someone's inactive or has already left the clinic and the company. And the other that sort of dovetails into that one is that there might be a software that you're using where you could actually share a login to. I mean, that's being reasonably tight, but you might not need several different seats on the subscriptions. You need one that you can log in and share a reasonable example. Canva is one there, Hannah, that you might be able to get away with just a master account and everyone can access that. So I think that's pretty reasonable to do. What else, Jack? What have you got in mind as to the small things? I know you love getting into P&Ls and finding $7.20 that recurs each month and saving that. Well, go ahead.

Hannah Dunn: I was just going to say the other one for us in paediatrics, I don't know with other ones is we use the iPad and app slots. And sometimes there are apps that you are using that have subscriptions that just go roll over and whether it's 12 monthly or monthly.

Jack O'Brien: Yeah, I agree. And so I would say things like stationary is a big one. In a digital world, we don't need more pens and more paper and ink that costs an arm and a leg. So I think there's a big opportunity for us to, A, do better in terms of the environmental impact that we have, but also from a cost benefit. But here's how I want us to think about some of these smaller incidental expenses because when we're talking about the big expenses and if we can reduce some of those it meaningfully impacts our profit but when it comes to the smaller expenses it doesn't necessarily meaningfully impact your profit But what it can do is it allows you to reallocate that budget or that resource more meaningfully. So for example, at our clinic, and this was many years ago, we went on a stationary purge and it was like Project Green. We're just going to make everything paperless and just cancel this Officeworks account, all of those things. Not so that we could add more profit, but so that every dollar saved could go to marketing. Every dollar we could save on these little expenses went to getting more new clients and increasing our ad budget. And so it's more about a reallocation of resource rather than a reallocation of profit. And here is another framework or heuristic to think about, is that for every dollar saved, you would have had to have generated, call it seven times as much in revenue. And so if you can save $1,000, you would have had to generate $7,000. to make $1,000 profit. Does that make sense? So you can save $1,000 or you can generate $7,000. I can tell you which one's easier. It's chopping the Canva subscriptions and stopping the Officeworks account. You can't chop Canva. Save a couple of hundred bucks but put it into new clients because how often do we hear clinics go, oh, cash is really tight and I need more new clients. Great. Stop spending on the little and get more new clients. If a new client, you know, maybe your acquisition cost is $60, $70, then great. Can you find a subscription that you can stop that was $60 and go and get a new client and that new client will be worth, you know, thousands of dollars in lifetime revenue to your clinic. Get more new clients. Sell stuff. Stop carrying so much stock and get more new clients. clients reallocate.

Ben Lynch: It's a great way to think about it. If you're in the position where maybe you're considering investing in a marketing agency or allocating more to marketing or working with someone like us, you know, it feels a little bit tight with the current income that I've got. What if you go and look at where could I find an extra $500 to $3,000 in the month or the year to reallocate? It's a great way to force you to make better decisions.

Jack O'Brien: So a mentor of mine, Wes Holm, way back in the day said like, what have you got laying around in your garage at home? Can you sell a whole bunch of stuff like you whinge about not enough new clients and you whinge about revenue? Well, you've probably got $3,000 worth of garbage in your garage that you can sell on Marketplace tomorrow, spend $3,000 on ads and pick up 15, 16, 20 new clients and then you just generate 30 grand's worth of lifetime revenue. Like sell the stuff, stop buying the new mattress and get more new clients. To buy the new mattress.

Ben Lynch: And look, you've got a great lens for supporting the clinic owners that are just starting up. They're, you know, sort of somewhere between zero and 40K in a month revenue. That makes sense. But we do have a lot of big clinics who are saying, Jack, I'm past that stage, right?

Jack O'Brien: Are you though? Are you, right? Like I don't sweat the small stuff and there's a, you know, if you're stuck in a scarcity and poverty mindset, then that's some head work that you need to get done. But also success breeds inefficiency. And are you lazy with having the 47 subscriptions that you're lazy and you're making excuses for your size to justify your laziness. Get after it. If you've got big goals, then make sure your behaviours match your ambitions.

Ben Lynch: For the head work, would any of your helmets help? Is that what they're for? Just put them on if you have the necessary head work? There's only so much helmets can do to this head, I tell you. So I think one of the key things that we all see, the elephant in the room has to be the wages and the payment structures of our therapists. I mean, that's where 50 to 70 percent of all the money that comes in is allocated to. And the underperformance of those team members being the thing that needs to be addressed, or, Hannah, to your point of just taking our best team members off of consulting and into leadership positions and it just being unsustainable. So, Pete, how do you go about addressing the elephant in the room, the remuneration of our therapists, when someone comes to you and they're on unsustainable structures, whether they're a contractor or they just paid this person an incredibly high salary and they're not performing particularly well. Let's talk about addressing the pay for therapists.

