Get Yourself Off The Monthly Income Roller Coaster

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Hey everybody, Matt Gallogly here with the Practice Profit System, and today I'm going to talk to you about you getting off the revenue roller coaster. What is the revenue roller coaster and how do you get off it? Well, that's what we're going to discuss today in our hot, tight, short little podcast on the Practice Profit System. All right, so let's see if this makes any sense to you. Let's see if you've experienced any of this in the past. So you're cruising along, you're having a decent month, Things are going well, something happens and your revenue starts to go like this. You have a good day and it goes up. If you're watching this in the video, you're seeing my hands go up and down. Well, what happens is you have this up and down and up and down and up and down. You have these peaks and valleys of your revenue. And the reason why that happens, quite frankly, is you have what's called a transactional business. And what you really want to have is you want to have what's called a closed loop business. All right, so what's the difference between a transactional business and a closed-loop business? Well, a transactional business is exactly that. You are dependent upon the transactions happening for you to be able to make your money. That means that patient has to come in, they have to buy that day, or they buy down the line. But basically, you are dependent on how well things perform that day or that month, and there is a tremendous amount of lack of control with that. It's very, very hard to really run a predictable business because you're not going to know what your steady income is going to be like. And quite frankly, it'll drive you absolutely nuts. I know because it drove me nuts as well. So when we were— when we had our clinics, and I've been involved in what we call a monthly recurring revenue model in a lot of my different businesses over the last 25 years, but it's exactly that. What you want to do to get yourself off the income roller coaster is, yeah, you want to have great lead gen. Yes, you want to have a great nurture campaign. Yes, you want to be able to position position yourself as an authority, as we heard from Rod Kostberg. And yeah, you want to have great conversion where you're converting 50% of your patients into treatment on their first visit, and they've— they're spending, you know, they've got high transaction values. But the real underlying foundation to the whole thing that makes you sleep better at night is to have a monthly recurring revenue that generates enough money to cover all of your fixed expenses, including advertising and payroll. So that's advertising, rent, payroll, utilities. In some cases, it'll also cover your fluctuating expenses with regards to medical supplies and things like that. But for the most part, if we can just cover your fixed monthly expenses, your advertising, your payroll, your rent, your utilities, things like that, then you're going to sleep a lot better at night. Now, what is What is monthly recurring revenue? Well, here's how I want you to think of it. I want you to think of it like it is your gym membership. Okay? So, I use this as an example all the time. I live about 4 blocks away from a gym. It's a beautiful gym. It's a Lifetime Fitness. I'm also a member of a gym 20 minutes away where we go to do CrossFit. And I actually drive to the one that's 20 minutes away and go to the one that's 4 blocks away, but I pay them each and every single month. They have my credit card on file. They automatically ding my credit card each and every single month. I'm a member of a golf club, not a very expensive fancy one, but they ding my credit card for access each and every single month. There's all different kinds. I do the massage thing. I do a massage hand and stone type thing. There's all these different things that you can do that automatically have your credit card on file and they charge you each and every single month whether you utilize this service or not. Okay? So in your business, you want to create something like that That gives you a guaranteed monthly recurring revenue. Now, how— what is that? What are some of the things that actually fit into a good monthly recurring revenue model? And why do you want to do it besides just the fact that you're going to have a monthly recurring revenue and you're going to sleep better at night? Well, let's cover that second one first. The reason why you want to do this is, yes, you're going to get off the revenue roller coaster. In our practices alone, each clinic generated at least $25,000 a month in monthly recurring revenue charges. Now, that was not enough, by the way, to cover my advertising and my rent and my payroll, but it covered about 40% of it. Okay? And we had a slightly different model and we were building more and more of that.

Right.

