Ben Lynch: Well, I haven't heard from Jack and oh, now I have. Internet issues. I'm trying. Okay. Try harder. Try harder. G'day, good people. Welcome to the Grow Your Clinic podcast by Clinic Mastery. Here's what's coming up inside of this episode. What are the top three KPIs that every clinic owner should be tracking weekly?

Hannah Dunn: We don't pay our team in KPIs, we pay our team in revenue. I'm just sharing my screen now.

Ben Lynch: We've got a weekly target and then a weekly average. We're looking at rebooking rates.

Jack O'Brien: Cancellation rate is really an indication of rapport and authority.

Hannah Dunn: normalising that mindset of saying, I get it, like, I don't expect you to understand where the money goes. I want to explain to you where it goes.

Ben Lynch: J-O-B, you're interrupting my finalised message. We kicked out your fathom. We can't shut up, Jack. But anyway… This episode will be right up your alley if you're looking to be more across your numbers and have a better understanding of your finances. Stick around for when Hannah opens up about her journey from dodging the numbers to using them as a tool for connection. Plus, you'll want to hear Jack's take on the $200 team activity that sops gossip in its tracks. 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 Ali. Think of it as your digital clone. It's the single source of truth for all your clinic's 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 helloatclinicmastery.com with the subject line podcast and we'll line up a time to chat. All right, let's get into the episode. Well, let's get into it. It is episode 307 on the docket today. We're going to be talking about the numbers you need to know and improve if you want to grow your clinic over the next 12 weeks and 12 months, sort of the short term and then the medium term side of things. My name is Ben Lynch. If you are new, welcome. Thanks for tuning into the podcast. If you're a returning listener, thank you for coming back. You truly are one in a thousand. Every week we have a thousand people tune into the episode, which is really awesome. Now we have a community a bit larger than that of 5,000 clinic owners that get our very practical newsletter every single week. And we're trying to get more of them over to the podcast. So if you've got a friend or a colleague who you think might find value in the pod, Send them this link and get them to tune in. With me again, my business partner, former physio clinic owner, nerd of the numbers and traveling circus owner, Jack O'Brien. I say that in jest because it is school holidays and you homeschool, so I'm not sure if every day is a holiday or you never get a holiday, but how are you entertaining the kids in the school holidays, J-O-B?

Jack O'Brien: Yeah, well every day is a holiday for the kids and no day is a holiday, particularly for my wife. We are dividing and conquering. I'm on my way to a conference event with my eldest. So we are traveling on the road today while my wife and her parents hold down the fort with the other three kids.

SPEAKER_03: Wow.

Ben Lynch: Yes. Did you know there's 11 children between our families in two-year carnivals? Traveling Circus. I'm also joined by Hannah Dunn, senior consultant at CMOT, clinic owner. Hannah, you've had a week.

Hannah Dunn: Yes, I have had a week and we are in school holidays now too. And so it has been hectic. I've just come from playing five rounds of Rat-A-Tat-Cat, which if you're a Paeds clinic and you don't have that game, get on board. And if you work with adults with brain injuries, it's a great one for short-term memory too.

SPEAKER_03: I've just lost multiple time. What is this game?

Hannah Dunn: It's one of our favourites. It is, you get four cards each. two at the end, you can look at them. They've got numbers one to nine and the numbers from five and up have rats on them and the cards from zero to four have cats on them and you want to have the lowest score and at any stage someone can just call Rattatak cat and they believe they've got their lowest hand and so yeah, I didn't think my six-year-old was up to it but she smashed me all day yesterday even though I was crying.

Ben Lynch: We had snakes and ladders last night and scrabble going with our kids. And we had the in-laws over, so grandma, grandpa over, and it was just chaos. So plenty of activities coming out of the woodworks. I went to ChatGPT yesterday and I was showing my father-in-law the voice version of ChatGPT, which I've been using a lot. Not the transcription, but like you ask it and it's like a conversation. And I wanted to give him a demo, and I thought, I'll ask it. How should I entertain the kids these school holidays? I gave him some updates on the kids' preferences, what they love, and then said, what should we do? And it came back with this massive list of really great activities of what we could do. I just said, low cost, easy to do. This is what they're interested in. So I'm going to test a few of those out.

Jack O'Brien: My question is for your chat GPT is that how does the voice feature handle your speech rate and particularly your pauses? Because when I talk to chat GPT, it interrupts me when I'm not trying to think. I feel like I have to make sounds.

Ben Lynch: Oh, no, I've given it a good prompt. I said, I speak slowly. Um, so, and I'll just, uh, do one of those ones. Actually, I met a guy for the first time the other day who listens to the pod and then signed up to trial alley. And he goes, this is the first time I've listened to you in real time speed. I'm normally listening to you at two times speed on the podcast. He's like, you speak so slow.

Hannah Dunn: He's like, record this session and I'll watch it back so I can speak to you.

Ben Lynch: Yeah, sometimes I feel like that.

Hannah Dunn: The other good one for ChatGPT is taking a photo of the games you have and say, what's a different way we can play this game?

Ben Lynch: Oh, nice. Yeah. Okay. Meaning how can I win and the kids not win? Yes, absolutely.

Hannah Dunn: How do I rig this? But it gives you really good ways to play different games with like Pop-Up Pirate or even in your clinics and things like that.

