Timestamps for this episode:

Linzy Bonham 00:00

What I’m hearing is when you look at your numbers, the numbers work. But I’m also hearing that $8,000 to $10,000 has broken things.

Lauren Worley 00:08

That’s not numbers working.

Linzy Bonham 00:09

With a practice of your size, we want a lot more stability and durability than $8,000 to $10,000. So I think that the insurance is a bit of a distraction to a deeper problem here.

Linzy Bonham 00:21

Probably. Because the $8,000 to $10,000 is not actually going to fix this larger issue with your machine. Your machine needs some more tweaking.

Linzy Bonham 00:29

It does.

Lauren Worley 00:31

Oh, but where?

Linzy Bonham 00:39

Welcome to Money Skills for Therapists, the podcast that helps therapists and health practitioners in private practice go from money confusion and shame to calm, clarity, and confidence with their finances.

Linzy Bonham 00:49

If you’ve ever felt overwhelmed by numbers or avoided looking at your business money, you’re in the right place. I’m Linzy Bonham, therapist turned money coach and creator of Money Skills for Therapists. Before we jump in, I want to remind you of something really important.

Linzy Bonham 01:02

Most of us highly skilled and competent therapists and health practitioners were never taught about money. Not in grad school, not in supervision, not anywhere. And yet, here we are, running businesses that need to take care of us while we’re busy taking care of others.

Linzy Bonham 01:17

It is a lot of pressure. So if part of you feels anxious about money, avoidant, or like a bit of a hot mess financially, I want you to know that you are not alone, and I am here to help.

Linzy Bonham 01:27

Through my workshops each month, I teach practical financial skills to help you feel more grounded, calm, and confident with your private practice money. You can see what’s coming up and save your spot to join live or register for the replay at moneyskillsfortherapists.com/workshops.

Linzy Bonham 01:41

Let’s get started. Hello and welcome back to the podcast. Today’s episode is a coaching conversation with Lauren Worley. Lauren is a group practice owner in Los Angeles. She is a graduate of Money Skills for Group Practice Owners. And today we get into the challenges that Lauren is experiencing around insurance companies not paying, around things being tight financially, the money not really being there, even though it seems like it should be.

Linzy Bonham 02:09

And in this conversation today with Lauren, what starts to become apparent fairly quickly, you’ll find the pivot point in the conversation, is that what initially seems like the financial problem in her practice is not the real financial problem. And this can so often be the case in business in general, but definitely in group practice where there’s a lot of complexity in the numbers that sometimes we focus on something and think that it’s the reason that the numbers are not how we want them to be.

Linzy Bonham 02:31

But when we can actually see our numbers and understand them and do the math, we realize that it’s actually something else that needs to be changed and that will make all the difference to the financial health of our group practice. Here is my conversation with Lauren Worley.

Linzy Bonham 02:53

So Lauren, welcome to the podcast.

Lauren Worley 02:55

Thank you for having me. I am very excited to record this conversation today. I feel like the podcast universe has made this a little tricky for us. The first time we went to record, I went into a room that’s not my normal room and it was hella echoey and we were like, we can’t, we can’t.

Lauren Worley 03:10

Do this. So we went away. We lived our lives. Now we’re regrouping like a month later, which also means maybe things have changed and maybe they haven’t with what you wanted to dig into. I think there’s still the same stuff to dig into. It’s amazing how durable these kinds of challenges could be.

Linzy Bonham 03:26

Okay. So Lauren, we have worked together in, did you do both programs?

Lauren Worley 03:31

I did.

Linzy Bonham 03:32

Yeah.

Lauren Worley 03:32

But I was already a group practice when I did money skills for therapists.

Linzy Bonham 03:35

Yes.

Lauren Worley 03:36

And so I kept asking you questions and you’re like, hmm, maybe you should be in money skills for group practice owners. And yeah.

Linzy Bonham 03:41

Mm-hmm. So perhaps you were in the wrong place. And then you moved into Money Skills for Group Practice Owners. And when did you finish up with us? Do you remember?

Lauren Worley 03:44

And I was like, yes, yes, okay. I want to say it was like April or May last year, because I feel like I just hired my admin before we ended.

Linzy Bonham 03:56

Okay, so it’s been like a year and change. You have been implementing pieces. So what do you want to…

Lauren Worley 04:04

I noticed, and this was a problem before, but now I can see the numbers and see how it continues to be a problem. We take a couple insurances and one insurance company doesn’t like to pay me at any reasonable rate, despite the fact that now they owe me interest if they don’t pay me on time.

Lauren Worley 04:21

But they still don’t pay me on time because they keep changing the rules.