Peter Flynn: I'm thinking, it just sounds like you're really off the team at the moment, mate, but… I think there's a lot of teams though, where we do hear like, Oh, they're really lovely.

Hannah Dunn: And I know they can do it and they'll get there. And that's probably one of the things that I think people don't realise how much it's actually costing the profitability.

Ben Lynch: Well, we're talking in the tens of thousands of dollars here in terms of changes. I'm mindful, we want to balance here, subscriptions at $7.20 a month and finding those. I agree with you, Jack. There's also like, let's address the main thing, is therapists, what they're paid and the relevant performance of those therapists. So I just want to say, Pete, like when a clinic owner comes to you and you do look at their P&L and you go, whoa, You're spending a lot on therapists and you start to unpack it. Maybe you do a year in review with them and you see where these therapists are performing, underperforming and what they're being paid for that performance. How do you start to have that conversation with the clinic owner and help them finding a more sustainable model moving forward?

Peter Flynn: I think it comes down to, I mean, being serious now, a lot of it just comes down to looking at and having the conversation with the clinic because they often don't realise these things as well. But if we found out through year in review that both of, you know, let's say two of their best performers, they pay them this much and they generate this much. It's asking the question, how easy would your clinic be? Right. How good would it feel if you just had those people replicated across everyone else? And it's an interesting perspective to look at, because a lot of the time you see the clinic who's a little bit stressed about money go, oh, it would be amazing. It would be incredible. Like the shoulders drop. There's like a sigh of relief. That would be incredible. I think that's what it's coming back to is it's typically the performance is great, but they're also really good people on average. Right. And so in that In that vein, it's looking at it going, all right, well, we need to look at everyone who's working on our team. It's an investment and we need to see a return on investment. We can love the people on our team. They can be fantastic. But at the end of the day, they still need to perform and meet their KPIs. And often health care clinic owners don't feel comfortable to have those tough conversations and they definitely don't have them early enough. I think if you're going to have a really successful clinic, you need to be able to be their friend, have a great time with them, really enjoy them as a person and simultaneously, both can be true, hold them to account and say, this is what we need from you. Because I guarantee you that team members are going to consistently be asking for more and more and more. And in many cases, asking to do less and less and less. And we have to set the standard of what we expect and what we will accept and what we won't accept. And people talk about culture and there's lots of cool things in culture, the retreats, the beanbags, all the cool shit that people do. Right. It's also looking at what's the culture we have of standards of excellence and how do we show up? Because if you come into a team and everyone is a hustler, everyone pushes hard. You're going to feel really out of place and you feel like you need to be pulled up and work harder if you come into that and you're a little bit below that. But if you come into a team and you are the highest performer and everyone else is kind of a little bit lazy, they don't go the extra mile. they're a little bit late to work, they don't get things done on time. Well, that's the culture you become a part of. And so slowly, I would say most people will become a part of that culture. And so you always get to set that standard. And I'd say it's your responsibility to make sure that you maintain that standard.

Hannah Dunn: And I think there's a real fear around exactly what you spoke to there, Pete, about being like, I want to be their friend and thinking that, yeah, they are mutually exclusive. You can absolutely be that person that puts those boundaries in place while also being friendly and having that fun time. at the right times as well. Just going back to Brené Brown saying clear is kind and that really is what we get from our team when we are really clear and it's about this is what you would do in any business and if we're in a position where if we upset someone because we're being clear about what the expectations are then is that someone we really want on the team. And again, with your question about would you want that person replicated against every team member, thinking about the stress levels that you would have if that person was a person that was replicated across the team.

Ben Lynch: Standards is a great word to use, Pete, because culture, like you said, can be thought of in the vein of being a bit sort of fluffy and good vibes, and it may have those outcomes. But it comes back to what standard are we willing to accept? And if the standard is high, you the behaviours, the attitudes, the attention to detail, et cetera, then the culture includes that performance. It's not just about the feel good. It's the standard of how we take care of clients, how we show up for work and for one another, how we prepare for our sessions, how we deliver our CPD, et cetera, et cetera. So I love that reflection on standards.

Peter Flynn: And I say the the awkward conversation that I sometimes need to have with a clinic owner. is the standards they expect of their team. They don't meet themselves. And it has to start with you. It doesn't matter that you own the business, like whatever your role within the business, how little or how much. But it's like that role has to be done to the same standard. If you don't do what you say you're going to do, you don't get things done on time and you don't show up meaningfully during whatever role that is, even if it's four hours per week. Right. But whatever it is, you have to show up to, I'd say, above those standards and be a leader. And sometimes clinic owners expect you know, the world of their team, but then they do not show up accordingly. And I feel like that is a really hard ask for anyone.