Ben Lynch: Ah, that is so good. Well, yeah, OTs, I imagine you've got so many games to call on.

Jack O'Brien: I probably should call on you, not chat to you. We're talking about school holidays and games, and I'm imagining that the majority of our audience, so the Grow Your Clinic podcast audience, are family folk, particularly the mums. You know, not all superheroes wear capes. They've usually got mum in their bio. So I love that clinic owners are like salt of the earth people who get amongst school holidays with gusto.

Hannah Dunn: Yes, and if you've got a kid with you right now, I've got plenty of photos with me with the kids in clinic or with one lying across my lap when they were a baby with my computer out or standing next to me playing a puzzle next to me while I'm doing other things. It is a real juggle.

Ben Lynch: I reckon you and I, Hannah, have had a few sessions years ago where maybe Seb was on your lap while we're doing the sessions together. That's just so normal as part of what we do. I had a session the other day with Marion. Her little boy came into the screen. It is the juggle. You've got to do it right. Absolutely. Well, all the best to those parents handling the school holidays at the moment. The juggle is real. Well, today we're getting into numbers. Before we do, though, J.O.B., a couple of little updates on the alley front. Do you want to just loop us in with some progress there?

Jack O'Brien: A huge welcome and shout out to these new users. Lucy, Tom, Imi, Chris, Donny L, Josh, Daniel, Lisa, Cooper, and Elise to round out the 10. Welcome to the A11y community. We're excited to help you and your team to level up your clinic operations.

Ben Lynch: Very nice. Well, we're going to talk a little bit about the performance and numbers side of Ali today, because today is all about, for those clinic owners that have ever thought, you know, I want to be more across my numbers. I want to understand them and know how to make really good decisions. Then this is the episode for you. So I've got a question for the both of you to kick us off, which is, What are the top three KPIs that every clinic owner should be tracking weekly, and why do you reckon they matter more than the rest? If you were to pick a basket of three, and at various previous episodes. We have spoken about utilisation and revenue on a really recent episode. We've talked about billable or impact hours. Hannah, some really beautiful framing, and we'll get to some of that in just a moment. But if you were to pick three, I'm going to kick off with you, JB, then come to you, Hannah. What are three KPIs every clinic owner should be tracking weekly, and why do they matter more than the rest?

Jack O'Brien: Okay, well, you mentioned KPIs. Often when I'm coaching inside our business academy and elevate, we don't refer to them as KPIs, we call them CEIs, is a clinical excellence indicators. And that's a key distinction for two reasons. Number one, KPIs feel a bit corporate and just not us. If you're a CM type clinic, KPIs doesn't feel right. So we talk about CEIs for that reason. And because numbers aren't everything, but they're an indicator, And particularly when we're talking to our therapist team, they're an indicator of how clinically excellent you are. They're a proxy. They're not perfect, but they're adjacent and they're an indicator to your clinical excellence. So they're CEIs. So that's just a point on definitions. Here we go. I'll say utilisation, number one. Cancellation rate. Yes. And rebooking rate, number three.

Ben Lynch: Okay. And you're definitely taking more of a MSK lens. Yeah, I was thinking that. Hannah's going to, I can imagine you're going to go with something different here, but three KPIs or CEIs, clinic excellence indicators, as Jack said, that every clinic owner should be tracking weekly.

Hannah Dunn: Yes, I think the first one is revenue that we're tracking because we want to understand what we expect of each of our team members and how close they are to achieving that goal. And then the reason that I'm going to go with two different ones is because I guess in a NDIS clinic or in those clinics where you've got long-term clients, the rebooking and the cancellations don't happen as frequently. Cancellation is still a good measure for us, but the ones that jump ahead of that that I look at are one week ahead, which meaning like how many appointments are in the diary for one week ahead, and then four weeks ahead how many appointments are in the diary for four weeks ahead. And with the topic of school holidays being something we just chatted about, you want to know four weeks ago whether the school holidays are empty in your calendar if you're a clinic that school holidays affect and you want to have those four weeks to be able to plan on how you're going to fill those appointments if they are lower.

Ben Lynch: It's a really great point, Hannah, as to why the one week and four week ahead matter. You're really looking at what does the diary look like. So often we'd hear clinic owners say, well, I visually like open up my practice management software, my patient management software, Nucleal, Cliniko, Splose, whatever it is, and I'll just visually scan to see the white space. And while that can be okay, there's another level to this where you can actually look at the hard data, the numbers, to understand how are we going against our target, and then perhaps even more importantly, how are we trending? Because you might have missed your target, but you're trending up, or you might be trending down and missing target as well, and maybe there's a few alarm bells there. So I love that you're getting clarity on what do we do today to fill the books in four weeks from now, rather than just freak out about, say, this week and be in reaction mode.

Hannah Dunn: And I think they also, like if I say those words to you, revenue one week ahead, four weeks ahead, people know without too much explanation what that means. So I think when you're teaching your team to look at the numbers, they're really simple ones to look at. I think they understand cancellation rates too, but sometimes that's a percentage and then what does that transfer into client numbers and those sorts of things.

Jack O'Brien: You're avoiding the definition conversation there. Is that a deliberate action on your part? Like you're deliberately keeping it simple or is it more just coincidence that they're the numbers you want and it so happens that they're easy?