Lauren Worley 04:24

Like if I look at the spreadsheet that you gave us, the team tool. Yeah. I’m in good shape. Sure.

Lauren Worley 04:31

In the black. But then I look at my number at my actual accounts and I’m not. And it’s because I’m not getting paid from these insurance companies. Okay.

Lauren Worley 04:39

So I get this excitement when I look at the team tool. I was like, great. I can pay myself the rate that I’m worth paying, which I’m very much underpaid. And I’m like, oh, no, wait, if I look at my bank accounts, I can’t. And so then I have to pull from my profit first accounts to make sure or right now from my line of credit.

Lauren Worley 04:56

Okay.

Lauren Worley 04:56

Because I’m trying not to pull from the profit first accounts. I don’t know which one’s better.

Linzy Bonham 05:00

Yeah, that’s a good question. Yeah.

Lauren Worley 05:04

In order to make sure my staff gets paid because insurance might take me a month, but I still have to pay my staff on time.

Linzy Bonham 05:10

Yes. Because you have, yeah, you’re set up so your staff is paid when service has been rendered, even if you’re not paid yet. Right.

Linzy Bonham 05:17

So it means that you’re paying them for work that’s done, but you haven’t been paid for that work yet.

Lauren Worley 05:21

I have an insurance company that hasn’t paid me since October of last year because they keep saying that PTSD and bipolar are the same diagnosis and bipolar is a pre-existing condition. Yeah.

Linzy Bonham 05:33

Okay. So, yeah, let’s get into the specifics of the insurance situation. My first curiosity is how much money is owed to you by these insurance companies?

Lauren Worley 05:46

I would have to run the report in Jane, but I think we’re looking in the $8,000, $9,000, $10,000 range at this point.

Linzy Bonham 05:51

Okay. Okay. $8,000, $9,000, $10,000, somewhere like that. Okay, so probably like 10K owed. And how much of that is like old money? And how much of that is kind of newer money that is just in transit?

Lauren Worley 06:04

I would say probably eight of it is old money.

Linzy Bonham 06:08

Okay, so 8K is old money, not paid.

Lauren Worley 06:11

Which if I was getting that, like that would cover payroll. I just keep looking at my numbers. I was like, this is exactly what I’m missing from accounts. And so I like I know I am running just barely in the black, but technically everything is running the way it should. I am paying my staff the right amount for what I’m being paid. But I’m not being paid.

Linzy Bonham 06:34

Yes. Okay. What I’m hearing then is you have a payer, which for Canadians, payers, how Americans talk about insurance companies, that’s not paying you.

Lauren Worley 06:40

Yes.

Linzy Bonham 06:43

Because they’re arguing that the work that you do is not able to be covered because they’re saying PTSD and bipolar are the same, which… of course, from a therapy perspective, is very frustrating.

Linzy Bonham 06:52

But from a financial perspective, just means they have a reason not to pay you for all this work that’s been done. Right. Is there any avenue to appeal at this point?

Lauren Worley 07:01

Yes. And every single time my admin calls, they’re saying, oh, those aren’t the same? Oh, okay, we’ll have it resubmitted. And then she calls and they’re like, oh, it never got resubmitted.

Lauren Worley 07:10

So they’re just not doing the work on their end. It’s probably at the point that we need to be including some sort of…

Lauren Worley 07:19

Local government agency. But the problem is they’re like this weird subsidiary of the insurance company. So they’re not one of the big insurance companies. They’re like slippery.

Lauren Worley 07:28

So I don’t actually know who to include to get them in trouble.

Linzy Bonham 08:32

Because what we’re hearing is your machine that you set up, which you can see because you have the team tool, as you mentioned, the numbers are the place that you should be sustainable.

Lauren Worley 08:43

Yeah. Yeah.

Linzy Bonham 08:44

And the numbers that are a place that you should be able to get paid well enough. I think it sounds like there’s probably still some wiggle to get where you really want to go. It would be nice to have a little bit more.

Linzy Bonham 08:53

But when we look at the numbers, it’s like the way that your team’s wages are set up and the, you know, the client fees and your benefits and your admin team. All of these numbers, you can see the machine that they synthesize.

Linzy Bonham 09:06

You should be in a stable place. Yeah. The reason you’re not a stable place is because of this one insurance company.

Lauren Worley 09:12

Oh, two insurance companies. The other one is also just, I don’t know, didn’t pay me for May. I’m not sure why. Okay. Okay. And there are some things we’re putting into place to have Jane actually be more on top of following up with them and constantly chasing them, which is going to cost me money, but I think it’s going to pay off in the end.