But for a lot of my clients, they generate— they work on generating 50% to 60% of their monthly revenue or annual revenue in this type of thing. So, why is it? Well, first and foremost, you're going to get a better valuation should you decide to sell. If you have a monthly recurring revenue stream, that monthly recurring revenue stream gets a valuation usually of 8 to 10x of what that generates annually in the valuation of a business. So if you ever look to sell or bring on a partner or something like that, if you have a monthly recurring revenue stream, you're going to get a better valuation than you would— that's going to be a pullaway where you'll be able to get a better valuation on that. Second, the most obvious, you're going to have a steady, reliable, and predictable level of monthly income that's going to come into your practice each and every single month. In fact, you'll be able to go and look, oh, well, okay, on the 15th, we generate X amount of dollars. On the 18th, we know that we're going to generate this. And you can predict what your cash flows are going to be. Next, you very well could get better rates for borrowing money. This is a revenue stream that is predictable that you can utilize to get better rates in many cases. So again, there's a lot of value to this, which is why I believe this is one of the most important things that you can develop. Now, granted, you have to be in our stairway system. It's the 4th step. It's above our beachhead, our educate and excite, and our conversion. The reason why is you have to have those 3 tiers running in order for you to get enough people into monthly recurring revenue. So it's really, really important that you get— you build those first 3 tiers, but then we're going to have this top, this second, this next tier. So what are some things that you can do to sell for monthly recurring revenue? Well, I'll tell you what we did in our clinic. We did 2 things. One, we took our annual plans and we divided them up into 4 or 6 months. They paid about a 50% fee down. And then what we did is we could divide it out between 4 and 6 months. That's okay. That's not my favorite way to do it, but it is one way. You have to make sure that you're collecting at least 50% upfront in order for that to work. Okay, you can't be just gathering 10%, and this is on procedures. Okay. So sometimes we would do that. There's a bunch of different varying factors into that that the podcast does not allow me to go into because of time. I've actually done entire teachings on this that take a couple hours and programs and things like that. But just, that's the first one. The second one is what we call maintenance programs. Now, this is by far one of the better ones. Let's say you're in the stem cell or PRP or regenerative space, or, you know, you're doing like bladder leakage or whatever. You're doing ED and you know that there's going to be a timeframe, like with the PRP that we know that it lasts X amount of months. Well, what we also know is that if we do something quarterly or something like that, it continues to build upon itself. So that's an example. We— I have a number of clients that what they do is they'll do 2 to 3 PRPs in the beginning for various things, whatever that is, erectile dysfunction, vaginal dryness, like bladder leakage, or maybe it's joint pain or whatever it is. But then what they What they do is they put them into a maintenance program where they're getting a bunch of things each and every single month, and it's like they're prepaying for that future service. Okay? So for example, they might say, all right, after 6 months, then you're going to come in every other— you're going to come in every quarter and we're going to do another PRP as what we call kind of a refresh or something like that. So that's another thing you can do. Some people will utilize supplementation. Supplements developed by third parties that you're getting $10 to $20 from is not necessarily my favorite. I prefer to see you create your own supplement program. That's a bit of an advanced strategy. A lot of times you can go— there's a lot of companies out there that you can go direct to and you can build out your own supplement program and put your own private label on it. You can make more money than what you're actually making. Now, IVs are huge. IV programs are fantastic. They're a great form of monthly recurring revenue. And it works. This works just like when you join, say you join the massage place, you know, you get one free one every, every month. And, you know, if it's unused, you use it, or maybe you carry it over, and then you get a discount of 20% or 30% on additional ones. That's one way you can do it. HRT is another one, hormone replacement therapy. Even they're getting it done once a quarter, or they are getting it done every 4 to 5 months because As a guy, for Dr. Barber, I pay her a monthly fee, and then on top of that, I pay for my medications. Okay, so there's all kinds of things that you can create. It really— it's however you want to structure it to be able to create your own form of monthly recurring revenue. And if you really think about this, if you get 100 people paying you $200 a month, that's $20 grand. Okay, now you're gonna— people drop off and they're gonna rejoin and all that stuff, but you know what? What kind of difference would it make for you right now to have $20 grand guaranteed coming in each and every single month? A lot of my businesses now that I'm involved in, we structure it that 75% to 80% of the revenue comes in the form of monthly recurring revenue because it evens out all the stress. Okay, so those are some of the things that you can do, right? You can structure this in a way so that you're never really going to have to worry about what's going to be happening. Now, Here are some of the key things that I want you to understand, and I want you to know, and I'm going to share some stories with you, is remember, this monthly recurring revenue model is your key to survival. When you have this set amount of monthly recurring revenue coming into your practice each and every single month, you are going to sleep better at night. I promise you. And when you're sleeping better at night and you're not stressed out, you're going to make more much better long-term decisions. You aren't going to be looking at that patient or that day going, oh my God, we've got 5 new patients on the list today, we have to convert 4 of them, I've got to convert 4 of them today in order for me to make payroll. Stop living like this, and it just makes life a lot easier. I can, I can vouch for this 100%. Okay, so let's, let's talk about a couple of my clients that are doing a monthly recurring revenue model. And their pricing, by the way, for some of my clients, it's anywhere between $99 a month. I have people that charge up to $1,500. Yes, you heard me, $1,500. That's not a mistake. $1,500 per month on monthly recurring revenue models. Now you might be wondering, what are they including in that? Everything and the kitchen sink, right? There's all kinds of different things that you can do. One of my favorite stories, though, is a client of mine who has 2 locations. And she generates in excess of 65% of her total company revenue each and every single month. 65% comes from monthly recurring revenue. Now, when I first started working with her, I won't mention her name, but she's— I will let you know that she's on the East Coast. That's all I can tell you. She was generating about $65,000 a month in monthly recurring revenue between 2 locations. In the span of 4 months, by making a couple of adjustments, she took that number up to over $110,000 per month. My recent conversation with her post-COVID is she is generating— get this— $200,000 a month, in excess of $200,000 per month between her 2 clinics in monthly recurring revenue. That one idea completely shifted and changed the way she thought about her business. Her sole purpose is to get people to sign up for monthly plans or annual plans that are billed out monthly. And like I said, she charges, she charges as low as $97 all the way up to, I believe, $1,500 is her highest monthly package. And it's completely changed the way she looks at her practice. When I Saw her at an event post-COVID. She could not believe how much better her business is doing. And she goes, that monthly recurring revenue is the core for everything else that she does. Those are her best customers. They're the first ones to be an early adopter anytime she adds something new in. If she adds in hair restoration, if she adds in light bladder leakage treatment, vaginal dryness treatment, whatever it is that she adds back in. In fact, she just— I saw that she just started adding in— she hired an orthopedic person just to handle doing joint pain because she's so busy, she doesn't have time. And so they're just working their existing list. That's all they're doing is just targeting their existing membership. Okay, the final thought that I want to give you on this before we end here, it's exactly that. You heard me say this word, and that is membership. This is a membership, people.