Hannah Dunn: I think it's a bit of both. I think when I first started, they were the numbers I really understood. And I think the reason I understood them is because they're the important numbers in the clinic. So I think they go both ways. But I mentioned it in relation to school holidays, but it's honestly in relation to anything. You might have a team member who's just struggling, who just hasn't done the rebooking. And I think it does inadvertently show you that that rebooking hasn't necessarily happened.

Ben Lynch: So then how do you nuance the conversation around revenue? Because it's a sensitive topic. Either clinic owners aren't comfortable talking about finances in particular, or their team members aren't and they've had a bad experience in the past. So how do you specifically address revenue when talking with your practitioners?

Hannah Dunn: Yeah, I think in one of those sessions where I had Pippa sitting on my knee and she was three months old or whatever, you said to me, Ben, and this has stayed with me, we don't pay our team in KPIs, we pay our team in revenue. And so being able to talk to them about the numbers has actually really helped with that. I think it needs to, has really helped with them understanding, like, where does the money go? But I think it has to be paired with a conversation. And we've mentioned the $200 activity previously. It needs to be with some education around not just saying that I revenue generated $200,000 and I get paid $80,000. Where does the other $120,000 go? There needs to be some form of conversation to understand that too.

Ben Lynch: And that's where the $200 exercise comes in. Jack, you and Shane Davis have worked on this a lot over time, this exercise where we can talk to where does the money go? Can you just tee us up with that conversation? So the $200 activity.

Jack O'Brien: Yeah, it's a really important activity because I'm imagining there's plenty of clinic owners who are listening to this and go, yeah, easy for you all to say, but I can't talk about money with my team.

Hannah Dunn: Since I started getting coaching like six or seven years ago from CM, I have, and it was a real game changer for me. It was a real struggle for me to see that. I was so nervous about them seeing that amount of money because we all know where that money goes. I don't have to tell you guys who are listening, you know where it goes. And I worked in a clinic where I thought the same thing. Like I did have that mindset of like, I'm charging $150. This was a long time ago. I'm charging $150 an hour and I'm getting paid $40 casually. Where's the other $110 going? And so I knew the mindset that some of our practitioners might have. And so I was really nervous about that. But through the coaching and through getting support and through having conversations and really feeling confident that you know how to explain those numbers gave me confidence. And I remember the director of that practice saying to me, if any family ever questions the cost, I'm happy to sit down with them and say, this is what the costs are. And so that was quite an aggressive response, but it also really did stay with me and think, oh, I do, yeah, okay, I get that there's actually a whole lot of other costs here.

Ben Lynch: Do you recall, Hannah, how you actually went about doing that? Specifically and practically, you said, I'm quite concerned, quite fearful of doing this, but okay, I'm getting supported through the journey. I remember working on this with you. What were some of the things that you feel in hindsight helped you talk about the numbers confidently with your team?

Hannah Dunn: I am really honest with my team. And so I'm not shy to say to my team, hey, I'm taking a new approach here. I'm nervous about it. I understand there may be and telling that story, like when I worked in a practice, this is how my mindset was. I totally understand normalising that mindset of saying, I get it. Like, I don't expect you to understand where the money goes. I want to explain to you where it goes and then having that foundation. And I've never really had anyone question me directly about it. We regularly revisit it. And I think in more recent times, that $200 activity is just so valuable.

Ben Lynch: Mmm, that's really great. So just to capture that, like sharing your own story with the team is a piece of being vulnerable and creates that connection with your team. I remember when I was in this position and wondering about these things. So I'm going to lean into it. It's a little uncomfortable to talk about, but we're literally calling out the most obvious things. And then we're starting to have a conversation. In particular, you're making it relevant to them in their role about what they can earn and what they need to generate to earn. So Jack, just to circle back to the $200 activity, just describe that in a little more detail for someone who's interested in testing something like this with their team.

Jack O'Brien: Right, so the $200 activity, you would go to the bank and withdraw $200 in $1 coins. Now, when we say $200, in various clinics you might do it at the standard consult rate, or if you're in NDIS land you might make it $184 now. But you would go to the bank and get 184 $1 coins.

Hannah Dunn: Can I just say, Jack, you might do it at 184, but people like me will keep it at a round number.

Jack O'Brien: And what we do is we put those coins in front of our team and we give them a few categories and we say, right. Here are the categories of expenses in our clinic. There'll be therapist wages, admin wages, marketing, online services, other support services, et cetera. And we'd say to them, right, can you please divvy up these $1 coins as you think the expenses line up in our business? And so we ask our team to do so. And inevitably, Ben, in almost every clinic, the team get it wrong. They think they get paid less and they've really got no understanding. And that's okay because if we haven't helped them with context, then we can't expect them to have context. And the intention of the activity is to be able to create a little bit of transparency. We're talking categories, not specific line items, but create a little bit of transparency and transparency builds trust.