Linzy Bonham 09:32

Okay. We’re going to do some billing through Jane.

Lauren Worley 09:33

Yeah.

Linzy Bonham 09:34

Okay. Okay. So that’s one solution you’re already working on.

Lauren Worley 09:38

Okay. Sorry. I just, there’s this moment where I’m like, oh wait, as you’re reflecting back to me about how I’m at a sustainable place, I wasn’t when I came to you the first time. And so there is something about like, oh, look at what I’ve been able to do and get to sustainability if it wasn’t for this insurance company. Okay.

Lauren Worley 09:57

Or get to stability. Not sustainability because I do need to be making more, but stability at least.

Linzy Bonham 10:02

Yeah. And when you say when you came to me the first time, do you mean like before you did the coursework, the program work?

Lauren Worley 10:03

Yeah. Okay. Yeah. Okay. So there’s a realization here that stability is so close. Yeah.

Linzy Bonham 10:13

So close. And I’m curious, when you notice that thought, how does that sit with you? What do you notice in your body?

Lauren Worley 10:20

As you were reflecting back to me originally, I was like, there was a sense of just relief in my body. I could sort of feel my chest go like, oh, okay.

Linzy Bonham 10:25

Yeah.

Lauren Worley 10:28

So it’s not… I think I’ve spent so much time feeling like it’s my fault. And I’m saying that I’m like, no, it’s not.

Lauren Worley 10:38

I’ve done what I need to do to get my business where it needs to be. I’m just dealing with the conglomerate that is insurance companies and all the ways they want to make things hard. And we want to continue to take insurance.

Lauren Worley 10:52

Like that’s not an option to take it off the table. Because that’s how we want to offer sustainable or low fee services for folks, especially because we take Medi-Cal.

Linzy Bonham 11:03

But Medi-Cal has actually been the best thing to take.

Lauren Worley 11:06

Okay, yes.

Linzy Bonham 11:07

So let’s explore this thing because I’m hearing, first of all, I’m loving that you’re realizing that you actually haven’t done anything wrong here. You’ve actually done a lot of work to thoughtfully fine-tune your practice so that the numbers should be working.

Linzy Bonham 11:23

They should. Which is way more work than most group practice owners have ever been able to or have done with their finances. But there’s a, I wanted to say like, sand in the cogs. That’s not the right saying. You know what saying I’m going for. There’s like some grit in the machine here that’s like fucking it up for you and that is these two specific insurance companies.

Lauren Worley 11:47

The only two that I take.

Linzy Bonham 11:48

Okay, well, that’s interesting. Okay. But you also said Medi-Cal has been good.

Lauren Worley 11:56

So Medi-Cal is one of the insurance companies. I take the commercial and the Medi-Cal version of it. Medi-Cal, they consistently pay me. The rates are based on what California says, so not whatever they decided to give me.

Lauren Worley 12:09

Yes. I think I’m at this place where I’m like, okay… insurance has been the bane of my existence since I became a group practice. They have just been difficult.

Lauren Worley 12:22

But I think they’re the devil I’m willing to stick with. So it’s how do I make decisions? So if that’s just anything that comes from insurance ends up being profit versus the bottom line, like versus I need the income from insurance to be to hit the bottom line.

Lauren Worley 12:41

Does that make sense?

Linzy Bonham 12:42

It’s a strategy that you could work. Right. But the other thing that I’ll reflect to you is there are a lot of insurance companies out there. And something that I’ve worked with over the years with different therapists, both in group practice settings and solo practice, is getting clear on which insurance companies you actually want to work with and which ones you don’t.

Linzy Bonham 13:01

These two insurance companies… is there a reason that you’re working with them specifically? Is there something special about them?

Lauren Worley 13:09

No, one of them I got because someone said, oh, they’re one of the better payers. And it’s true. Their rates are pretty good. When they pay. And that insurance company, like when they, when it just goes to them directly, I get paid on a consistent basis and they’re a good flow of income.

Lauren Worley 13:23

It’s just these small little subsidiaries that then use them as their big, as their, payer, but it’s like a small little company that doesn’t have enough income. It doesn’t have enough people to actually be sustainable. So they need to use the biller of that big insurance company, but they’re not actually that insurance company. That’s where the problems lie. It’s those little ones. And there are a lot of those apparently.

Lauren Worley 13:47

But that one, like when they pay, they’re great. And they’ve given me consistent raises. And like when I ask, this was the first year that they didn’t give me a raise. But they’re pretty consistent with their raises. And I appreciate that. And then the other one, I had a single case agreement because my client was on that original insurance. She switched over to another one. And I decided to go for a single case agreement. And the rates they offer me were huge. This is amazing. And then I became paneled with them, and they wanted to offer me lower rates, and they’ve been trying to lower their rates ever since. I fought for the original rates, and then when I became a group practice.

