The #1 Thing You Can Do to Prevent Your Business from Failing

If your business isn't working the way you expected, it's not because you're bad at business. It's because no one ever taught you how it actually works.

We were trained to master algorithms in medicine, but when it comes to revenue teams and growth, we were never taught anything. We weren't even told to figure it out. We just assumed somehow we'd know. Like it would magically make sense.

But it doesn't.

The era of the Seven Figure Physician CEO is here. And it's not about working harder. It's about learning entrepreneurship as a system. The same way you mastered ACLs and pals, you can master the algorithm of building a profitable scalable business. That's why I recorded the Seven Figure Physician CEO audiobook. Whether you're building a medical or non medical business, and whether your goal is your first million, first 2 million, first 5 million, first 10 million, this is where the journey starts. There is no calvary coming to save us. We are the calvary.

So.

So go get your audiobook now. Www.entremd.com 7Figurebook. And let's rewrite the narrative for physicians starting today.

Hi, docs. Welcome to the Entre MD Podcast, where it's all about helping amazing physicians just like you. Embrace entrepreneurship so you can have the freedom to live life and practice medicine on your terms.

I'm your host, Dr. Una. Well, hello. Hello, my friend. Welcome back to another episode of the entremd podcast. Super bummed to be in your ears as always. And today we're going to be looking at something that is going to end up being a lot of fun, but it's going to sound a little grim in the beginning. Okay. All right. So I was looking at LinkedIn the other day and I saw this report that, you know, it really is a sign of things to come. And, you know, what's been going on that's being brought to light. And, you know, this is something that's really big and really systemic that is beyond the scope of this podcast for us to talk about how we're going to fix it. But there are lessons we can learn from it as far as how we need to be treating things differently in our businesses. So I read, you know, the headline said, you know, 30% of rural hospitals could close, and 30% seems bad. Right? Like, that sounds like a lot. So you hear the actual number, it's more than 600. So. So think about it. Over 600, 600 hospitals, you know, could close, and they say about 200 of them are at risk of immediate closure. Okay. And so think about the number of patients this represents, the number of communities this represents. Think about what this does to the access to care. And all of that is just insane. Okay? All right, but what I want to point out here is this. So here they say more than 600 rural hospitals, or about 30% of all rural medical centers, are at risk of closure. And this is the reason. Because they're operating at a loss. They're operating at a loss. Okay? They go on to say, and nearly half of those hospitals lack the financial reserves to cover more than two or three years of losses, meaning that the risk of closure is imminent. Okay? The situation is particularly dire in states like Connecticut, Hawaii, Kansas, and Vermont, where more than half of rural hospitals are struggling. Okay? So again, we can go into what we need to do to fix that. I will pause and say, you know, for you, listening for you, that's part of the Entre MD movement and all of that, this is part of the reason why we are, we, you and I, are going to do the work of evolving, growing our capacity, growing our capacity to build businesses, growing our capacity to speak, to be advocates and all of that. And it's all because this space, this healthcare space, needs us to rise to the occasion, okay? And the way we're going to come at it is gonna look very, very different. Some of you are gonna go on to build networks of primary care practices so that there is some access to some kind of care. Of course, it's not the same as hospitals. Some of us are gonna go on to really grow our brand and our capacity to speak and network and advocate so we can go. And some of us are going to do, like, what I'm doing, which is empower the physicians to be the change. Some of you are going to take on Big Pharma. Some of you are going to leverage tech. Like, the creativity, our creativity is required, right? Like, it's not going to look one way. It's going to look so many different ways. But we can't become, you know, the saviors, the calvary that we're supposed to be, right? If we don't rise to the occasion. So the option of staying the same just doesn't exist for us anymore. Like, it really, really doesn't. So if there is something you've thought about that, you know, you haven't embraced, you haven't started the process, you. You haven't taken yourself out of your comfort zone, I want to really challenge you to lean all into that today. And it doesn't mean, you know, taking on the big thing like right now is getting out of your comfort zone right now, right? And doing what is right in front of you so that you can go to the next stage. Right? So we do the pace of grace and all of that. Okay, so let's come back to what I would like us to zero in on today, which is let's look. I mean, think about hospitals. Think about whole medical centers. Think about the fact that they have more reserves than say, a private practice owner or a coach or anything. What, like, we're talking organizations, institutions, things like that, people who get federal funding or things like that. You know, for us, our funding is what we generate. And you know, our businesses are smaller for the most part, and things like that. And if they cannot survive operating at a loss, then we should not be trying to operate at a loss at all. Like, if this is the reason, if they identified one reason why over 600 hospitals are closing as operating as a loss, we should understand that we need to guard against that. And so today we're going to look at the number one thing you can do to prevent your business from failing. And it really, really is protecting profits. Is protecting profits. I understand. I'm