Ben Lynch: It's a really great point there, J-O-B, around creating this tension gap and this real kinesthetic experience, almost, of people going through the process of allocating the dollar coins to where they think they happen, rather than maybe just coming in and, all right, everyone, we're going to talk about where the money goes in the clinic here today, and you just teach at them. And maybe they start to question it. You actually really involve them in the process of doing it. And it helps you understand the frame of reference that they have for where the money goes and be able to sort of reorient the conversation and educate them. So it's a really practical thing to do. Jack, are there any preconditions, some criteria that need to be established before you go into that exercise? Someone's thinking, that sounds great. I'd love to do it. Maybe I'll do it tomorrow or next week. Would you say, whoa, whoa, hold your horses. You need to do a couple of things first to create the groundwork for this to be effective. I'll come to you in a sec, Hannah, and ask you the same question. But Jack, are there any preconditions or criteria for doing the $200 exercise effectively?

Jack O'Brien: Not necessarily. There's maybe a couple of things that you need to get your house in order first. You need to have your zero P&L categorised effectively so that you can speak to the truth or the reality of what happens with your dollars. That would be the key one. And then how we describe those categories is really important, particularly as it relates to profit. So we might talk about that as the sustainability elements of the business, or when it comes to a few dollar coins in that profit pile, we want our team to understand that if we are to discount or to not charge the gazetted rates or adjust any of those expense things when our utilities and occupancy costs go up or when our marketing costs go up. All of that comes from what is the sustainability or the profit aisle. or if wages go up or whatever that case may be. And that pile is our reinvestment fund. That is what enables us to buy more therapy tools or more gym equipment or invest in the retreats and the team days and all those types of things. So there's not a whole lot of preconditions, Ben, other than get your zero in order and set it up functionally.

Ben Lynch: Yes.

Jack O'Brien: And make sure you're ready for the conversations that subsequently ensue.

Ben Lynch: You're very modest there, I think, Jay, but I reckon most folks won't have their Xero set up in this meaningful, functional way that a clinic owner should view it. Typically, you log into your Xero or MyOB, look at your profit and loss, and a lot of it's just set up from A to Z. You've got accounting next to admin, and it's just not functional. teach and recommend is setting up each of those line items, each of those expenses to be grouped and categorized into functional areas of the business. So a reasonably meaningful thing to your point, Jack, that that needs to be understood by the clinic owner first so that they can at least speak to directionally correct percentages. We spend $4 or 4% on our marketing. We spend $10 in our occupancy costs. So they need to go through that process, it sounds like, really to speak to it with any degree of certainty or at least directional accuracy. Again, we're not going to get it absolutely right because month to month it changes, quarter to quarter it changes, year to year it changes, depending on what you're doing in the clinic. But you just want to have this exercise which simplifies where the money goes so that a team member could understand the relevance and importance to them in their role and obviously the clinic. Now, Hannah, you've got a document here that we're going to screen share for those folks who are listening in. Come and look at this on YouTube. This is a very practical doc that we can talk through. Clearly, you didn't give it to me to stylise it. No, that's all right.

Hannah Dunn: It's our notes from when we ran the exercise at DOTS. And so if it was being seen by anyone other than our leadership team, we might have made it prettier, but we're not turning our back on that. We're just going to share it publicly to the world. Well, I wasn't ready, but here it is. And that's what we're about. Just being vulnerable, raw and honest.

Ben Lynch: Love it.

Hannah Dunn: So this was when we did it with our team, and this information came from the video that if you're a Clinic Mastery member who gets coaching, you get access to the $200 activity. And so we just took out the numbers. So the areas that Jack was talking to before around occupancy, we knew that Clinic Mastery had it benchmarked at about 11%. And then we worked out for us, it's about 10% of the revenue we generate, which is about $20 if we're looking at it out of the $200 activity. We looked at marketing.

Ben Lynch: Sorry, Hannah, just to jump in there, just for those that aren't watching, just describe a couple of the things that go into the occupancy category.

Hannah Dunn: Yeah, so we've got written down there like rent, repairs, rates, utility, power, water, gardening, any insurances on the properties that you're in, really anything that's to do with those buildings that you're… And so in your Xero account or MyARB account, you're actually batching or grouping these individual items under the category called occupancy.

Ben Lynch: And in DOTS, it's about 10% of overall revenue that you spend or invest in that. And so in the $200 activity, you're spending about 20 bucks. And that's what you're illustrating through the course of that activity.

Hannah Dunn: Correct. So for every $200, you're spending about $20. Then marketing, and the thing that I figured out of that is all that seek and the job ads and all the costs that go associated with that. When I think about marketing, I think about that active like brochures and things, but it was really good to bring your mind back to it is all that web hosting, website development, networking. For Clinic Mastery, the percentage is around 10% from the members that we have. For us at DOTS, it's about 2%, but that's because we're not doing a lot of active marketing to get clients in because of the clientele that we have, but that's okay. It does tell us, though, that that's maybe an area that we could be spending a little bit more in and that we might have an opportunity there to invest more in that area.

Ben Lynch: It's a great point and that's part of this exercise perhaps more behind the scenes as a director or clinic owner is how much are we allocating of our income to this area and if our growth objectives and goals are you know stated as you know, something specific, are we allocating appropriately, effectively to get those outcomes? And just to nuance this as well, even though some of these CM benchmarks are stated quite specifically, It also depends on the size and stage and objectives of the business, just to nuance that. Because a startup clinic that you work with, JOB and Elevate, that's somewhere between $10,000 and $40,000 revenue is very different to a clinic that's doing $100,000 to $150,000 per month. in their business revenue, that is, and how they might be allocating, especially if they're looking to add new sites or locations, or they're in a period of maturing or consolidation. So just to nuance some of these targets here, but continue on. We're now on to the admin and support team section.