Linzy Bonham 14:23

You got a little catfished, right? Because as the group practice owner, you get to choose who you do business with. Insurance companies are businesses. I’m sure they make some pretty good money by actually being very difficult and being like, oh, sorry, we can’t pay you for this work.

Linzy Bonham 14:44

You know, that’s to their financial benefit to do that. So, you know, if you, I don’t know, were like going to a bakery where every time you went to the bakery, you gave them money and they didn’t actually give you food. Like how many times did you go back to that bakery before you’re like, ah, yeah.

Linzy Bonham 15:01

Maybe we could go somewhere else.

Lauren Worley 15:03

And I think the resistance that’s immediately coming up is I have six people who work for me or six clinicians who work for me. And it is easy to get them a caseload fairly quickly with insurance.

Lauren Worley 15:19

And so the marketing side of things has always been this really scary. I don’t know how to market and just get private pay with this many people.

Lauren Worley 15:29

I could do it if it was just me. I might even be able to do it if it was two of us. But now we’re at six.

Linzy Bonham 15:36

So I’m going to reflect to you that you just did a little bit of black and white thinking.

Lauren Worley 15:41

Sure.

Linzy Bonham 15:42

I talked about going to a different bakery and you were like, well, I can’t not go to bakeries.

Lauren Worley 15:47

But it is such a pain to get handled with insurance companies.

Linzy Bonham 15:50

Yes, it is. Yeah.

Lauren Worley 15:52

Especially group practices.

Linzy Bonham 15:54

Mm-hmm. But there’s math there to do.

Lauren Worley 15:56

Mm-hmm.

Linzy Bonham 15:56

Right. This is a math problem. Let’s think about it like that. It’s like you could even run the numbers. If we look at how much service you’ve provided.

Linzy Bonham 16:07

Through these insurance contracts. Then you can look at how much money have you actually been paid? How much are you reasonably going to get paid because there’s no reason to think it’s not coming?

Linzy Bonham 16:17

And what is never coming to you? What is money where like you have your team has rendered service, you’ve paid your team members and they are just going to drag you along until we’re all in our graves.

Linzy Bonham 16:31

And that, you know, we would consider that just a loss, right? These companies, I’m curious, in terms of a percentage, what’s your guess of how much money they don’t pay you? A percentage of the time, are they like, oh, sorry, we don’t know anything about mental health, but we do mental health billing.

Lauren Worley 16:51

I mean, that’s one client.

Linzy Bonham 16:54

Okay. So that’s one client. That’s good to know. Right. Because now we’re getting into like numbers. Let’s think about what is the actual impact here.

Lauren Worley 17:02

I mean, that I don’t think I’m ever going to get paid. I don’t think it’s that high. Okay. Like, I think we can fight it. We did. This is the second time we’ve had to fight with this company because they pulled the same thing last year. And the client’s insurance we started and they were like, we don’t have any records of how we ever dealt with things in the past. What are you talking about?

Linzy Bonham 17:20

Yeah.

Lauren Worley 17:26

So we did get paid last time. Okay. So I feel like we will. Okay.

Linzy Bonham 17:32

So there’s a fight there that can actually be won.

Lauren Worley 17:34

I think so.

Linzy Bonham 17:35

And you’re already bringing Jane on board.

Lauren Worley 17:37

Yeah. Right.

Linzy Bonham 17:38

To do more of the kind of active communication billing, which I think it’s always good to bring on people who this is their arena.

Lauren Worley 17:47

Mm-hmm.

Linzy Bonham 17:48

Right? Like whether that’s a private biller or whether that’s just somebody on your team who’s really good at this kind of stuff. So you’re already…

Lauren Worley 17:55

Delegating this to some extent. And I am delegating that. And again, another detriment to being able to pay myself sustainably.

Linzy Bonham 18:06

Let’s talk about that. Yes, because what I’m hearing is when you look at your numbers, the numbers work, but I’m also hearing that $8,000 to $10,000 has broken things.

Lauren Worley 18:16

That’s not numbers working.

Linzy Bonham 18:18

Yeah, no, it’s… thank you. You took my line.

Lauren Worley 18:23

Sorry. It’s like I heard your voice for a year and a half for two years.

Linzy Bonham 18:27

You’re like, oh, I know what she’s going to say. With a practice of your size, we want a lot more stability and durability than $8,000 to $10,000.

Lauren Worley 18:36

At a practice of your size.