a physician, of course, so I understand that we lead with service and we should lead with service. And leading with service is the only way to build a business that truly has impact, that helps people, that changes the world and all of those things that is, protects you from making decisions that look like small decisions, but they're small, bad decisions that are going to go on to snowball into something really awful. And you wonder, like, how did I become this person? Right? So we want to lead with peop. We want to lead with serving people. But please understand that part of serving people is staying profitable, right? So these hospitals, if nothing happens and they go on to close where they really say serving people. And I'm not, I'm. I'm extrapolating here, right? I'm not saying that they made a decision like, we're not going to pay attention to profit. I'm not saying that at all. But I'm. But I'm extrapolating here. If they close down, they're no longer serving. So the one of the most responsible things you can do as someone who wants to serve people is you protect your profits. You serve and earn. You protect your profits. Your profits. No margin, no mission. That, that's just the way it is. QED that's it. Okay, so, so how do I prevent that? I protect profit. Profit is not a cuss word. It Is not a swear word. It is a really good, nice word for entrepreneurs to, to learn to use and sit around. Okay. And I want to show you a few ways. A few ways to. To do that. There are many ways, but I want to show you a few. Okay, so the first one is know your numbers. Know what they are, right? Know what they are. I. I've said this many times on the podcast. I am the person who. I would break out in hives if I had to look at a profit and loss statement, to be very honest with you. When I started my private practice, I was like, I, you know, I run the practice and I get us busy. I do all of those things. When, when it's time for the meeting with the accountant, I'm like, I just have my husband deal with that because I'm like, I can't. I just know I'm not doing that right. And so, you know. But is that the best approach as an entrepreneur? Of course not. Right now, luckily for me, you know, my husband is an accountant as well, even though that's not what he does with his life now. But he understands numbers and all of those things. But I mean, like, we have to know what they are. We have to know how much we brought in. We have to know how much we spent. This is not something we should know at the end of the year, is something we should know month to month, worst case scenario and things like that, right? If you're somebody who breaks out in hives, that could be as simple as. Something as simple as hiring a bookkeeper and scheduling a meeting with your bookkeeper once a month and just put it on the calendar. It's just this frog. I eat it once a month. It is what it is. But you have to know what your numbers are. You can't make business decisions without numbers. You have to know what your numbers are. So that's number one. Number two is you must respect the math of business, okay? Income, expenses, profit, right? The math of business, as we traditionally talk about here, is high ticket, low volume. Low ticket, high volume, right? Understand that these are equations. You can't. You can't pick all the variables, right? So I will, I will tell you, for instance, if. If you decide I'm going to do something and I want to charge, I want to charge really low because I want everybody to be able to afford it, then you need to understand that you're going to need to. When you're done pricing it that way, you have to get everybody to sign up for it, right? And because you're going to need both. You're going to need the high volume for the low ticket, right? And if you're high ticket, then you can do low volume and that's fine. But then also, you know, because I would see people do things like, I'm going to, I think my people deserve all these services, like, great, how much are you going to charge for it, right? And they pick up a number and it's a random number. And I'm like, okay, but if you put this together, your cost of serving the client is more than what you're charging the client. And if that's the case, you don't have a business, right? And sometimes people take, you know, locum jobs to pay for that. Now don't misunderstand me. If you're taking a locum job because you started a business business and you're, you're at that ramp up phase and you need to bring in revenue, there's nothing that is actually honorable. And I say that because sometimes people feel ashamed that that means my business is not working because I took locum. I'm like, no, people take loans. This is you floating your own loan, right? Like that's with no interest is brilliant. It's a genius. But if you are taking a loan because your business model is not sustainable, then that doesn't make any sense, right? Like that needs to just stop asap. So you have to charge in such a way that you can make a profit, right? Because if you don't make a profit, you can't pay your team. You can be in business. Like you just have to shut it down. You have to go home, right? And so make sure the math is math, right? The math. The math has to work. Look at it. The math has to work. Remember the hospitals, they're all operating at a loss. If a hospital cannot survive operating at a loss, our businesses can't survive operating at a loss either. Okay? So that's number two. Number three. Number three is pay attention to your client base, right? Pay attention to your client base. How many clients do I have? If you have, so say your coach and you have, you know, contracts, how many clients would I have in six months if I get no new ones? Right? How many of them will still be clients in six months? How many will still be clients in, in a year? What would the revenue look like if I don't get any new? How many new do I need to get? Like, these are all things that we need to be asking ourselves and we need to be proactive about, right? The thing of my service is so good, so they'll just come. It doesn't work that way. Like, it