Hannah Dunn: Yeah, so that for us is our client connection team, practice manager, our wages for our admin team, work cover, the SPLOS that is any of your practice management software. And we're saying that's around 10%. And then for us, it's around 11%, which is pretty on point. And then support services being anyone that's external. So any lawyers, HR, accounting, mentoring, like our CM costs, around 11% and ours was around 7%. We do have a lot of in-house accounting, so we don't have anyone external. And so that's where we can say, well, that's why some of our practitioner wages or admin, although it doesn't align here, but it might be that you fall into other categories because you've got some things internal that aren't external, for example. And then the big one being practitioner team. So wages, work cover, superannuation, rewards, PD. And that's at around 48% is a good target. And for us it's at 58%. So again, looking at why ours is higher gave us an opportunity to review that and see where that's at. And that could be due to wages. For us, it's more so around the amount of PD that we invest in internally, that we close the clinic for days at a time, that we have once a fortnight, an hour with the whole team. So we know where that is and that's okay with us. It's just about understanding those numbers. And so as Jack, who's just phantomed on us.

SPEAKER_03: Yeah, he just left.

Hannah Dunn: Oh, here he comes back. As he said, you can get $200 from the bank. We didn't do it that way. We did it with Slack threads and people just put in their percentages and then they all waited and pushed enter all together so they couldn't see each other's. And then we asked them at the end of those five how much they had left over and they really had nothing. They were guessing these percentages as we went through and they often do guess higher than what is true to where you're at. And then it really showed them that from an operating profit perspective, that there's not a lot left over. And so they really start to understand that. I think one of the great things that Shane talks about in the video is just around what does the word profit mean to you and really rewording that, that often it comes with words like greed, money, hungry, taboo. But really what we want to rephrase it is operating sustainability, which so many of us are constantly looking at. And then what's the benchmark for sustainability being around 8 to 12 percent or 16 to 24 dollars being left over?

Ben Lynch: Yeah, I love this Hannah, beautiful structure that you've got here and the preparation that goes into having the conversation, doing the word association, such a great one to do around profitability. We'll often do that in a similar way. What does sales sound like to you? When you hear the word sales, think of used car salesperson, you know, slimy, greasy, pushy, et cetera. And so often we then have the conversation around, well, we're doing a version of selling or enrolling clients into our treatment plans that we have for them moving forward. So it's a great sort of similar exercise. You can stop the share screen there and we'll come back to it. I think that's a really great framework to have in the background. One, your P&L is set up so that you know these percentages, so that you can do the $200 activity, so that we can have the conversation about numbers and the meaning behind them. The word association is a really great one to do. You've also then got to have on the back end the reframing. Where are we going with this? Profit in your case there. You get the team to answer, but you've got to have a good answer as well to nuance that conversation and not be thinking on your feet. I think to add to this, I love having and asking the question, having the conversation, asking the question, how do you know you're doing a good job? And asking therapists to think about how do you actually know? And it's likely a version of client feedback. surveys that we do, outcomes that they get, reviews potentially that we have come through, the referrals that we get, we're doing a good enough job that friends, colleagues are referring one another, professionals are also referring in, other business are also referring in. And then there's some KPIs that we can say, well, how full are your books? and how well are we generating income sustainably for the business? So I find that also another really good question. How do you know you're doing a good job? J.O.B., you've joined us back online, a quick pit stop, and back here. Just talk to us a little bit more about some of the categories and knowing that you're doing this really well.

Jack O'Brien: Yeah, speaking to your therapist or your clinical team about their numbers gives them an indication of how well they're doing. And I think it's really important that clinic owners speak to the narrative behind the numbers. And I suggest clinic owners really practice like talking to your dashboard, like talking at your computer monitor to practice when you've got alley open, what is the numbers telling me? What's the narrative behind the numbers? For example, Ben, And this is true across all professions, but I'll speak specifically to an MSK context. Cancellation rate is really an indication of rapport and authority. And similarly with, say, DNA rates, I look at DNA rate as an indication of respect. you're someone who can build rapport and respect with your patient, they want DNA. They might call up and cancel or they might call up and reschedule, but if a patient doesn't respect you, they just won't show up. What we're talking about there is taking some of these numbers that are perhaps a little bit black and white and objective and adding some colour to them because it will then guide some of the actions, the tasks for a clinician to take on and improve their clinical excellence. That's how you know you're doing a good job when you're in high demand by your ideal patients who respect you and who buy in and trust your management plans. Ultimately, that's how we know and that's how we use the dashboard for that.

Ben Lynch: Just to clarify that, DNA did not attend. I know different systems maybe use different language, but these are the clients that just didn't show up. Failed to attend is another way of describing that. Joby, what I took from you there is having that conversation, that word association with each of the KPIs, or at least a small basket of meaningful ones that you want to use regularly. You know, when we talk about cancellations as an example, you know, asking our team members, if we have a high cancellation, what does that likely mean? What does it likely say about us as therapists? And getting them to do some of the reflective exercises as well. And if we work through a small basket of those, again, it makes the experience more active rather than passive. Like your cancellation needs to be below 12% and here are some strategies to improve it rather than actually exploring why does this thing matter in the first place? Why should I care about cancellation? So I really like that framing up of the conversation. Hannah, how have you gone about the education process with your team so that they understand the numbers?