Linzy Bonham 18:38

How many clinicians are you at? You’re six?

Lauren Worley 18:39

Six plus me.

Linzy Bonham 18:41

Plus yourself. What is your kind of revenue coming through the door each month? How much are you billing?

Lauren Worley 18:47

I’d have to look at the team tool for that.

Linzy Bonham 18:49

You would. You would. Wouldn’t that be challenging?

Lauren Worley 18:52

I have it up all the time.

Linzy Bonham 18:53

Grab it. Yeah, grab the number.

Lauren Worley 18:55

All the time. I never close it. It’s in a… Just like…

Linzy Bonham 18:59

Instagram and the team tool side by side?

Lauren Worley 19:03

Essentially, yes. So July’s numbers were 39,000 or almost 40,000 revenue. Okay, 40K revenue.

Lauren Worley 19:12

And then 71% in staff expenses. Okay, so… And operating, oh, we were in the red in July. Okay. Okay. But we had 71% for staff.

Linzy Bonham 19:22

What were your operating expenses?

Lauren Worley 19:25

Operating expenses, 46. But there was, um, there was professional development that month. Okay, so that was a big outlay month.

Linzy Bonham 19:35

Yeah. What has been more typical? Can we get 20 to 25? Okay, okay, so that’s good. And with that, we want to zoom out.

Lauren Worley 19:44

Yeah, yeah.

Linzy Bonham 19:45

Do you have your 12-month numbers available?

Lauren Worley 19:47

I do have my 12-month numbers. Because like I said, that spreadsheet never closes.

Linzy Bonham 19:53

Music to my ears. Because the 12-month numbers are going to allow us to really see what’s actually happening. You know, there’s going to be months where we spend on professional development and the numbers look negative.

Linzy Bonham 20:03

But that’s actually not telling us much of a story.

Lauren Worley 20:06

So I’m looking at my 12-month numbers. And the last time I was comfortably in the black was actually January through December.

Linzy Bonham 20:11

Yeah. Okay, so… so last year. This year, there is… you’re running a loss.

Lauren Worley 20:19

Mm-hmm.

Linzy Bonham 20:20

So I’m going to say your numbers are not there yet.

Lauren Worley 20:22

Mm-hmm. OK. I thought. Yeah. My… all facts. I was right with my percentages. So where am I losing it? Where’s the leak?

Linzy Bonham 20:31

What’s your staff percentage?

Lauren Worley 20:33

It ranges between 74 and 78%.

Linzy Bonham 20:36

Okay. Okay. So that’s too high. Yeah. Which you know. So I think that the insurance is a bit of a distraction to a deeper problem here. Probably.

Linzy Bonham 20:48

Because the $8,000 to $10,000 is not actually going to fix this larger issue with your machine. Your machine needs some more tweaking. It does.

Linzy Bonham 20:57

Yeah.

Lauren Worley 20:58

Oh, but where?

Linzy Bonham 21:01

Staff. I think, I think, we know exactly where.

Lauren Worley 21:06

Yeah, yeah. No, you’re right. The numbers tell me where.

Linzy Bonham 21:09

Uh-huh. Yeah. So with your team, tell me what you suspect might not be working in terms of your team expenses. What’s going on?

Lauren Worley 21:20

I mean, my paycheck is fairly consistent. I don’t think it’s me. Well, the people pleaser therapist in me wants to be like, well, if you just reduce your numbers, Lauren, then everything will even itself out, and it’ll be fine.

Lauren Worley 21:32

Itself out and it’ll be fine

Linzy Bonham 21:33

If you just stop existing and stop having needs, Lauren, everybody else will be fine. I don’t need to pay my mortgage. It’s fine. So that’s not where we’re going to adjust.

Linzy Bonham 21:42

That’s not going to work. It’s actually quite the opposite. That’s going to make things work.

Lauren Worley 21:46

Let me look at the team tool. I think some of my staff definitely need more clients. I’m at that point where some people are a loss, but the average still makes it a profit.

Lauren Worley 22:04

But you know what, like nobody’s that high of a profit coming in. And maybe that’s where the problem is. Like we just don’t have the caseload we need. So it’s either adding more clients or changing the way we’re charging clients.

Linzy Bonham 22:17

One of those two. And because you have the tool, you will now be able to model out what that solution is. Yeah. What we see a lot, and I know you know this because we talk about it in the program a lot, it comes up, is generally one of the biggest determining factors of financial stability is the amount of folks that people are seeing each week, just the session numbers. Usually we see that it’s after 10 to 12 that there starts to be like a break even situation. And it’s usually kind of like that over 12, once you get into like 15, 18, that there’s actually profit.