doesn't work that way. The person who makes the best hamburgers doesn't sell more hamburgers than McDonald's. Right. And nothing for against McDonald's. I'm just trying to say we have to be proactive about that. Right? So you want to know. So, for instance, if you have a business and you look and you say, you know, I had this really great time last year where I welcomed 50 new clients, right? And now we're at the same time, the following year, you find out 50 new clients are about to leave my, you know, leave my business. The question is, okay, with what you have left, is that going to be enough to sustain your business? How many new clients do you need to get all those kind of things? You see what I'm saying? Like, pay attention to that. That matters, right? That matters. You're in private practice. You know the times that are busier, you know, the times that are slower, you want, you want to pay attention to that. Okay, so these times that are slower, is that good? Do we just take a break and breathe and all of that stuff, or will it be damaging because we will not be able to match our expenses and create a profit enough to, you know, do whatever needs to be done. Right? You want to be thinking that way. So if I need to respond, I can respond, right? So we want to know this. You want to. We want to pay attention to our client base. The four theme is, and this I see time and time and time and time again. Okay? This is something I learned from my mentors and I'm grateful I did when I was pretty young in the game. And it's be very clear on your growth producing revenue, your growth producing, quote, unquote expense, which is those are investments and your maintenance expenses. Okay? So I bring this up because there is going to come a time in your business when you're like, oh, you know, our expenses have grown and we need to cut expenses. Okay, you can cut expenses that shouldn't be there anyway, right? How many of you, you know, you've gone to your QuickBooks and you're like, wait, I'm still paying for that. Like, I stopped using it six months ago. But there's something just need to go away. There's some that are maintenance that maybe you could consolidate. So things like, you know, like your software subscriptions and things like you're like, okay, I have, you know, five things here and they overlap and I can consolidate and Just go to these two. It could be contractors you've paid for, but you brought somebody that's a full time staff. You're like, what this person does, I can put on this person's plate. And you know, like there are things like that, okay. But then there's your growth producing revenue, which you don't trim. Okay? You don't trim those. Okay, you don't trim those. Now I'll give you three examples, okay? These are things that when you trim them, when you cut them, it's like giving yourself an amputation. Okay? So number one is what? You know, advertising, like marketing, whatever you do for marketing, advertising, all of those things. Because that's the way you bring money into the business, right? Now, could you streamline your processes and all of those things? Yes. Do you get rid of them as a line item? No. No, you don't, you don't, you don't do that, right? Because even though it will hurt to spend that when you're like, all my expenses, I'm trying to take care of my expenses. So you have, you have your revenue and you have your expenses and what you're left off with is profit. You are going to have expenses to run your business, period. It is the cost of doing business. But it should be such that what you're spending is creating the top line, which is your revenue, right? And the difference there creates your profit. And so you don't want to cut off the things that directly create revenue, right? Okay, so, so the first is your marketing, right? So marketing ads, like all those things you do, the cost of acquiring new clients or patients. So that's number one. Number two is your team. Number two is your team. Especially if you, you know, you. One of the things that we talk about a lot on the podcast and in the entremd business school is your profitable team, right? You're a profitable team. So you train your team, you set the structure and all of that in such a way that they are directly, for the most part, directly creating revenue, right? We've done many of those. You can listen to the podcast episode I did, how to. How to make your. Your payroll an investment instead of an exp. Okay, so if it's, if that's the case, they are revenue generators, right? Your team, they're revenue generators. And so you don't cut off your team because that's how you create revenue, right? So your marketing creates revenue, your team creates revenue. Right? Now, does that mean there's never a place for de hiring? Of course there is. If you have A team member, I mean they're, they're. There's a reason. So I'm not saying don't dehire, I'm saying don't get rid of your profitable team as a way of cutting down exp expenses. Your marketing is an investment even though on your accounting software is going to go on as an expense. Your team is an investment even though your accounting software is going to go as an expense. And the third thing is your coaching. Your coaching. And you know, this is the one that sometimes is really subtle, but this is the deal. We are the way we are and the way we are is responsible for the way the way our businesses are. And if we want to up level our businesses, then we have to uplevel us. If we want to up level us. There's training, coaching, all those things that go with that, right? That, that's just the way it works. I started this process in 2017, so before that, you know, I was reading the books, I was doing all of those things, but really realizing the power of putting myself in a container with a leader or a mentor who has done what I'm trying to do and has done it for others. And I'm in with those people, right? And so I have the vertical learning, my mentor to me at the horizontal learning that I'm doing with my classmates. And it has created quantum leap after quantum leap after quantum leap. So much so that when I