Hannah Dunn: Yeah, absolutely. And I love that reframe of like it actually is in your control. Like people will say cancellation rates aren't in our control, but empty calendars in school holidays might be one or two practitioners compared to a team of 15, for example. And it's not because they got unlucky with all their clients. It's about how they worded those conversations potentially. Following up what Jack was saying, I think it's important to understand, as Jack was saying as well, the narrative behind the numbers. Like when we're looking at one week ahead or four weeks ahead, if there's like four weeks ahead, let's say we want to have 100 booked in the calendar for clinicians who have five a day or 25 a week, then we want to see 100. If we're seeing 99 one week and then we're seeing 80, then we're seeing 60. then that doesn't tell us much. It tells us they've got a decline, but it doesn't tell us the why behind that. What tells us the why is when we go to their calendar and see that, oh, actually they've got two weeks of leave coming up. So we know that there's going to be quite a number of weeks that are affected by that. Or if there isn't leave in there, we need to work out why that decline is happening. And I think it works in the other way as well. It helps us celebrate success because sometimes I think it can really feel like a struggle to build up those client numbers, but we don't want them comparing themselves to others. We want them comparing themselves week on week. And if we're seeing four weeks ahead, they were at 60, now they're at 65, then they're at 68, like that's awesome that we're getting that improvement.

Ben Lynch: That's a really great point around being able to first compare yourself to yourself. We often have that as you are the benchmark to begin with. I'm just sharing my screen now on the data side of Ali. And I think what I've seen some of the best clinic owners doing is a version of asynchronous reporting to their team. They'll use a product like Loom to do a video recording or Zoom. And they'll do a quick summary of a therapist performance over a period of time ahead of their mentoring and sort of send it to them. And or they'll get the therapist to do a similar thing back to them. Hey, what are you noticing about the last eight to 12 weeks? What are some things you feel you can work on? And what are some of the things you want to acknowledge yourself for? So on the screen here, we've got more of a clinic overall view of all locations, all practitioners. And in the main screen, we're looking at total revenue. We've got a weekly target and then a weekly average. We're looking at patient visit average. On average, how many times does every new client come in for a visit? It's a version of a retention number. Rebooking rate. and then new clients. I'd actually find, if I was to pick three, I agree with you, Hannah, on the revenue side of things. We've used this in the past, that you can be highly utilised, but not billing appropriately or seeing a different type of client funding, and it's not overly profitable or sustainable for the clinic. Again, we'd always nuance this with the clinic and the context that's there, but I wanna know revenue. And if I've set a target pretty clearly, I can see how proximal or distal to that I am on any given week or any given period. And then secondly, so it's comparison to target, and then I want to see the trend. So I want to see the trend over time, because in this instance, we can see revenue slightly trending down over the last few weeks, but above target. So that's good. That's a quick bit of context. However, I can see that in this last eight weeks, we're down nearly 6% compared to the previous eight weeks. So there's a bit more of a trend downwards in revenue. So I want to explore a little bit more to your point, Hannah, why is that happening? And Jack, you said beautifully, what is the narrative behind the numbers? So I'd go with revenue, new clients. I think that is just such a lead indicator of where your clinic's going to be in the next three to six months. How many new clients are we getting in? And is that sufficient? So we can see on the chart here, we're below our target, but that's a nice little trend upwards. So that's really good news.

Hannah Dunn: A good number there, Ben, as well to help you know when to recruit. like how many clients are you getting in and when are you going to need your next practitioner?

Ben Lynch: Do you find yourself using new clients as the key one? Do you use it in a basket of other numbers? What do you use? That is so often the trigger that people are looking for is when do I need to hire? So what suite of stats do you use to know when it's time to hire?

Hannah Dunn: Yeah, we look at the wait list times and new clients that we're getting in and the utilisation of our current team.

Ben Lynch: And do you have a couple of like benchmarks that you feel comfortable to share here?

Hannah Dunn: 75% utilisation is pretty full for our team. And then if we've got a wait list of two to three months, we know that new therapist, And then that helps us determine which location and what space we've got available.

Ben Lynch: Jack, you're helping a lot of the clinic owners in that sort of $10,000 to $40,000 per month revenue range, where we spoke recently about when do I hire or who do I hire first, a reception or practice manager or a therapist? Just talk us through some of the triggers again that you're looking for to give that younger or early stage clinic the confidence that it's time to hire.

