"I'm Fully Booked. Why Am I Barely Profitable?"

0:00Hey Alex, my name is Ryan Stern and I have um two physical therapy clinics. And we roughly do 1.2 million currently. >> Total or per? >> Uh total. Yeah. >> Margin? >> So, very low. >> Okay. >> Yeah, it's like 10%. >> Okay. >> So, I'm trying to figure out what >> practicing or you >> Uh no. No, I'm I'm out I mean, temporarily, yes, for right now, but overall, no. Kind of out of the picture for that.

0:28So, I'm trying to figure out what's the biggest lever to pull if I Cuz right now, I feel like cuz we don't really do any marketing. We don't have to. We have plenty of patients. >> Okay. >> But, we don't have enough providers to provide care. So, right. It's a manpower thing, but the low margins, so I'm trying to figure out >> I literally >> I know. Well, I'm like, I got my questions lined up and you already kind of answered them, but I'm I'm still trying to figure this out. I mean cuz there are things that we can do on the profit margin wise. I could work on that.

0:57>> Walk me through your sales process. >> Okay. >> I'm just going to get to the heart of the issue. Walk me through the sales process. >> Okay. Um the sales process? Mhm. There really isn't any. >> Pe- I mean, pe- literally Yikesy, right? >> People call me and they're like, "Hey, I need help." I'm like, "All right, let me see if I can fit you in. We can get you in in a month, maybe two." You know, this person we can do >> And they're like, "I'm in pain." and you're like >> deal with it. Kind of, yeah. >> Okay. So, this is what I want you to do.

1:23So, you pick up the phone, right? >> Mhm. >> And before they come in I want you to send them a VSL. So, video sales letter that is mostly telling them uh promise, proof, pain. So, basically like, "Hey, in this video, we're going to show you our unique method of how we get people from oop you know, boo-boo to yay-yay." Right? And and we do it in less time um than you're probably used to. >> And then it's me doing that, right?

1:48>> Yes. And so, if you're tired of insert pain one, insert pain two, insert pain three, then this is definitely for you. And just to give you an idea of what's possible, here's Angie and she had pain most common pain number one, and in however much time, she got to way less pain number two. And this is Avatar, second most common Avatar, and she dealt with pain number two, and this is what happened. Then here's three and three. And I'm only sharing that to say, like you don't have to be stuck this way, things can change. From there, I'm going to lay out our four-step plan of how we actually attack this. So, one thing is old way, new way. So, the way that most people are accustomed to care is the run-of-the-mill model, they just bill insurance or blah blah blah. And our way of doing is more integrated because this is actually we can get out of pain long term. And this is my special, you know, Rhinestone process. And so, that's the big idea. Now, the question that comes up a lot of people's minds is what they think is incorrect, why it's wrong, what's right, proof. And the second thing that people worry about is what they think, why it's wrong, proof, right? And you do that for all the questions, and you're like, "Awesome."

2:43That's what this VSL is. Then, when they show up in person, you're going to ask them for their ID. First thing they walk in the door. "Hey, awesome. You're here for an appointment? Great. Do you have your ID on you?" They pull it out, right? We put it in. We say, "Okay, cool. Can I trade you for whatever card you want to use? It's just so we can complete the patient profile. Great. Now we have card on file before we even ask for money." So, now we get the credit card. Now, at this point, you probably have them fill out the [ __ ] paper stuff of whatever, right?

3:11>> [snorts] >> Make sure that the form they actually fill out has pain-based questions on it. So, we want to ask the same question 10 different ways of like, "How shitty is your life as a result of this pain?" Right? I don't like the circle here that like that doesn't matter. It's what things can you not do as a result of this pain. Okay? So, we have our pain-based cues. >> [sighs] >> Then, they go into the they go and uh get their assessment of some kind, right? Okay. Now, they get their assessment, let's just say the exam.

3:40And then, here, what do we do? Another VSL. Crazy, I know, right? We have them watch a VSL, which looks just like this one, except it's different examples. That's basically it. And then, they meet with the patient care coordinator, your closer, whatever you want to say, and you close. Now, right now, are you selling sessions? What are you selling as your packages? >> Uh no packages. >> Right. So, what we need to do is you need to switch to selling to goal rather than selling the feature, right? You're selling a commodity, which is a session.

