Jack O'Brien: The Tax Trap Clinic Owners MUST Avoid | GYC Podcast 297

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Timestamps
[00:23] - The Issue of Unexpected Tax Bills
[02:05] - The Role of Accountants in Tax Preparedness
[05:28] - Managing Tax Liabilities with Bank Accounts
[06:46] - Monthly Cash Allocation Rhythms
[10:02] - Importance of Regular Meetings with Accountants
[13:16] - Questions to Ask Your Accountant
[17:02] - Tax Planning and Scenario Analysis
[22:16] - Budgeting for the Future
[25:01] - Key Takeaways from Recent Budget Announcements
[30:03] - Approaches to Budgeting
[36:03] - The Importance of Monthly Reviews
[40:17] - Overcoming the Taboo of Discussing Finances
[42:25] - The Moral Responsibility of Financial Health

In this episode of the Grow Your Clinic podcast, we dive into the often daunting topic of unexpected tax bills. Joined by Jack O'Brien, we discuss why these surprises can be particularly stressful for clinic owners and how proactive financial management can help mitigate these issues.

Highlighting the importance of having a proactive accountant and a solid understanding of the tax ecosystem, we explore the complexities of tax law and how clinic owners can prepare for their tax liabilities by setting aside cash in separate bank accounts. 

We also discuss the importance of establishing regular rhythms with your accountant, including monthly cash allocations and quarterly reviews. Jack provides practical advice on what questions to ask your accountant to ensure you’re getting the most out of your financial discussions.

As we transition into budgeting for the upcoming financial year, we highlight the need for both optimistic and conservative budgeting approaches. Jack encourages clinic owners to consider the second and third-order consequences of their financial decisions, ensuring they are well-prepared for growth while managing potential risks.

Finally, we touch on the importance of clear communication in financial management, referencing insights from Jeff Bezos on the value of sharp notes and effective meetings. We also recommend the book Supercommunicators by Charles Duhigg, which offers strategies for deepening connections in conversations

What You'll Learn:
💰 Financial Management: The importance of cash allocation and having multiple bank accounts.
📅 Monthly Rhythms: Establishing a routine with your accountant for better financial clarity.
📊 Budgeting Tips: How to create a realistic budget that balances ambition with reality.
📝 Communication Skills: Learn about the power of clear writing and effective communication in business.

Whether you're a seasoned clinic owner or just starting out, this episode is packed with valuable insights to help you grow your clinic sustainably! 🌱💼

