The same PA owner who told me to double my expenses and halve my income also said he didn’t make a penny of profit until his third year.
It would be truly incredible to make a profit the first year. The reason is, the upstart cost is through the roof while the income is very slowly to come it, at least at first. Honestly, our cash flow has only been regular starting at month 10 of operations.
So we had upstart cost such as $9,000 to have our signage up to code (for our building) $4,000 for legal incorporation fees. We spent almost $20,000 on fees to credential with insurance companies. Then of course there’s malpractice, business insurance, city, state and federal taxes that must be paid and that doesn’t even touch on hardware such as furniture. So roughly, I’ve brought in this first year about $300,000 (on my efforts alone) but the cost of running the business month to month, plus the $90,000 upstart costs has been about $385,000.
But the good news is that all six people on the payroll have been paid on time, all our vendors are paid up and we have a steady flow of cash. So, there will be no profit until the debt is paid, which will take a couple more years.
Those PAs who think that this should be a no-brainer and the money will roll in, really don’t understand what they are getting into. The key for us, as far as keeping a good cash flow, is being anal about the schedule. While we have been booked out for weeks, no-shows, appointment errors and etc. was leaving about 20% of our time each day unscheduled. Now, we have a “minute man” waiting list. As soon as a patient calls in to say they can’t make it, we immediately fill the schedule for that day. Now, including work-ins, we keep the schedule about 125% full.
I had my personal physical with my PCP yesterday. He asked me out it was going. He gives me 10 .5 MG Atihttp://www.acousticalsolutions.com/audioseal-absorber-blanketvan a year . . . this past year I had to call and ask for an early refill. He asked me if I need to increase the amount to 20/year. “Nope,” I said. “I think that life is getting back to normal . . . after one of the most stressful ones of my life.”
Year in Review . . . CPA Report