Jack O'Brien: Good question. We would always advocate for you to have an equation or a formula for hiring. You don't just want to do it by feel or by having a look at your diary. And, you know, I liken it to a pilot, you know, when you're learning to fly, apparently I've never learned to fly. for those who have. When you learn to fly, you look at the wings and you look at the horizon. You kind of just feel whether your plane's level and heading in the right direction. But when you start flying the big jets, you need to fly by your dashboard. You need to fly by numbers. And ultimately, you're flying blind or not by feel. And so, when it comes to hiring, you want to think about a hiring trigger, formula, or equation. And typically, similar to what Hannah described, you would think about Is my clinic X percent utilised for Y number of weeks consecutively? And so those two variables can change depending on and your appetite for speedy growth. And that's a function of the recruitment landscape. That's a function of your cashflow and your ability to be robust and resilient against the costs of recruitment and induction and training. And so as an example, Ben, those numbers in a startup or a solid early stage clinic, it might look like when we are 85% utilised for five consecutive weeks, then we would start the hiring process knowing that that hiring process is going to be a four, eight, sometimes 12 week journey to a new recruit seeing patients. So, you know, you want to have a few weeks of consecutively full utilised diaries, and then knowing that it's going to take a few more weeks of consecutive full filled diaries until someone starts. And so you can play with those two variables according to your appetite and the style of clinic that you want to run.

Hannah Dunn: Do you like to have a certain amount of that wage saved up or anything like that that you look at with those clinics?

Jack O'Brien: That's a good question, Hannah. And there's so many variables to that. So the simple answer is no, it would be case by case. Some clinics are far more comfortable recruiting quickly and throwing a new practitioner straight into seeing patients and making sure they break even on week one, which is a really good thing to do to get new team members in and seeing clients and generating revenue from day one. Day one, not just week one, day one. But yeah, in some cases, particularly if your clientele is a little more complex and it might take a while to build up the billing generation, then yes, having some in reserve. What about you, Hannah, do you have a particular reserve in mind?

Hannah Dunn: We don't have a reserve in mind. But definitely like your thought of getting them in and billing, because I think there's been talk that if we say to them in week one, you won't see any clients. And we're sort of sending that message that it's hard to see clients, even though we don't mean to send that message. And so we really want to get people in and revenue generating as soon as possible.

Jack O'Brien: Well, to that point of cash reserves, so I often describe it like this, is your utilisation rate is a proxy for profit in the sense that, and I'll use some MSK numbers, that if your utilisation rate floats between 70 to 85 percent, that 15% is your profit margin. And so, if you perhaps have some cash flow challenges or you don't have a strong risk appetite, then maybe you want to stay at 85% utilised for 6 or 8 or 10 weeks and bank some cash while you are more relatively profitable. Because as soon as you hire, by virtue of having more capacity, your utilisation rate drops down to 60%. All of a sudden, you're at break-even point or perhaps running at a week-on-week cash loss. And that's okay. That happens from time to time. You've just got to go in eyes wide open and cognisant to these realities. And this takes months and months for clinic owners to wrap their heads around. But we have to be literate because our bank account depends on it.

Hannah Dunn: Yeah, and we hear so often in those early days people just saying that they just look at the bank account and that tells them whether they're profitable, whether their bank account's going up or down.

Ben Lynch: Yeah, I think we want to move from checking the bank account to using our zero PNL, from checking the diary and visually scanning it to using KPIs and a tool like Ali. We want to get these systems in place. You're still going to reference your bank account and your diary, but there needs to be more rigour around it. And so I've found as well, J.O.B., that In nuancing that conversation, like you said, it's context dependent for the clinic owner around the reserves. If they feel particularly confident about filling the books, maybe they're really good at marketing or they've got some strong new clients coming through the door, fantastic. We can get them up to speed pretty quickly. Or say you've got a wait list in that case, Hannah, where we can activate a lot of patients into the diary. But if they're finding It's a little bit tricky. I always want to make sure that they've got a thorough plan for how they're going to fill the books of that new therapist and to be able to help them determine it, determine the profitability, the sustainability. We've so often referenced on the podcast, The Rolling Breakeven. It's a tool that we've created and used to help you run different scenarios. You can get a copy of it over at clinicmastery.com in the free resources section. Just check out The Rolling Breakeven. You can see it on my screen if you're on YouTube. And Peter Flynn did a fantastic video, I am on YouTube now, where you can see him break it down and run a few different scenarios here for you to test it out. But head along to clinicmastery.com forward slash free dash resources to check that out and start using it. When it comes to the bank allocations as well, it's just such a subtle but simple thing to do. where we've talked about, Jack, you've got this great phrase, which is every dollar has a purpose, that rather than just have one trading account where everything comes in and you just kind of Bills come in and out, you know, income comes in and out. We want to be able to separate those things so that you're really clear on quarantining the money that is owed for tax or super or leave. Jack, can you just talk through cash allocations so that you make smart financial decisions?

Jack O'Brien: Yeah, and this applies both professionally and personally. And in my observation, many of us have this type of arrangement in our personal finances and budget, but yet we don't prioritize it for our business. And so you're right, every dollar needs to have a purpose because we want to have more money at the end of the month. we don't want to have more months at the end of our money. And so it's really important that for every dollar that is in our bank at the end of the month, we tell it where to go in an order of cascading priorities. In the first instance, I'll speak really broadly here, Ben, we go into much more detail inside our learning portal for our members, but we want to prioritise in the first instance, our reserve account. We spoke about the zombie apocalypse fund last week. We want to make sure we match our liabilities and we have the right dollars available for our leave and our tax liabilities. We might want to have a future fund, perhaps you're saving for some equipment or a team retreat or equivalent.

Ben Lynch: And Jack, just to interrupt, on the leave liabilities as an example, how would someone figure out what that is and how to allocate to it?