create my budget for the year and I'm elevating my budget, right, like elevating my marketing, elevating my team, I'm elevating my coaching as well. Why? Because I am the rate limiting step. I am the center of gravity. I am, it's me. And so the worst thing I can do, especially in this, in, you know, in this place where like, oh, you know, we don't know how this is working. We need to cut some things that doesn't get cut, right? Because I need to be able to navigate this, right? If it so say it's a challenge. There's a recession, there's hyperinflation, there's a pandemic. In those times, if there's anything I need more than at any other time, I need to be in a community where people are thriving in spite of it. I need to be, be in, in relationships with a mentor who has been through these cycles multiple times. And it's like, don't worry. This is how we go through things like this, right? This is how we navigate things like this. That is not the time. It is not an Expense, an expense to cut, right? Like when I see people that I'm like, no, that's not the way this works. Don't do that. Right, but anywho, these are all these three things I described are things that are growth, they're growth producing expenses, they're investments. You don't touch them. And so I had a doc in the on trendy business school and she had a meeting with her husband and her accountant. And so he was going through the line items and all this stuff and he gets to on trendy business school, he's like, what is this? And he, and, and he said, right? He said this is a non negotiable business investment. And I told her, tell him he's the mvp. Like in my book, he could do no wrong. He's the absolute best ever. But that's the way you look at it. It's like this is a non negotiable business investment, right? That, that's, that's the way that works. And it's funny, a number I think, I think I've had, you know, two or three other husbands say that who are not in the school, but their wives are in the school. But, but that's the, that's the way you look at those things, right? Because I have to, I have to become better. I have to become better. That's, that's just the way that works. And if anything, over the years, every year my investment in that area has grown rather than reduced because I'm trying to grow, I'm trying to go somewhere, I'm trying to explore all of my potential. Right? Okay. So let me take us back, okay? What's the deal here? If hospitals cannot survive operating on a loss, neither can we, right? And so, you know, we want, we want to know our numbers. We want to respect the mass of business. We want to pay attention to our client base. We also want to be clear on the growth producing expenses. So we don't cut those like when, when we're like, okay, let's you know, take care of business. We're not cutting those. That's an amputation, okay? Very different from cutting your hair or cutting your nails. This is cutting a limb limp. We don't cut limbs, okay? Now so I want you, having listened to this, I want you to make a quality decision that you're going to run a profitable business, right? And you may be hearing you're already running a multi seven figure business. This is equally applicable because a lot of times when we start doing well financially and start bringing in the Revenue. There is this place for laziness and you don't. We don't have to be as diligent and thorough and stuff like that because we have more wiggle room. That's what we think, right? But I want you to go back, I want you to schedule those dates to look at your profit and loss. I want you to kind of see where you are, see how we're doing as far as profitability. Look at the pricing of, you know, what it is you do. Are you pricing properly? Take a look at my high, you know, high ticket, low volume. Low, low ticket, high volume. What am I doing with that? And all of those things. Take a look at your client base. Like, how are we doing here? What are the projections here? Right? And then. And take a look, when I start feeling the pinch, am I messing with my growth, producing expenses, AKA investments, right? Like, if I were to clean up my, you know, expenses, what needs to go, right? What needs to not go? So those are things that you want to take a look at. But I tell the doctors in the business school this every time when we have a live session. And I'm like, listen, we are the people who are building the most innovative, most impactful and most profitable businesses inside and outside of healthcare. And I want, I want you to, you know, think about that for a moment. I want you to imagine that for yourself where you're building a business that's it's innovative, you know, like, it's exactly what the healthcare space needs right now. And it's, you know, it's helping a lot of people and it's, and it's, and it's profitable, and it's profitable. And when you see other businesses close, right? Because that's the statistics. 85% will fail in the first five years and things like that, you can, you can look and you, you can be grateful. Like, I'm not a statistic, and I'm not going to be a statistic because I know what to do. I know how to think about this. I know how to approach that, right? Like that can 1000% be your reality? So rooting for you always. If you think about 600 hospitals with all the resources they have and think about what's happening to smaller businesses. So one of the best things you can do to the doctors in your life, especially the ones you know who are entrepreneurs, is share this episode with them. You never tell. You can be totally saving a business and based on that, saving a whole community and things like this. So share it with the doctors in your life and I'll see you on the next episode of the OnTream D podcast.

Hey, if you love listening to the OnTremD podcast, I want to invite you to join Entre MD On Demand. It is my signature subscription program that gives you access to a library of business courses designed to help you you do one thing as a physician entrepreneur and that is to thrive. Just head out to entrend.com ondemand and I love to have you join us.

See you on the inside.