Profit = A Healthy Business

| By Tara Vossenkemper, PhD, LPC

I’m not a naturally business-minded person. I wasn’t raised in an entrepreneurial family. I didn’t grow up around people who talked gross and profit. I didn’t know anybody who owned their own business. I didn’t major or minor in business. My family wasn’t especially interested in talking about intentionality with finances. And up until about six months ago, I was confused by the interchangeable language of “net” and “profit.” (Although in my defense, this was made even more confusing because my understanding of “profit” was based on Mike Michalowicz’s Profit First version, which is brilliant, but different from the way my CPA used it.)

I don’t love finances. I don’t love the language. I don’t love taxes. And it’s notoriously difficult for me to conceptualize big decisions based on financial numbers. I’d much rather create a multi-sheet dashboard with a series of interconnected formulas any day of the week. Understanding big picture numbers and using them to inform a decision? YIKES. Don’t love it. Not easy. Doesn’t come naturally. 

I'm saying all of this to give context to my point. I’m writing this from the perspective of a person who’s not adept at finances, who doesn’t ‘naturally’ (if there really is such a thing) understand them in a larger framework, but who is still trying to stay focused and rely on them to inform her decisions.

As much as we helper-types don’t want to admit it or pay attention to it, finances are really freaking important. Further still, profit is really freaking important. I’d even argue that profit is required to run a successful business. And, okay, before you get all pearl-clutchy and horrified, just bear with me. 

Profit Means Your Business Is Healthy

Profit is important, period. If we’re thinking about this from a Healthcare Hierarchy Needs (HHN) perspective, profit is stability. And what is stability, if not being able to support your personal lifestyle, but also to be able to confidently and consistently be of service to others? That’s what we’re in this game for, right? 

My point is this - we (not all of us, but lots of us) tend to have an adverse reaction to the idea that we need profit. But what we’re not understanding is that profit is what gives us stability and the ability to continue to be of service doing what we love. We can’t ignore or dismiss that.

When we look at profit from an HHN perspective, we see profit broken down into five distinct areas. We’re going to go through those in just a moment, but let’s take one second and do a quick refresher on the HHN. First, three levels. You remember now? Sales is our bottom level, profit is our second level, and order is our third level. There are five distinct focuses for each level, and those are assessed with a simple yes or no question. Any question you respond “no” to is a core need. But keep in mind that the most important need is your vital need, which is the absolute lowest question you responded “no” to.

Okay, profit questions. Now, remember, these are level two (profit) questions, so you’ll get core needs, but you can’t be certain they’re your vital needs until you assess level one (sales). 

Diagnosing Profit Issues

Read each question and take a few seconds to pause and think. Don’t just say “yes” without thinking. Do the research! You might be shocked at your responses when you take a little bit longer to respond.

• Debt Eradication
  Do you consistently remove debt from your practice rather than accumulate it?

• Margin Health
  Do you have healthy profit margins within each of your offerings and do you continually seek ways to improve them?

• Appointment Frequency
  Do your clients repeatedly schedule with you as recommended in their treatment plan?

• Profitable Leverage
  When debt is used, is it used to generate predictable, increased volume and profitability?

• Cash Reserves
  Does your practice have enough cash reserves to cover all expenses for three months or longer?

Do You Have An Appointment Frequency Issue?

My assumption is that most folks said, “yes,” when they got to the question about clients repeatedly scheduling with them. That’s one of those questions that seems like an obvious “yes.” That’s all well and good, but here’s my question back to you: How do you know?

How do you know that you have clients who are repeatedly scheduling with you as recommended in their treatment plan? Are you tracking that information? Are you going off of feeling like your practice is “full?” What are you basing this information on and/or how are you coming to your positive response? 

If you are a “yes” to appointment frequency and you have the data to back it up, kudos to you! That’s really fantastic and is a relieving piece of information. Being able to trust your practice has consistent appointments helps to provide stability. It’s a component to profit for a reason. It’s just one aspect, of course, which is why we have other questions embedded in this level, but it’s pretty damn important to have consistent appointments based on treatment recommendations. 

If you responded with “no” to the appointment frequency question, take heart. The purpose of doing this is to have a clear view of your practice and a specific area to focus on moving forward. By responding “no” (and assuming this was your vital need), we’re able to focus all of our efforts on changing this to a confident “yes.”

To do that, we can start to pinpoint what the problem is with appointment frequency, and here are some things to think about. 

• Do you have the data that gives you a negative response or do you just not know the answer? 
• If you have the data, is this practice-wide or clinician-specific?
• If you have the data, is this specific to certain types of issues or populations (i.e., kids, folks with anxiety) or is this across all clients?
• If you have the data, have you been specific about expectations with your team regarding frequency, directives with scheduling, and/or following up with clients who have dropped off?
• If you don’t have the data, in what way could you start to track the frequency of sessions?
• If you don’t have the data, which administrative staff could you delegate this project to (commencing tracking)?

Whether or not you have the information will give you different ways of moving forward with a solution. And it’s important to note that not having the information isn’t a terrible sin of some sort; it just means that you don’t yet have the information. If you do have the information, then you need to follow that up with some additional questions about why (see above). 

I also think it’s worth it to note that of the five questions in the profit level, only two are directly asking about specific numbers. And, I don’t know how you feel, but only one gives me a little bit of the heebie-jeebies (the one about margin health)! The others are asking questions about how money is spent, if it’s intentional, whether it’s used in helpful rather than detrimental ways. 

The focus on profit is about health. Again, it’s about stability. Profit is making sure that you, your team, the people you serve, and the larger community are able to benefit from your business. It’s not about exploiting or taking advantage of, it’s about health. You deserve that feeling of stability and your focus on profit will get you there.

Tara Vossenkemper, PhD, is the founder and owner of The Counseling Hub, an accidental group counseling practice in Columbia, Mo. Tara has since stepped into consulting in a more serious capacity, setting out to ensure that practice owners know both what they need to do and how to do it. Tara's favorite consulting-related topics center around tracking, culture, structure, and diagnosing core issues. 

Tara is known for her colorful language (#PuttingItNicely), love of The Office (#USVersion), neuroticism around dashboards (#FormulasAreLife), and hashtags (#AllDay). When she's not in the office, Tara can be found hanging out with her husband and two young sons, probably drinking a glass of red and wishing it was quiet enough to read.

Check out Tara’s professional bio and her practice, The Counseling Hub

Next Steps

• Preorder Fix This Next for Healthcare Providers on Amazon!
• Want to learn more about the Sales Level of your practice? Check out these blogs:
• Sales Is An Issue… Now What?
• Diagnosing Sales Issues
• Ready to start fixing, but aren’t sure how? Check out this post!
• Learn more about Kasey and how she helps
• Get in touch with us!