If you are—

if you have never been a member of a club Or a private— like, I'm not talking about like Anytime Fitness. That's not what I'm talking about. I'm talking about like a nice club. There are benefits to that. There are additional discounts that you get. People, they know you, they know your name. To really make something like this hum, in addition to this, a top layer on that is you create this sense of they are in a separate group than everybody else. They get to— They get to move to the front of the line for, say, an appointment. Or maybe they get direct access line to you because they're paying you over $1,000 a month that they can text you questions about their medical stuff. Just let your imagination go wild. Think about what would you want? What would you want when it comes to having some kind of membership program if you were paying a doctor monthly or your doctor monthly? What is it that you would want access to that you would pay dearly for? Okay? And there's lots of things. In fact, there's probably a number of things that you wouldn't pay for that your clients will. And I suggest and I recommend that you go out and build that and develop that. So that's what we have when it comes about getting yourself off of the monthly recurring revenue roller coaster, the monthly income roller coaster. We want you to create this type of business that generates a monthly recurring revenue for you each and every single month, getting you off the roller coaster, reducing your stress, and most importantly, covering the most important things in life. like payroll, including what you pay yourself, um, payroll, rent, and advertising. There you go. Thank you so much for listening to the Practice Profit System. I'm your host, Matthew Collogli. Uh, please feel free to share this with your friends, post a review. If you have suggestions, email us. We'd love to hear your thoughts. Um, and as always, keep pushing forward. All right, let's get you paid what you richly deserve to make as a physician or practice owner, and I look forward to talking to you Next week on the Practice Profit System. Have a great day, everybody. Thanks.

Thank you so much for listening. If you liked this episode, take a moment and share it with your fellow medical professionals, or post a positive comment and rate it on wherever you just listened. Now don't forget, you can get a copy of my book, The Anatomy of a 7-Figure Medical Practice, for free. Just pay $7.95 in shipping and handling, plus you'll get over 1,100 $197 in free bonus material. Simply go to srpmedicalmarketing.com/book. That's srpmedicalmarketing.com/book. Thank you so much, and we'll see you next week.

Thank you.