Jack O'Brien: Yeah, good question. So in the first instance, annual leave. Now these reports should all be very easily accessible in your accounting software. Your accountant can point you in the right direction. If they can't, it's time for a new accountant. But you certainly want to be offsetting 100% of your annual leave liabilities. And if you have any long service leave accrued, if your team had been around for a little while, you want to have 100% of your long service leave apportioned in cash. And then I'd suggest you have a portion of your sick leave balance. Probably 50% of your sick leave balance is prudent to have put away. Now, it's highly unlikely that all of your team will take all of their sick leave all at once. If they do, maybe check the water supply or perhaps we're in another pandemic.

Ben Lynch: Yes, have a percentage thereof. That was the Daft Punk version of J-O-B. I love that. I get such certainty and confidence when I look at these are the leave liabilities and then the account that says leave liabilities and they match and you're like oh I feel good like I'm not gonna get squeezed you know on one week or the next month when it's maybe a little bit tighter I've put those things aside. helps you sleep better at night, right? So we're talking about a couple of the different rhythms that you want to get on weekly, fortnightly, monthly, and sort of allocating that cash with purpose so that you've got what you need in the coffers. So I love that. That's a really great point, JB. Hannah, in terms of the finances or financial reports like the P&L and a budget, just talk us through some of the rhythms that you found particularly useful yourself and or seeing other clinic owners do when it comes to reviewing the financial reports, not the KPI dashboards, but the finances.

Hannah Dunn: Yeah, so we meet with our accountant every quarter and Warwick, who does our finance management, is looking at them more regularly than that. Every month he does a report. It's aligned with the Clinic Mastery Report to look at those numbers of revenue and client numbers and those sorts of numbers. And then he reports that back to us so that we've got some visibility over that. We also have done like health audits to make sure that our zero aligns with what the clinic mastery recommendation has been and then check that against our accountant and our accountants felt like that's a really good way to go. And so then we have a finance meeting every week, Warwick and I do, to check in and see if there's anything that's outlining, outliers that we need to check in on.

Ben Lynch: Just give us like two or three things that make it to that agenda every single time.

Hannah Dunn: Revenue, any from me, from the dashboards around any therapists with lower clients, any big leave amounts, or if there's any big bills that come in with tax planning, just to know that that big amount is going out or super amounts that are becoming more frequent. So just even updating me about things that I'm not necessarily all over, like, I mean, I am all over this one, but the increase in super would be an example of something to just flag with me so that I know that that is happening. And then, yeah, and then if I want to have any plans for opening another practice or whatever that looks like, having a look at what that would look like on the rolling break even, or if we want to bring on an extra team member in a new role, what that would look like.

Ben Lynch: Yeah, fantastic. I think the one for me is getting that routine with your accountant for them to really or, you know, you maybe pay a couple thousand bucks for them to just go through your business and update you on any liabilities or things you ought to consider. If you're like, I don't even know where to start. I think going to the accountant and saying, you know, I need an hour and 90 minutes, two hours, that'd be a really worthwhile experience to get up to speed with where you're at, what's my tax liabilities, have I set that aside, etc. And then I can start to work towards some clarity and regularity with some profit distributions, which is what it's all about at the end of the day. If you're a business owner, you are an investor, you need a return on investment as well. Well, as we draw this episode to a close, I think we could talk all day. I know you could, J-O-B, about numbers, spreadsheets, and we will get to an episode soon about the Xero and the P&L layout and unpack that in a bit more detail. As I mentioned, we'll probably lose half the audience. But it is super important to have that balance of the clinic excellence indicators, or maybe use key performance indicators, whatever terminology, but the operational metrics you see day on day, week on week, that ultimately drive the financial performance that you typically review on a month and quarterly basis. If there was a key action Or key insight, even for listeners, Hannah, I'll go to you, J.B., to round us out. What would that be? What would you suggest listeners take away from this episode?

Hannah Dunn: Yeah, I think for me, the biggest game changer is getting your team to know their numbers, like having that visibility over Ali or whatever the system is that you use. Because that education is power and without that information, it feels like you're micromanaging the whole time and you don't want to surprise them with data. And it helps in those conversations as well around when they're asking for pay rises and things like that. So it is massive to have them being able to see their own numbers live like you were talking about.

Ben Lynch: Such a good point, because most therapists have had some experience with numbers, and usually it's a bad one. What you're doing is a simple, significant shift by actually bringing them into the conversation actively rather than passively and saying, these are your numbers, you've got to hit it, these are the strategies of how to, and exploring the definitions and the meanings behind it so that they feel a sense of empowerment over their numbers. Well, this has been another great episode in one of the most important areas of your business, understanding numbers so you feel more empowered to make better financial decisions. J.O.B., you're interrupting my finalized message. You can switch off. I've got a beauty. We kicked out your fathom. We can't shut up, Jack. But anyway, this has been another fantastic episode of the Grow Your Clinic podcast. Please, if you're on YouTube, hit subscribe. Only about half of you who tune in on YouTube have hit the subscribe button. It keeps you abreast of all the latest episodes of the podcast and some of the other useful content that we put out there. Hannah, thanks so much. We'll see you again next week. Thanks. Enjoy the school holidays. Bye.