Linzy Bonham 22:49

Right. And what I’m hearing is in a lot of your cases, that’s not what’s happening. Mm-hmm.

Lauren Worley 22:53

Right. I think I only have one clinician who’s consistently seen around 20, 22 clients. Okay.

Lauren Worley 23:00

But everyone else. Which is a lot. Yeah. Everyone else is under 15.

Linzy Bonham 23:05

Okay.

Lauren Worley 23:05

And a couple are building their caseload. They just started with me.

Linzy Bonham 23:08

Yes. So they’re on their way.

Lauren Worley 23:10

And I brought in… people before I should have because they were meeting a need that I couldn’t fill with the people I had.

Lauren Worley 23:20

And so I think I knew that July was going to be a rough month because I was like, but they’re going to feel like I have a weekend person now who can see people on Sundays. I had another in-person therapist and we were busting at the seams with in-person requests. Okay.

Lauren Worley 23:37

And so like they fill a need. Yes. Then if the other people weren’t full yet

Linzy Bonham 23:44

Then… Yeah. You’ve hired a little too fast. Probably. Yeah.

Lauren Worley 23:47

So now… yes, I have. No more hiring. Understood. Do you know how badly I want another supervisor? I’m like, but I cannot do that until things are calm.

Lauren Worley 23:57

Yes. It’s about stabilizing, right? When we have stability, then we can grow. Okay.

Linzy Bonham 24:03

What I’m hearing is you filled some service gaps, but… you haven’t yet been able to fill up team members, which also is going to be negatively financially impacting them.

Lauren Worley 24:12

Right.

Linzy Bonham 24:12

Right. They’re not making as much money as they probably need to make knowing that you live in, you know, California. Right. If they don’t have full caseloads. It’s just an expensive place to live.

Linzy Bonham 24:22

Yeah. So, you know, thinking about what needs to happen, the first thing that I’m going to suggest that you do, and you’re going to have to take this away to do it, is look to see what are the caseload numbers that actually make the numbers really start to work, where

Lauren Worley 24:36

Yeah.

Linzy Bonham 24:36

We’re seeing profitability in each position. Everybody is leaving some money in the business. And for folks who are listening, this is a little bit like inside baseball that we’re talking right now, but the tool allows you to see each position.

Linzy Bonham 24:49

And to see does that position leave money in the business at the end of the day or does that position cost more money than is coming in the door. So you have all of that. You can see the machine right now.

Lauren Worley 24:57

I can.

Linzy Bonham 24:58

So the first point of curiosity in play would be what’s the amount of sessions that makes the numbers work? And always going back to that big picture perspective to see once all these different positions come together, what’s the version that works?

Linzy Bonham 25:10

If it’s not the number of sessions that makes a difference or the number of sessions makes some difference, there’s still more to go. Then it would be looking at, is it shifting to a slightly higher paying insurance? Is it trying to get more out of pocket clients? Then we look at that piece. But your overhead at 20 to 25% is…

Lauren Worley 25:19

Yeah.

Linzy Bonham 25:27

It’s pretty good. You know, like I wouldn’t expect you to go much lower than that. Right. Sometimes people can be lower than that if they’re completely virtual. But we’re in person. I, like, have a huge office space. Yeah. So for the fact that you have a huge office space, these are great OPEX numbers. So I would not think that that’s where the change needs to happen. Yeah. The change needs to happen in the 74 to 78 percent of the money coming in the door going to your team. It’s too high. Yeah. It’s just not sustainable. Yeah. Right. Bringing that number down overall to 65 or 70 percent.

Lauren Worley 25:58

Right.

Linzy Bonham 25:58

Will give you that profit that you’re needing to stabilize you.

Lauren Worley 26:03

And here I thought I was being stable.

Linzy Bonham 26:07

Stable at your size. Mm-hmm. Would mean that you’re owed $8,000 by insurance and you’re not even noticing.

Lauren Worley 26:14

Right.

Linzy Bonham 26:15

Right. Like we want a practice of your size to be at the point that you have that two to three months of operating expenses just sitting in the account. We want you to be able to hit that payroll goal of whatever that is for you, like a month of payroll, probably more because you’re with insurance.

Linzy Bonham 26:28

So you need to be even more stable because of this like insurance delay that can happen that’s not in your control.

Lauren Worley 26:33

I would.

Linzy Bonham 26:33

So I would suggest seeing like a month and a half to two months of payroll.

Lauren Worley 26:36

See, I was going to say two or three months.