Hannah Dunn: Yeah.

Ben Lynch: Start by looking in the mirror. That's a good point, Hannah.

Hannah Dunn: Yes. Another area that I think that sometimes with what you were saying, Pete, around wanting to be friends and fun is low KPIs or high PD budgets, for example. Like people attribute these to being a great workplace to be at. We do $2,000 worth of PD and they can have as many days as they want off. And that's because we really invest in them versus, and you know, they've only got to see 20 a day. We then ask the question, well, there are clinics who are getting both of those things right, culture and the expectations around investing in their team. And so getting clear about what does it actually look like, you know, you talk about people who show love by giving money to their friends and family, and you talk about giving love through actions. And so what we really want to see is having a nice balance of, yes, we give to our team and support our team, but we also don't overdo it and underlook the revenue or the impact hours that we need to have as well.

Ben Lynch: It's a great point, Hannah, about the CPD budget that clinics have. as one of those ones to address. Even if it's about we keep the budget the same, but we have a bit more of a process for screening what gets done and what doesn't get done. Is it this workshop or this seminar or this online course? and really make sure that there's tangible outcomes on the other side of that, that it is going to allow them to see more clients, or a different type of client, or bill more, as an example. So, just being a little more thoughtful around the allocation of that budget, or reining it back in, and first they have to meet some criteria to essentially unlock that budget, or the next tranche of that budget being spent. Jack, another area that we somewhat touched on is around the occupancy category in your profit and loss. Again, folks can go check out that recent episode where we break down everything that goes into it. Perhaps the biggest one in there is rent. But do you want to just address the occupancy category and where you see clinic owners able to find those dollar wins by screening it, reallocating it, renegotiating it? Where do you go to in the occupancy side of the P&L?

Jack O'Brien: Yeah, you know, sometimes it's really difficult to move the needle on some of those occupancy costs, but some of the smaller ones do, right? And so do you have a regular rhythm in your diary to review your utilities, your electricity and your water and your gas, your insurances, making sure you've got a great broker can save you money over time. And so making sure that you're checking in with those suppliers and asking for better deals. Sometimes it involves transitioning from one utility provider to another. but there is opportunity to reduce the spend or at least reduce the increase on the spend year on year. Then when it comes to rent, it's going to be very difficult to reduce your rent. That typically won't happen. But what does happen is you can increase the revenue for the amount of rent you pay and thereby the expense decreases proportionally and so that would look like perhaps you could look at a shift model and so we've got some therapists working earlier shifts and some working later shifts and one consulting room can fit you know often 60 to 70 hours a week of billable time in it That's one and a half therapists, okay? And so it's not just one room to one therapist. It can be one room to 1.5 therapists. That's a great way to maximise the rent that you're paying. Or you could potentially look at synergising with another practice that's looking to grow and you could sublet out some of your space to another aligned profession that's revenue for your business that allows them to grow their business revenue, we can work together. That helps to mitigate some of your admin expenses often as well because it's shared. So that's how I'd think about the rent, Ben.

Ben Lynch: Yeah, very kumbaya. I love it. You know, just cozying up with other practices. I love the CoLab. You're very CoLab-y today, JRB. It's all about the people. Says the spreadsheet guy. Look, you can change. It's called personal growth and you're a great example right now. Pete, You're nodding your head as Jack's talking here around the occupancy side of things. Is there anything that you would add to where a clinic owner could find some savings? Remember, we're talking about the savings side of things here, the cost cutting or the reallocation, being smarter about our spends.

Peter Flynn: I just want the other things that pop up. I think it's not so much savings, but just stress testing and pressure testing. Am I getting the most from my money? For some people, it's looking at I pay X amount, 8, 10, $15,000 a year to my accountant. What do I get for that? Am I making the most of that? Do they offer with that tax planning that I'm not taking advantage? Are you getting the most out of these key areas of your business? Because I feel like a lot of people, whether it's working with an ads agency, whether it's their accountant, whether it's their bookkeeper, it's looking at, am I really getting the most out of this right now? And what would I need to do to get more out of it? And a lot of the time, it's just having a conversation to say, am I best utilising this? How can I better utilise this? How can I better work with you? Because I'd say a lot of healthcare businesses do run quite lean. They do pretty well. Okay, there are some things, like we said, that pop up and you're like, we can definitely cut those. But I'd say where most have the biggest opportunity in terms of the savings, it's not so much saving, but it's more getting more out of what they do have. When I'm working with them, I ask them, you know, what do you get for this? What are you utilising this for? And they're often just under utilising the services and the subscriptions that they're paying for at the moment.