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Transcript

0:02

This is the Grow Your Clinic podcast from Clinic Mastery. We help progressive health professionals to lead inspired teams, transform client experiences, and build clinics for good. Now, Jack O'Brien, it is coming into the tax season. One of the things that we often hear is, I just received an unexpected tax bill. which is kind of like throwing a red rag to a bull potentially, especially for Well, I mean, unexpected tax bills are an issue. If you're getting any unexpected bill is an issue. In fact, any bill is an issue. Bills are not fun. I emptied the letter box at our home the other day, and the kid's like, oh, what if we get dad? They're just all bills, kids. So I've heard it said that there should never be an unexpected tax bill. Yeah. By a mentor many years ago. I'm not sure who to attribute the quote to, but it is, I think it's a truism, right? It's not always true, but it's a truism in the sense that tax is a lag indicator. It's, it's a latent bill that comes after something. And so if that's unexpected, I guess the premise of the point is that a good proactive accountant and a good proactive clinic owner who's getting the right advice, the right mentorship, nothing should be surprising. And in fact, I guess one of the skills of being a business owner is to reduce the amount of unknowns in your world. As you progress in the skill of leading a business, more becomes known and less becomes unknown. I agree with the Uh, well, I mean, you've got one job, Mr. And Mrs. Accountant. Their job is to, to minimize your tax and to help you be aware of your tax. So in one regard, yes, I am. And I think most good accountants, uh, good inverted commas would probably agree with the principle that there shouldn't be I think so. Sure. You're never going to nail it. Absolutely. On the dollar amount. But typically the ones we hear of are pretty sizable relative to the clinic, right? It's like, gee, I just got this like $50,000 tax Right, so here's the thing. As you grow in your business leadership journey as a clinic owner, you need to become proficient at a lot of skills that they do not teach you at university. And tax law and the tax ecosystem of where you operate for majority of our listeners will be Australia, but the same is true in any of the States in the US, across Canada, the UK and New Zealand, is that tax systems are inherently complex and you need to be across the complexity. For instance, in Australia, there's little periods of time where you'll get what feels like a double whammy of tax because you transition into a season where you're paying historical tax and you end up in a system where you are preemptively paying future installments of tax. And that is often the unexpectedness that comes about that you know you've got a latent or lagging tax bill and you're all of a sudden slugged with a pay-as-you-go installment system. Again, that shouldn't be surprising to an accountant. The other thing with particularly in Australian tax law is it can be very laggy in the sense that we've just finished the end of March. So in March 2025, you had to submit your final tax information for financial year 24, which was nine months ago. And it was for the preceding 12 months before that. So in April 2025, you now have a tax event or a tax exposure to something that happened potentially in July 2023, 21 months ago. So you might have walked into a profitable season in your business, or maybe there was a capital or a liquidity event that's taxable 23 months ago. You spent the tax, sorry, 21 months ago, you've spent the money, the cash in the following 20 months, and now you have to pay the tax. Again, that is a known truth, but the preparedness is what catches people out. So it is complex. It requires putting cash aside. It requires being disciplined with your spending habits. It requires sometimes creativity in your accounting or how you manage your cash arrangements in which entities and with bank accounts. And I know I'm spitting out a lot of jargon here, Benny, but clinic owners need to be aware of this complexity. And often you don't know what you don't know, and you can prevent the brain damage of an unexpected tax bill by leaning on those who have been there, done that, got the t-shirt and can guide you And as you're saying, like, have been through the experience, most likely recently we asked the team here at CM, you know, raise your hand on an internal training session if you've ever had an unexpected tax bill. I think all hands went up. And it's like after that experience, you go, I never want this to happen again. What do I need to do so that it doesn't? So hopefully for most folks, it never happens, but likely happens once only. Then you go, what are the systems that I need to install? Did you know that you could send an email to helloatclinicmastery.com and request a free assessment of your clinic and get a report that outlines detailed action steps for how you should sustainably grow based on the findings? Just send an email to helloatclinicmastery.com and we'll organize a time with one of our growth specialists to review your clinic and outline the path to sustainable growth. Right, back to the episode. Bank accounts. We've also got rhythms with our accountant and advisors and bookkeeper, but let's go to bank accounts. What are some things that you've done or you've seen others do that have been effective in Right. So having multiple bank accounts where you're putting aside to match liabilities, including your tax liability, but also things like leave liability or any debts that you want to be ahead of the game on. And you should, because healthcare is majorly or in the majority, a cash-based You know, we typically will see clients and they'll pay on the spot, or maybe there's some small invoicing that happens on a 30, 60 day basis. So most of what we do is in cash. And therefore at the end of a month or the end of a quarter, your accounting software or your accountant should be able to tell you what your likely tax exposure is going to be on that given time period. Now, of course, there's lumps and bumps and things smooth out over time, but you can get a rough idea of what your tax exposure should be. and it is pertinent to put aside that cash for tax. Put it in a dark bank account that you don't see, you can't touch, you're not tempted to spend it on some shiny equipment in the clinic or take it out and fiddle with it in your own personal finances and just put it aside. There is a strong temptation, Benny, for clinic owners to use that cash like, oh, I'll use it now. I don't need it for the ATO for a couple of months, maybe even a year or two. I might take it out and sit it off my home loan. Side note, tread very carefully there because the bank is starting to, the