How Small Changes Can Really Boost Your Bottom Line
Paul joins us this week from Las Vegas, where he is speaking at the TherapyCon conference. Today's episode is all about how simple, seemingly small changes can add up to increase bottom-line profitability in a big way.
Full transcript
Generated from the episode audio and lightly edited for readability.
Good afternoon and welcome to another episode of the Martin Rehab M&A advisory. I am speaking to you today live from Las Vegas. I am here at the TherapyCon conference which is a conference put on by Rainree EMR and have to say that couple things came to me in a talk that I gave today called maximizing your value in turbulent economic times and a wealth-b buildinging strategy for your physical therapy business and I think as you look at that on the surface that seems to be just an undaunting task.
Especially if you're starting with very low levels of profitability because as we know it's the bottom line cash flow that drives the value of your business and I think when I started and I said there would be six steps to getting to 20% profitability the eyes were glassy looking at me like wow six steps that's a lot and I think as I started to break down each step and the six steps are first mitigating economic uncertainties. So making sure those P&Ls are nice and clean, your charge capture, which is a biggie.
I mean that can have an enormous impact on your bottom line by increasing cash per visit. Next one is patient retention. That's visits per new patient just by getting one more visit for every new patient. And there's lots of unique things to do there to work on that. Productivity, one of the, you know, it's like a bad word in physical therapy right now. But productivity is key. Referral generation. Well, sometimes referral generation is just a matter of fixing your scheduling and not having a long wait list.
20 24 to 48 hour wait list will bring in all those referrals waiting. And then recruitment and retention. It's a lot. And each one of those had multiple steps. But when you think about it like this, the really good baseball teams typically do not win by a couple of their big hitters just hitting home runs. They win by lots and lots of singles. And what I was able to show the audience today was in each one of these things, if we can just make a little change in your again economic uncertainty, in your charge capture, in your productivity, in your ability to bring new patients in the door, in your recruiting and int and retention, a lot of little singles will result in enormous gains in your bottom line and your value.
You know, one of the big things that I'm seeing in talking to people at this conference is really an air of positivity and what we saw in 2023 when I said that a big reason why we saw many less transactions in 2023 than we did in 21 and 22 was the performance of the potential sellers. That's, you know, people that were at my conference and at my talk today. It really rang home for them because most of them raised their hand and I said, 'If 2023 was your worst year in the last four years, raise your hand.
And I mean, just about everybody. You could see, but 2024, a lot of the conversations that I had after questions that we had are showing that 2024 definitely coming back and starting to peak again. Certainly on the M&A side, there are a number of acquirers here and they all seem hungry to do acquisitions in 2024. So, this being my first Therapy Con conference, I will say I'm very impressed with the relaxed format that the Rainree folks are able to put on. They're all down there in their in their light purple t-shirts and some of them have sport jackets on over the but it just brings an air of lightness to this.
But a lot of great information and it seems to have prompted folks to be very open with strategies as well as their secrets to success. You see a lot of interaction between physical therapy business owners and that's what I love most about this industry and most about coming to these conferences. Now, if you were not able to attend TherapyCon, or you're not a Rain Tree user, but you'd like to see my session, we will definitely, I really believe that this session was packed with lots of great ideas to drive that 20% margin in your business, which will result for you if you choose to find the right partner with the best culture, the best structure, the best price match in the market today.
As well as build your potential wealth building plan for the future. Not everybody wants to sell their business. Not everybody wants to partner with a larger company. It still doesn't mean that we don't want to build value in our businesses so that we have options and choices. And that was a big part of the talk that I did today. So again, if you haven't had an opportunity to be here, I'd be happy to send you a copy of the presentation or I'd be happy to send you the PowerPoint and you could you could take a look at that and we could have a conversation about how you can drive a 20% margin in your business.
That means 20% profitability. And again, I gave the six steps today and there's a lot of details on those, but it's something that you can absolutely do today, but you need to start today. We have the beautiful background here of Las Vegas. Great place for a conference and looking forward to the rooftop party tonight to meet some physical therapy business owners. And I hope all of you have a great rest of your Friday and a great weekend. Thanks. Have a great day.
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