Know Your Nut: The Number Every Practice Owner Should Know Cold

You know your clinical numbers.

How many new patients you need per month. What your average visit is worth. How many visits it takes to hit your revenue goal.

But here's the question that stops most practice owners cold: what does it actually cost to keep the doors open every month, all in?

That's your nut. Every dollar that has to go out before you keep a single cent. Rent. Supplies. Software. Contractor fees. And payroll, which is almost always the biggest line on the list, and the one with the most hidden pieces.

Most practitioners are fuzzy on this number. They know "about" what things cost. But "about" doesn't pay your rent. "About" doesn't tell you how many patient visits you need before you break even. "About" is how you end up white-knuckling it every month, wondering where the money went.

Payroll is the best example of how the nut sneaks up on you. Gross wages are just the starting line. Add the employer's share of payroll taxes (Social Security and Medicare, plus federal and state unemployment), and your real payroll cost is 8 to 12% higher than you think. Most practitioners don't know that number. And that's just one line item.

One of my clients did this full exercise for the first time recently. It took 20 minutes. He said, "This is easier than I thought it would be." Then he built that number into his Profit Plan and finally knew, clearly, what his practice had to produce every two weeks to hold the line.

That's power. That's clarity. That's what running a business, instead of just working in one, actually looks like.

Know your nut. Everything else builds on top of it.

Your move this week: Pull your P&L. Add up every fixed expense: rent, payroll (with employer taxes), software, supplies, cost of goods, everything. That total is your nut. Now divide it by your average visit value. That's the number of patients who walk in the door before you've broken even. Know that number like your own phone number.

Most practitioners are surprised how close they're running to break-even without realizing it. The nut doesn't lie. It just tells you the truth you've been avoiding.

Stay Profitable, Dan

Want help with your own numbers? Schedule a free numbers review. One call, two or three of your real numbers, and a clear next step.

This post first appeared in The Profit Weekly, Dan's Friday email for private-pay and hybrid practice owners. Get The Profit Weekly every Friday.