4:11>> Yeah. So, a bit of context, we are insurance-based. >> Okay. Understood. >> Just so you know that. >> Now, so everybody's cash practice how you do it. >> [laughter] >> There you go. I answered your question. >> me on that. >> Yeah. Now, um the reality is this, if you're in the insurance like if you're in the Are you pure insurance? Everything's insurance? >> We do a little bit of cash, but not much, yeah. >> Um Dude, when you get into the cash business, you'll be like, I can't believe I did insurance ever.

4:37Um when you're in a fixed payment business, fixed it's price fixing, right? Like you get paid this. >> Right. >> So, the only game that you can play is the bottom-up approach, which means that you have to, for the business, cut all costs and build it like Walmart. I'm just saying that's the If you can't control price, then you have to control ops and costs. And so, you have to create your margin from a cost basis rather than a value basis, which I hate,

5:06>> Yeah. >> but that's the game. >> So, cutting costs. >> Yes. >> Yeah. >> Unfortunately, which means it's way more about efficiencies and like your entire ethos as a business means we run this lean as [ __ ] >> Mhm. >> That's what you have to do. And a lot of practitioners who are insurance only have a lot of emotional struggles with that because they're like, I didn't get into this to become a pill mill or a, you know, this you know, just a a mill of people coming in and out. It's completely destroyed medicine. That is the game you have chosen to play.

5:32>> Mhm. >> And so, if you stay in it, one, you can choose to win, or two, the person who acquires you in the future will then immediately do that to your business, and then it will happen anyways. >> Mhm. >> Or the business will you'll eventually burn out and not want to do it anymore. >> Right. >> One of these three things will happen. Now, door number four is we learn how to acquire customers in a way because you can sell $3,000, $5,000 packages all day long if you follow this process.

6:00>> So, do cash. >> Yeah. >> Not do insurance, is the way you're getting at. >> You can You can stay in insurance. >> Yeah. >> But just understand that that's the business you're going to be in and those are the rules of the game that you have to play. >> Yeah. So, then my goal for 5 million probably isn't going to happen with that model. >> It's not that it So, you don't have a an issue getting insurance customers, correct? >> Correct. Yes. >> Right. You have an issue getting providers. >> Yeah.

6:26>> Which means that you have to remove literally all cost besides providers since they are the bottleneck of the business. And so, then you have to create um Basically, you need to have as much buying power on the scarcest resource. >> Yeah, that's what I'm been trying to figure out how to do that. >> Right. And so, it's basically you have to suck all of the the the the cost bases out of the business. >> Mhm. >> And then you have to push that towards the providers so that you can attract more providers and that's what's going to scale revenue. But you might be at 5 million with 500,000 or maybe, you know, 600, 700,000 dollars in profit. And at that point, you'll have five locations and be like, "Why am I doing this?"

7:01Which is why a lot of people get tired of it. >> Yeah. >> Right? Because they price at the So, like insurance companies price at the point of break even. >> Mhm. >> Like they price it just enough for providers to get their heads barely above water and feel like the Navy SEAL test where you just bounce at the bottom and engulf air, right? And that's what you're doing every day. For sure. And so, we either need to play that game hardcore and basically be ruthless about the numbers and the math behind the business, which is probably not why you get into it, but that is the game.

7:29>> Mhm. >> Or you just have to learn one skill cuz this is a process that we can show you how to do. >> Yeah. >> You just have to get leads that are not insurance. Now, I'll give you a hybrid bridge. Is that okay? >> Absolutely. >> So, when people come in, I want you to run them through this process. But you're going to ask them, "Do you want the best care possible, or do you just want what your insurance covers?" >> I actually wrote that down a little while ago.

7:57>> [laughter] [clears throat] >> And then take them through the process and say, "Hey, your insurance is going to cover this, but it's my duty to tell you that this is what's actually going to get you better." >> Okay. >> And if you just did that, that'll probably create the margin you need to get the people you need. >> And then just kind of when that starts working, just double down on that basically. Build that side. >> Do you think you can do that? >> Yeah, I can do that. Cool. Thank you. >> If you are a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So my team and I put together the $100 million scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly, where they got stuck and how they got past it. And so we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources and finance. And so no matter what you're struggling with, someone else has already struggled with it and solved it. And so I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page, you can book a call with my team and we will look at the business, see if we can help and if we can, we'll invite you out to Vegas and we'll do this in person live.