Hiring your next associate or purchasing a piece of equipment is a big financial decision. Listen to a formula that could help you decide if you should do it and be profit first.
Today's episode, I was watching some futur videos again with Chris doe. And he was discussing, you know, how much you should bid him for design and project. And of course, they do logos and website design and brochures and all this and he charges us a premium price.
And he was talking about, if you were going to hire someone else to do it for you, with your experience level, what would that cost?
How Much Should You Pay an Associate Doctor?
How many days would it take to do this project that this person wants? You got a number. Now increase it because it might take longer. Then you got to add a sales rep percentage in there, a manager that oversight everything.
And you also have to add profit into that. And then you have this much bigger number than you probably would have initially said, you know, you maybe you would have recorded this person 5000 this business, but now the price is almost like 16,000. It depends on the business you're talking about.
They might say, Yeah, that's a great price. Obviously, a small mom and pop might not think that's a good price, but a medium sized company could say, yeah, that's a fair price. I like your work, etc.
So how do you translate this into a medical practice? pT Cairo, etc. So I was thinking, an associate or a piece of equipment. So if you add all of these things together, you know, what does this equipment associate need to bring in per hour, so that all the numbers work financially, and it's a good decision.
Pricing Formula to Pay Salary and Bonus
So here's kind of what I came up with an associate 5500 a month. Gonna add some tags in there, let's say 1200. These are just simple numbers. Okay? That's 6700 a month.
Let's assume you work 36 hours a week, 4.3 weeks, that's 154.8 hours per month. So let's go with that number, say 150 4.8. So just to cover that it's 43 per hour.
Now, this person probably needs an extra marketing, let's say 10% of their salary would be an increase in your marketing budget. That's 670.
You're gonna have extra staff. Let's say it's 1200. Maybe it's not staff. Maybe it's partially staff. Maybe it's more paper, maybe it's more hand sanitizer, you know, disposable goods. Let's just put a number in there. Okay. Then you got a subtotal.
That's 8570 you want a profit built in. That's a 30%. That's 2571.
So the total was 1141. You divide that by the 150 4.8 hours per month, and it's pretty much $72 per hour.
So now you have to find out, can you increase your business? Let's say you keep working the same as you are, and you're just busting through the seams. So you need to hire somebody else.
How many people does that person need to see to make an extra $72 an hour for the clinic, because even at 72, that's a 30% profit, right?
Now, obviously, if you're trying to step back and not do as much work, that's a different factor, you have to play with these formulas a little bit better, but even a piece of equipment.
Formula for If You Should Get a New Piece of Equipment
So you want to get a new cool laser was that laser costs? Do you have to have an extra staff person doing it? What does that cost? How much profit Are you wanting to get as a percentage, and then you can find out Okay, I need to actually make whatever I'm just making the number of 60 bucks an hour on this device to pay for it and make it profitable.
So that means how many patients can you see in an hour doing a cold laser? Well, some of them are like a 10 minute program, some of them like a 20 Minute. So you got to figure that out.
And then you can divide that amount per hour by the time treatment you get, maybe have a little cushion in there. And then you know, like, Okay, this will be a profitable adventure or not.
And if you go back to the associate, since you're already making the 30% profit, now you can do a bonus structure, you know. So in this case it was, let's just say 11,000, even you get an associate, they bring in an extra 11,000 you've already made an extra 30% profit, you want that higher you say you want to make a 50% 60% profit before you a profit share with them.
Then Okay, that means it makes more and then you can have a sliding scale, you know, the first 20,000 extra you make you make this percentage, and then every 5000 after that, you get a percentage from that.
I know Kevin Christie did an episode with the modern corporate marketing show about associate bonusing structures. It was really good. I would search for that one and then you can combine these two episodes.
I think he could really be a much more educated position before making some kind of decision that could impact you negatively if things don't work out because the planning wasn't there. So anyway, that's what I got for you.
Listen, think and implement
Welcome back to a doctor's perspective minisode let me just bring it to your attention. It's not out yet but I got a coloring book it's gonna be sweets can have animals, some you know, and some your kids won't know more than likely like a platypus or a praying mantis you know some some strange animals that Cool, and it's gonna be trilingual, English, Chinese and Spanish. So your kids can color some cool animals as the same time. It's flashcards. So if you do a Kindle version, just flashcard, and they can learn a bunch of things, potentially by the time you hear this, it is out, you don't find on Amazon underneath my name, then just hang tight. It'll be it'll get there soon.
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