Linzy Bonham 26:39

You could. You could. Right. And this is everybody’s personal risk tolerance and situation. Right. So that is going to be the stability. And if we think about those numbers, How much would that be?

Linzy Bonham 26:50

If we’re thinking you did 40K in revenue. In July. Is that a pretty typical month?

Lauren Worley 26:56

Every month has gone up.

Linzy Bonham 26:58

Okay, that’s good. We like that. That’s a good trend. So for instance, the 40K of money coming in the door, 20% of that would be 8,000 times two to three months. This is your operating expenses. It’d be having $20,000, $24,000 sitting in OPEX just as your floor. And with payroll, it’s going to be an even bigger number because your payroll is much larger than that. Right.

Linzy Bonham 27:20

So there’s a lot more stabilizing still to come. And stability doesn’t happen overnight. Stability actually happens like one little bit of profit at a time. You know, in the course we talk about buffers, not profit.

Linzy Bonham 27:32

Right? Because buffers is what stabilizes us. Right. It starts to really feel like profit later when you can take it and be like, “We’re going to Aruba!” But for now, in this moment, your practice really needs…

Linzy Bonham 27:42

Yeah, there’s not Aruba yet. Your practice really needs to be stabilized. What are you noticing?

Lauren Worley 27:49

The internal fight between the confidence I was feeling earlier. I was like, no, the numbers say it’s good. But then like comparing that to the big picture tool, it tracks with everything I told you, right?

Lauren Worley 28:02

Like the numbers say it’s good, but then I look at my bank account and it doesn’t match and that tracks. But I think like looking at the big picture tool a little bit more in depth, it’s seeing how I thought I had at least had a month of stability this year, but I don’t know if that self-blame part is coming up too much. Like, I think there’s, she wants to say something, she wants to be like, mm-hmm, but Lauren, you could have done better.

Lauren Worley 28:32

Mm-mm-mm.

Lauren Worley 28:33

But I think it’s also recognizing, like, the state of the world, recognizing the growth period that I’m in. I could have done better by maybe not hiring as quickly as I did.

Lauren Worley 28:44

Like, but that’s… I don’t need to shame myself around that. Here we are, and now we’re going to move forward and figure out how to make it great.

Linzy Bonham 28:50

Yes. Now you continue to have a tool at your fingertips that you can ask more from your business. Because what I’m hearing is you’ve been using the tool, you’ve been looking at stability, but I think your bar has been lower than it needs to be to give you real stability. But now you can just kind of up the standards, see what needs to happen and act on it to make the changes.

Lauren Worley 29:16

Yeah. And it goes back to the thing that I have known the entire time is what my problem is and that I need to figure out a really steady marketing. So we’re not just relying on insurance companies sending us clients. Yes. And I think we have some good stuff up our sleeve coming up in like the next month and ideas and the school year starting and yes. I have a very excited team that wants to go out and be in the community.

Lauren Worley 29:39

So that’s really great. Great. It’s just also this like, you know, there’s this part that really wants to just hire someone to do the marketing. And then I look at the numbers.

Lauren Worley 29:48

I’m like, there’s no money to hire someone to do the marketing, Lauren. You have to figure this out on your own.

Linzy Bonham 29:52

Not right now. And that is also a possible solution to your problem. I would look at the tool with a lot of curiosity and a lot of play to see is that the only solution to your problem?

Linzy Bonham 30:06

Is that the best solution to your problem? If that is the best solution to your problem, if you’re like, okay, wow, if we could get each team member could have even 15% of their caseload private pay, our numbers change dramatically, everything’s fixed. Now you have a project you can implement.

Linzy Bonham 30:20

Right. It’s project, private pay. Right. And then you and your admin can focus and work on, OK, what are the actions we’re taking to get in front of more folks who can pay out of pocket? How are we tracking whether or not we’re actually converting those people? Are we retaining those people? Where are those people hanging out? What’s working? What’s not? Now you have something you can act on and focus if you choose that as the solution. Yeah.

Lauren Worley 30:27

Right. And as you were saying that once Jane comes on board to do insurance at the beginning of September, my admin is going to have a lot more time.

Linzy Bonham 30:52

Yes.

Lauren Worley 30:52

Because she’s just spending time, hours and hours and hours on the phone chasing down insurance companies.

Linzy Bonham 30:58

Yes.

Lauren Worley 31:00

Which is not a great use of probably other talents that she has. Right. Yeah. And so she will have time to help with the marketing and figuring things out. And so maybe I don’t need to bring someone else in.

Lauren Worley 31:10

I just need to revamp the way I’m using my people. And actually one of my clinicians has also said, she’s like, I’ll take more admin hours if you want me to do other things. So I just, well, she’s building her caseload.