tax office is starting to treat that type of funds movement differently. or spend it on equipment or spend it on tax deductible things, which is a bit of a misnomer because the tax deductibility on those said things is only 30 odd percent of their value. So You gotta hide that cash away, be diligent, be prepared because when the bill comes, as the great man Shane Davis would say, you wanna be looking at it, not looking for it. And it's funny, and this is the same as investing or any of those principles, is probably mathematically, it makes sense to do something else with that money. rather than leave it in a bank account that might earn three, 4% interest. It mathematically makes sense to do something else with it, but psychologically you sleep much better at night knowing that when the tax man or woman comes knocking that you can pay your bills. So I've found that super useful after having that mistake many, many years ago is to have separate accounts within the one bank account. It's literally called tax, and you're putting it across there and seasonally checking that you've got what you need in there. And I definitely rely on the accountant to fact check those numbers as well really clearly each month or each quarter. So let's go then to rhythms. What does that look like for your own rhythm where you're managing the allocation of those funds, reviewing what you've got versus what you owe, and then the connection with your accountant or other advisors? What do you recommend is important for Yeah, we see the best clinic owners, Ben, do a monthly cash allocation. So at the start of each month, we've got a fantastic tool resource that clinic owners can utilize inside our academy and elevate learning portals where they can go through and put aside cash for the, whatever cash they've got, put aside for tax, put aside for other liabilities, put aside for a rainy day fund or an emergency fund, put aside for capital expenses, investing back in the team and the community. and ultimately manage the cash that they distribute to themselves as a reward for their investment in their business. So doing that monthly cash allocation is a really healthy rhythm. And if you're doing things well, it's a really enjoyable time to see the fruits of your labor. When you do that, you want to refresh yourself on what your liabilities are on a monthly basis, because it might be that your leave liability in your team has gone up, no one's taken holidays, and they've accrued additional hours of leave that you need to set aside some cash for. Interestingly, Ben, the next month that rolls around will be May 2025. And it is almost certain that people on your team have taken leave through April. We've got the exciting time of Easter and Anzac Day colliding in school holidays in 2025. And I say that to say, clinic owners, If your team have taken larger than normal holidays, or sometimes this happens at Christmas, it may be that your leave liability has decreased and you don't need to put any additional money into the leave liability account. In fact, you might be able to take some money out of the leave liability account and allocate that elsewhere. So that would be the monthly component. I'd say at a minimum, you need to be meeting with your accountant quarterly. every three months. And to your point, you need to ask them to fact check what you're doing. You need to ask them to be honest and to tell you straight, because if things aren't going well, you need a canary in the coal mine that can highlight these things too. You don't need to wait until it's too late. and most things are foreseeable, most things are predictable, and This episode is brought to you by AliClinics.com. If you want a single place for all of your policies, procedures, and training, Ali is where to go. You can test it for free. You can download our library of policies, procedures, and training in three clicks of a button, immediately share it with your team, and see whether they've read it using the custom acknowledgements function. This is great for compliance purposes. You can also upload police checks, working with children, CPR and first aid, professional indemnity insurance, and make sure that you have all the compliance docs that you need to run a good business in one place. Not scattered systems, making sure everything's efficient and you never have to answer the same question twice. Is the brain outside of your brain a key tool in helping you grow your clinic that's less reliant on you? You can test it for free. Go check out alieclinics.com. All right, back to the episode. Just on that, Joe, a number of people have said to me over time, yeah, but I don't know what to ask my accountant. Like I'm not skilled in finance. I just kind of am hoping that they might prompt it for me. I think If you're asking that question, it reveals to me that maybe they're not the most proactive in the sense, maybe not the right accountant for you, but always give the benefit of the doubt and go back to them and sort of try and provoke some more learnings and insights from them. But what is it that you suggest people say? They're like, okay, Jack, I hear what you're saying. I got to meet with my Yeah, good question. You want to ask them things like, what don't I see? What's the non-obvious elements in this profit and loss? What would the really astute accountant see if they were looking at this? What are the truths that maybe I can't see, but I need to hear? Where am I doing well? And where are my vulnerabilities? And then you want to ask them some potential questions like, how can I make this better? Where is there potential for me to refine this? Where is there a ratio that's, I'll say acceptable, but not exceeding expectations? How can I really press that And then I would ask them, and this is as much to get information out of them as to gauge their business literacy. I'd start to ask them some questions around like, what is an expense versus what is an investment? What am I spending money on that's making a mere return or that generates additional cashflow versus what is simply an overhead or an unnecessary expense? I'd ask them, is there any creative solutions that we haven't explored yet? So a lot of those like potential questions or even hypothetical questions, yeah? Hypotheticals are fun because they might not be exactly what we enact, but they might open up a doorway, open up a conversation that we hadn't otherwise considered. So it might be like, hypothetically, if I got an unexpected tax bill, what could we do? Or hypothetically, I need to boost my revenue by 20% next month for X, Y, Z, what could I do? Hypothetically, if you were going to do some creative accounting that might land us in legal trouble, what would you do? Not so that you actually do it, but so that the creativity could inspire us. So