Curt and Katie interview Carla Titus, Fractional CFO about what therapists get wrong when budgeting for their private practice. We explore financial strategies to maintain a viable business as well as how you can grow your business responsibly. We talk about making sure to pay yourself first, then set up a rainy day fund, and follow that with saving additional extra funds for hiring or new services before you scale.
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An Interview with Carla Titus, Founder and CEO of Wealth and Worth Within
Carla Titus, Founder/CEO of Wealth & Worth Within, is a fractional CFO who provides financial consulting and advisory services to business owners. Finance expert with over 15 years of combined corporate financial planning, analysis, strategy, and established businesses consulting experience. Her priorities for their clients range from growing profits, having cash in the bank, and paying themselves well so they can build personal wealth.
In this podcast episode, we explore what therapists need to know about financial planning for their business
Curt and Katie talk with Carla Titus about financially planning for your business. We look at common mistakes as well as how you can grow while still paying yourself.
What does financial planning look like for a therapy practice?
Managing cash flow
Understanding the Return on Investment for new ventures
Running the numbers on costs and revenue, the gross margin
Calculating the profitability of adding clinicians or trying new programs
Working to get a total profit margin of 10-20%
Creating a reserve fund and saving profit to reinvest, when needed
Common Mistakes therapists make when financially planning for their practice
Not paying attention to their expenses
Not tracking cash flow (i.e., not getting billables timely and having expenses that are due before you have the money on hand)
Therapists often avoid looking at numbers
Scaling before you have another reserve of money to fund it (2-3 payroll runs for a new employee for example)
What should therapists do before hiring a clinician into their private practice?
Save money from profit to reinvest into the business
Making sure you have your rainy-day fund prior to adding additional funds to float a new person as they get up to speed
Make sure you’re able to pay yourself while bringing on the new hire
Order of priority: pay yourself, save for a rainy-day, then save for scaling
How can a therapist manage their “money,” even when they are just starting out?
If you’re taking out a business loan or grant, have a plan for how you’re going to use that money
Focus on revenue generating ideas to be able to get money and/or pay back loans
Expenses should also have a high return on investment for the business longevity and the bottom line
Try to avoid shiny object syndrome
Know the expectation of the outcome for the money you are spending (for example on marketing)
Evaluate outcomes and course correct when needed
Beware the sunk cost fallacy
Who we are:
Curt Widhalm, LMFT
www.curtwidhalm.com
Katie Vernoy, LMFT
www.katievernoy.com
A Quick Note:
Our opinions are our own. We are only speaking for ourselves - except when we speak for each other, or over each other. We’re working on it.
Our guests are also only speaking for themselves and have their own opinions. We aren’t trying to take their voice, and no one speaks for us either. Mostly because they don’t want to, but hey.