The Modern Therapist's Survival Guide with Curt Widhalm and Katie Vernoy Making Every Therapy Practice Profitable: An Interview with Julie Herres
Making Every Therapy Practice Profitable: An Interview with Julie Herres
Curt and Katie interview Julie Herres of GreenOak Accounting about her new book, Profit First for Therapists. We explore what profit first is, the unique challenges that therapist face in implementing profit first, the core principles of profit first, mistakes therapists make in implementation, and the benefits of using this bookkeeping model.
Transcripts for this episode will be available at mtsgpodcast.com!
In this podcast episode, we talk about the profit first method specific to therapy practices
Therapists often struggle with their money, oftentimes forgetting to pull out profit or paying themselves. One accounting system that helps therapists to better manage their money is Profit First. Our friend, Julie Herres, has written a book about this system with specific information for how this accounting system applies to therapists.
What is Profit First?
· Focusing on profit as a given number in your accounting
· You identify the profit you need FIRST to determine what you can spend on your expenses
· An accounting system created by Mike Michalowicz
What are the unique challenges that therapists face in implementing profit first?
· Therapist guilt and emotional processes that get in the way of therapists mastering the money in their businesses
· The stages of change that go into realigning your budget to stabilize your finances in your business and personal life
The core principles of Profit First
· “Use a smaller plate” so you spend less money. You add bank accounts, so each is smaller to divide out your profit, expenses, pay, and taxes.
· “Serve sequentially” – to the different bank accounts
· “Remove temptation” – the idea is that you won’t use money that is in a labeled account for something else.
· “Enforce a rhythm” – moving money consistently, to help see the ebb and flow of money in the business.
Mistakes therapists often make in implementing Profit First
· Not changing spending habits
· Changing too much too quickly
· Not creating separate bank accounts (this is a key to success)
The benefits of using Profit First in your therapy practice
· Understanding where your money is going
· Planning for scaling into a group practice
· Looking at finances in a structured and consistent way
· Understanding the percentages for all the money in the business
· Making sure that you are paying yourself and taking profit in your business
Thoughts about group practices
· The different phases of growth
· The benefits of using a more structured system to weather the emotional challenges of growth in your business
· Reverse engineering your practice to support your life
Resources for Modern Therapists mentioned in this Podcast Episode:
We’ve pulled together resources mentioned in this episode and put together some handy-dandy links. Please note that some of the links below may be affiliate links, so if you purchase after clicking below, we may get a little bit of cash in our pockets. We thank you in advance!
The Book: Profit First for Therapists by Julie Herres
https://www.profitfirstfortherapists.com/mtsg
Facebook Group: Profit First for Therapists
Relevant Episodes of MTSG Podcast:
Don’t Take Tax Advice From Therapists: An interview with Julie Herres
Financial Therapy: An interview with Lindsay Bryan-Podvin
Stay in Touch with Curt, Katie, and the whole Therapy Reimagined #TherapyMovement:
Modern Therapist’s Survival Guide Creative Credits:
Voice Over by DW McCann https://www.facebook.com/McCannDW/
Music by Crystal Grooms Mangano https://groomsymusic.com/