you're trying to ask questions that draw out, they're actually coaching questions, Ben, draw out some of that hidden knowledge that isn't just superficial from your accountant. And either, here's the great thing, right? They're either going to spit out some brilliant ideas or going to stutter, stumble and have nothing. And they've just shown you that they're probably not the proactive accountant that you truly I guess accounting probably by definition is historical and looking backwards, I've got a book on my shelf behind me. And I just thought of this as you were talking about it. It is uh for those listening in it is 101 ways to save money on your tax legally this is not the cayman islands edition um this is this is written by a guy called adrian rafferty raftery Gee, I've butchered that. Anyway, he writes this. It's essentially the ATO website in a book. So it's riveting reading. But essentially, you get really practical strategies on your tax. They're updated every financial year. You can see Yeah, it's fantastic. They just put really simple tax strategies in there for you to use, referencing the ATO. So obviously this is for Australian-based clinics. Internationally, hopefully there's something there that you can sink your teeth into. Yeah, one of the questions that came up for me years ago after that unexpected tax bill was essentially, how do I never end up with one of these again? to my accountant, like, OK, well, we've got to do this, this and this. And then another version of that is like, what are the best businesses or families that you deal with? What do they do to lower their tax as wisely and legally as they can? And then that eventually led to tax planning, like what's involved in tax planning, which is a bit more of a future guide. And to your point of the hypothesis, sorry, hypothetical, we're literally doing scenario planning. So like you said, hypothetically, if this scenario happens, we're literally doing scenarios on a spreadsheet where it's like, if we do this, then this is the likely tax position outcome that you would do. For me, visually, that really helped screen sharing or side by side, looking at a spreadsheet and playing out different scenarios so that Because the account is always like, well, it depends on what you want to do, you know, how risky are you, etc. And so I understand they need to tailor their advice. And at the end of the day, you've got to own your decisions. being able to play off different decisions against one another was really helpful for me and to see it on a spreadsheet to go, oh, this is the percentage and this is the dollar amount of tax that you'd be positioned to pay, you know, if we take scenario A versus It's a really good point. And we work with a number of super proactive, super sharp, creative, in the positive sense, accountants. They do exist and they are incredibly helpful. They are worth their weight. They are brilliant. Again, to that point, they're an investment. They're not an expense that just submits your tax return. They're an investment I've got a favour to ask. Would you mind reviewing and rating this podcast, please? It helps us attract great guests and partnerships from companies who want to do business with you, and we can negotiate the best possible deals and discounts so that you can grow your clinic sustainably into the future. Just open up your podcast player and hit the review. It looks like 70% of you use the Apple podcast player to listen into this show. So next time you open up the show, can you give us a review and rating? Every single review counts and we are so grateful for it. All right, let's head back to the episode. What do we see the best clinic owners do with their accountant? Well, you've probably heard the adage, garbage in, garbage out, right? And so if you only tell your accountant what they need to know or only give them a shoebox worth of receipts, proverbially these days, What can you expect? Like they're just doing what you've, they can only work with what you give them. And so what do we see the best clinic owners do? They future pace their accountant and they share their desire statement or life by design. And a really interesting case, Ben, that comes to mind, it was coaching and mentoring an early stage clinic owner in our Elevate program. Elevate's suitable for those who are doing up to about 30, 40K a month of revenue. It's the solos, the startups, and those who are scaling up. And so, I was coaching a clinic owner in there and, you know, they're doing 30 odd K a month, right? So it's not big bickies, it's substantial, but it's not top end of town by any stretch. And they said, what should I share with my accountant? And I said, well, where do you see your clinic in three to five years time? Oh, we'll have our own facility with, you know, nine consulting rooms, big gym space. I wanna have a team. I wanna be off the tools. I wanna make sure my children are taken care of. When it comes to education, we wanna travel. Right, you need to share this stuff with your accountant because what that means is you might need to start planning to acquire a commercial property inside either a trust or a self-managed super fund if that suits your investment appetite. You need to start thinking about trusts so that you can manage the profit of a clinic that's doing over 1.5 million rev, over a couple of hundred thousand dollars in profit. You need a trust to be able to manage that or you're paying 47 cents in the dollar in tax and you don't want that. If you're thinking about children and long-term, you might be thinking about investment bonds for their high schooling or for their university, if you wanna pay that in full. So investment bonds are a different vehicle that help you manage tax. I'm no accountant, this isn't tax advice, this is how I coach them. But you need to share that picture with your accountant because if they think you're gonna stay at 300K a year forever, that's a very different scenario to a $3 million a year clinic that you wanna build and that we are very It's a great point, reminds me of a conversation very early on with my accountant. And sort of that scenario was put to me of like, is this going to be something small or what are your goals and ambitions? And I've seen this play out so many times with clinics that we work with. And the point is like they set them up as a sole trader, not knowing kind of where they're headed and getting them in the right vehicle earlier on. And for the extra, literally a couple of hundred bucks at that point, they're like trying to save them money. So it's so important to be on the same page. And I think a regular rhythm of comms, like you said, enables that conversation and In particular, right now, you know, at the time of listening to this, there might be 8 to 10 weeks left in this financial