STP 20 | Every Practice Profitable with Julie Herres
Apr 30, 2023
In this episode of "Scaling Therapy Practice", James Marland interviews Julie Herres, the founder of Green Oak Accounting and the author of "Profit First for Therapists". Julie is an expert in profit first who has helped hundreds of private practice owners gain financial freedom.
The Profit-First System for Therapists
According to Julie, the Profit First system is a simple but effective way of managing your finances. It involves separating your money into multiple small plates or bank accounts. Each account is allocated for a specific purpose, such as taxes, operating expenses, and profit.
“Profit First is not just a block of money in the bank account, but real numbers on taxes, profit, and operation expenses,” says James.
By following the Profit First system, you ensure that your practice always remains profitable. The system helps you to be disciplined with your finances and to make informed decisions based on real data.
An Introduction to the Profit First System
According to the book Profit First, here are the steps for implementing a Profit First system for a small business:
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Set up multiple bank accounts: Open multiple bank accounts and label them according to their purposes, such as Income, Profit, Owner's Pay, Taxes, and Operating Expenses.
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Allocate funds to each account: After each deposit, allocate a percentage of that money to each account based on predetermined targets. For example, allocate 5% of the total to Profit, 50% to Operating Expenses, 15% to Taxes, and so on.
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Use the Profit account: Use the Profit account to pay yourself first and reward yourself for your hard work. Take a portion of the money in the Profit account and use it for something that brings you joy or invest it back into the business.
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Adjust the allocation percentages: After a few months, adjust the allocation percentages based on your actual revenue and expenses to make sure that you are on track to meet your goals.
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Monitor your finances: Regularly monitor your bank accounts and make adjustments as needed. Use financial reports and cash flow projections to make informed decisions about your business.
By following these steps, small business owners can gain a better understanding of their finances and take control of their profitability. Implementing a Profit First system can help them avoid the common pitfalls of poor cash flow management and set them on a path toward financial success.
The Importance of Small Plates for Your Therapy Business
One of the key concepts of the Profit First system is using small plates or bank accounts. Julie explains that small plates help you to avoid Parkinson's Law, which states that your demand tends to increase to meet the supply that is available.
"When you see a bunch of money, you're like, okay, we have plenty of money let's go we can spend something, right?" says Julie. "But that doesn't take into account your tax payment, maybe rent is due next week, or payroll's in six days."
By using small plates, you can allocate funds for specific purposes and avoid overspending. You can also plan ahead for upcoming expenses, such as taxes and rent, and ensure that you have enough funds to cover them.
Specializing in Mental Health Industry
Julie's company, Green Oak Accounting, specializes in serving the mental health industry. According to Julie, specializing in a particular industry allows you to provide better service to your clients.
"Our clients are great at accounting, they're great at tax prep, but they don't know your industry the way that we do," says Julie.
By working exclusively with mental health practitioners, Julie's team has developed expertise in the unique financial needs of the mental health industry. They can provide tailored advice and help clients make informed financial decisions based on real data.
Every Practice Deserves to be Profitable
Julie's book, "Profit First for Therapists", is a guide to help mental health practitioners implement the Profit First system in their practice.
"Every practice deserves to be profitable," says Julie.
The book provides step-by-step instructions and practical advice to help practitioners take control of their finances and ensure that their practice is always profitable. It also includes helpful tools and templates to make the process easier.
Links and Resources for Therapists
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Email James to talk about questions or problems about scaling: [email protected]
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PsychMaven - Find more resources here
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Builder Type Assessment - grow without the grind
- Profit First For Therapists Facebook Group
- Julie Herres on Instagram: @julie.herres
- Therapy for Your Money Podcast - check out their free Return on Investment tool
- Profit First for Therapist Pre-order: Free Profit First Assessment
- OneTab Chrome Extension
- Watch the Video on YouTube
- Green Oak Accounting
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