Linzy Bonham 31:21

So you have people who are there and ready to help. Now, as a leader, you need to get really clear on what the project is that they’re helping you with. How do you measure whether the actions are working and just getting everybody clear and on task with what you’re doing and what the goal is. Right. So, for instance, if private pay is the goal, then you can set a goal of like, OK, you know, we’re, we’re, quarter three is kind of like, yeah, it’s coming, it’s coming to a close, to an end. But maybe think about the fall or quarter four. By the end of this year, how many new private pay clients do you want to be in your practice? And then you can work towards actually achieving that number.

Lauren Worley 31:57

Right. And I don’t make that number off the top of my head. I look at the tool and I use that.

Linzy Bonham 32:01

Correct. Correct. To see where does that get us, right? Because we can also think about forecasting as different kind of points in a journey. It’s kind of like you don’t climb Everest in a day. You go from the first base camp to the second base camp, and then you stay there for a while, and then you go up to the next base camp. And we can think of each of those base camps as kind of intermediary sweet spots where the numbers work, where you’re like, okay, if we get to the place where, by the end of the year, we have…

Linzy Bonham 32:26

50 Sessions happening every month that are private pay.

Linzy Bonham 32:30

That gets us to this whole new place of their numbers. Now you can take a little bit more of a raise. Now you can put this much more into buffers each month. Then you can set your sights on increasing by another 50 sessions a month private pay.

Linzy Bonham 32:41

Right. Then you actually have a project you could work, and you can know if you are actually getting the results that you want or not.

Lauren Worley 32:48

Right.

Linzy Bonham 32:49

Because when I hear just like getting more private pay, I’m like, more. More is a lot. More is an endless number. How much is more? How much is more?

Linzy Bonham 32:57

But if you choose how much more is, then you can measure it. And you can also celebrate when you get there. Yeah. Lauren, we’ve covered a lot of ground.

Lauren Worley 33:05

We have.

Linzy Bonham 33:06

What are you taking away from our time together today?

Lauren Worley 33:09

One that I think I need to be looking at the tools as a unit and not as two separate things.

Linzy Bonham 33:14

Yeah.

Lauren Worley 33:17

And like, how does, how is it when I’m doing this stuff on the team tool, how does that actually show up the next month? Yes. Like comparing that, and then using like, right now I think I go through and I do them, and I look, and I’m like, oh crap, oh great, and then I move on.

Linzy Bonham 33:35

Right. It’s like where we are is bad, where we want to be is great.

Lauren Worley 33:39

Yeah. And then… yeah. No integration. Really looking at those together, and then using the team I have. Yes. I don’t actually need to bring more people on.

Lauren Worley 33:49

I need to use the team I have differently.

Linzy Bonham 33:53

And it sounds like they’re eager and ready to help. Yeah. Great. Lauren, thank you so much for joining me on the podcast today. I really appreciate it.

Lauren Worley 34:00

Thank you.

Linzy Bonham 34:05

I really appreciate Lauren coming on the podcast today. I really appreciate everybody who comes on the podcast for coaching. It’s a vulnerable thing to come on and receive actual coaching and not know where the conversation is going to go.

Linzy Bonham 34:18

And today was a great example of what we initially thought was the problem. What we focused on as the area that was going to make the difference in our practice turned out to not actually be the problem. And that’s the beautiful thing about co-regulations and having other humans’ minds work on your math is we often focus on something in our business, but it’s not actually the thing that’s going to make the difference.

Linzy Bonham 34:38

And in Lauren’s case, what’s actually going to make the difference is something in her amount of clients that are being seen, fees, private pay. There’s some sort of kind of beautiful equation in there that’s going to make her numbers work and allow her to be paid well as a good practice owner and build stability.

Linzy Bonham 34:56

But that $8,000 that’s owed by insurance is actually not the thing that is going to do it.

Linzy Bonham 35:01

So, so appreciate Lauren coming on today and digging into her numbers. We didn’t actually look at her numbers at all in terms of screen share because that’s not good on a podcast. But I appreciate her having her numbers available so that we could start to poke around and be interested.

Linzy Bonham 35:13

And I’m very excited and curious for her as to what she discovers is not working in her numbers. Thank you for joining me today for the podcast. If you want to be more connected with us, we have our free WhatsApp community.

Linzy Bonham 35:24

If you want to join the community, you just need to send a message to hello@moneynutsandbolts.com. We will send you a link to a form that will get you in the door. It’s a great little space to connect with me and other therapists who are working on their relationships with money.

Linzy Bonham 35:38

Thank you so much for joining me today.