Ben Lynch: It's a great point. It's not to cut straight away, but go, I feel like I can get more out of this and renegotiate the terms or figure out how you can get more out of it. Pete, one of the things that I've admired about you and that you've really challenged me to do is use some constraint-based thinking. And when it comes to budgeting, I've heard people say things like, OK, we're just going to try and find 5% saving. And we're going to go through all the different areas and see if we can do that. How do you use constraint-based thinking when it comes to cutting costs and getting people to challenge perhaps some of the thoughts or beliefs that they have about their P&L and their spends?

Peter Flynn: I haven't done this with anyone before, so this is doing it on the fly. Realistically, how I would do it is- You shone me up twice today.

Ben Lynch: No P&L, no constraint-based thinking. This is good. A great opportunity for personal growth, just like J-O-B.

Peter Flynn: Exactly. There you go. You're like, oh, Pete's going to have a great answer for this one. I thought you'd be perfect for this.

Ben Lynch: But I know that's something that one of our mentors prescribed to us is like, how could you just go back, look at the budget, 5%, you got to cut it by 5% in your operating expenses. Go figure it out because to J.O.B.' 's point, success breeds inefficiency. It's more than likely you can find that pretty quickly with a bit of thoughtful time scanning through all the spends and a good cup of coffee. So Pete, yeah, how would you approach it now that I've put you on the spot?

Peter Flynn: probably exactly like you just said then. You kind of spoon-fed me the answer actually. Have a cup of coffee. Say, where would you save 5% if you had to save 5%? And probably OPEX is where you're going to look at doing it. You're not really going to jump in and save, no, in Therapist anyway in the short term. Admin potentially. You could look at how could we Potentially here, let's say if we had to reduce our admin budget by 20%, how would we make things run exactly as is? What systems may we need? What automations may we need? How would it run differently in the clinic? How would follow-ups and phone calls run differently? Whatever that may be. So I think that potentially.

Ben Lynch: That's a great addition to it. How can we cut admin costs without diminishing the client experience and maintaining a strong culture? Just adding some variable layers to it so it's not just like, oh yeah, we're getting rid of all the casual admin and we're going to save some money. Absolutely, there's got to be some heart to it, but I like that extension of the question. Even if it ends up just being an intellectual exercise, an activity that gets you to audit things thoughtfully, it's the starting point for greater clarity and discretion over the spends that you do have, whether you pull the trigger on it or not. you're actually going to go through the process. Perhaps the exercise is the most important thing, and to do that regularly. Well, as we look to wrap this episode, I always like to go around the grounds and find out, you know, what is the one key action? Plenty of insights, but what's the one key action that someone listening to this or watching us over on YouTube can take straight away and feel a sense of progress and momentum? Because whenever we wrap up one of our coaching sessions with a member, we always have What's your key insight? What's your key action? Because it's all well and good to learn more stuff, but if you're not doing it, you're not going to get the progress. So in a similar vein, as we wrap this session, J-O-B, you look ready to give us. What's a key action that you would prescribe to someone listening in?

Jack O'Brien: Cancel a subscription, increase ad budget.

Ben Lynch: Nice. A double play. Hannah, what about you?

Hannah Dunn: Yeah, I was going to say, have a look at your profit and loss and check for that IT line item and check what it's at.

Ben Lynch: Great IT services.

Hannah Dunn: Yeah. And just getting clear on understanding what the subscriptions are doing for you and what your team is doing for you for those hours.

Peter Flynn: Nice. Pete, what about you? I'm going to go slightly differently. My key action would be email me at peter at clinicmastery.com and I'll help you. to do this.

Ben Lynch: Very nice indeed. If you want to be serious about it, that's a great way to do it. Yep. Mine would be subscriptions are a very quick win. You probably find a few thousand bucks in subscriptions and you can action it pretty immediately. Some of the other things take maybe a few more weeks or months to be able to do. So I'd definitely go with that for a quick win. Well, thank you very much for tuning into this podcast. Please share it with a friend or a colleague. That would mean the world to us. Or give us a review on the platform that you choose to listen in. It looks like most people use Apple Podcasts and then Spotify Seconds. So whatever platform you're on, we would love for you to share a review or add a comment down below. Jack, Hannah, Peter, thank you so much for your insights. We'll see you on another episode very soon. Thanks. Bye.