year. here's the two actions for you as a clinic owner. Number one, get as clear as possible on how you see next financial year playing out for your clinic. What sort of revenue and what sort of profit and what sort of unique expenses might arise because there may be substantial but simple decisions that you and your accountant can make before June 30 this year to ensure that next financial year is maximized for you. It might mean that we need to pull some of those expenses forward in this financial year. It might mean that we delay some of those expenses. It might mean that we set up a trust or a holding company or transition from sole trader to proprietary limited now, and maybe we do that in June 30. Maybe we need to, and this perhaps gets onto some more budget and tax timely stuff, Ben, perhaps we need to invest in some assets now before the tax law potentially changes on July 1 around instant asset write-off. So if you can be super clear on what your financial year 26 clinic looks like, pass that information on to your accountant and And to that point of the scenarios, how many times have people come to us and said, yeah, I went and bought this very expensive piece of equipment or invested in this thing, and they didn't tell their accountant or didn't have a plan with their accountant to do so. Such sage advice. You're about the only person that I know apart from my accountant who had the popcorn out on budget night and received a text from you. I'm like, gee whiz, you live a riveting life. The budget for Australia is being released and launched and I get a text from J.O.B. saying, What a night! And so I always look forward to our conversations post-budget, and we'll connect this into budgeting as a clinic. But what are some of the takeaways and headlines, especially for Australian-based clinics, that Well, it was a bit of a nothing burger this year, to be fair. Again, we're recording here at the start of April. There is a federal election in the start of May. And so any budget that's proposed is subject to elections. And so it's a little bit of they can say whatever they want. But what we do know is that if Labor get elected or somehow form government, that they will roll back the instant asset tax write-off back to $1,000. Essentially what that means is if you purchase anything worth more than $1,000, you cannot claim that on your tax. You must depreciate that on your asset register and balance sheet. And so that means that the tax component of that isn't claimable all at once, it's claimable over a number of years. And so that is disadvantageous to business owners is the short version. What liberal have committed to do is increase that instant asset write-off to $30,000 and lock it in indefinitely. So what that means is if you purchase anything up to $30,000, you can claim the tax component, the GST component instantly. So that's a big one. Again, that remains to be seen how that gets applied, but that will be applied one way or the other by July 1, 2025. The other interesting components, as interesting as they are in the budget, is a bipartisan commitment to continually increase the NDIS moderately and conservatively. So there's no rollback of the NDIS overall. Yeah, there'll be individual components that are impacted. Does the growth match demand? No. NDIS is a whole nother podcast, of course. But the positive news was that it will continue to grow. A couple of other like interesting little side quests, the liberal coalition have suggested that some entertainment expenses will become tax deductible. And so that is a welcome news for us, for us clinic owners who are interested in culture and taking care of our teams and, you know, creating memorable experiences for our clinicians and admin teams alike. A liberal government will make some of those expenses tax deductible. The Labor Party, and this is my hope here, Ben, is that this is bipartisan. I'm just highlighting their policies. I'm trying to refrain from my opinions publicly here, at least. The Labor government have suggested that they will lower the lower the ability for employees to start businesses. Essentially, they're stripping the non-competition protections for business. So I think their intention is to make it easier for people to start clinics, businesses, and make it easier for people to earn income. But that is a very real scenario that clinic owners need to consider how that might impact their future risk as they consider it. And they're the big ones. They're the big ones. There's a few other policy ideas that have been tossed around, particularly as it pertains to superannuation and holding investment properties and how tax is considered for trusts. And as I mentioned earlier, those distributions to trustees that are then transferred back on the 25th of June, that might be treated differently. So overall, There will be some change one way or the other on instant asset write-off. There might be some change on entertainment for your teens, and there might be some less protection as Mm. Like you said, it's going to be an interesting couple of months here in Oz as we go through the election to see what manifests out of all of that. As it sort of flows down into budgeting for your clinic, what are some of the key things people ought to be thinking about, you know, at this point in the financial year? We've got a couple of months till it wraps up in Australia. And maybe thinking of the next financial year, part of your advice in connecting with the accountant is to start to share where you'd like to be. So often people are like, where do I even start with the budget? What should I look at? How should I go about setting something that balances my ambition with reality? How do There's a couple of different ways that you can look at budgeting. You might be, you might build an optimistic case where you are quite optimistic as the name implies necessarily, where you're looking quite positive with a positive sentiment to the future. And so you might be quite ambitious when it comes to particularly revenue targets and the consequences thereof. If we're going to grow revenue, we might need to think about fee adjustments, recruitment, additional services, product lines, et cetera. And then there's the conservative side of budgeting. Perhaps we're a little more measured with revenue projections and a conservative budget would consider, I'll say worst case scenario when it comes to expenses. What could be the most difficult scenario that presents itself? And so there's probably a healthy base case in the middle between optimistic and conservative. And so to your point, it's prudent to actually do both of those exercises, to go, what is best case scenario that might play out next year? Maybe we do grow really healthily and things fall into our lap and we are the custodians of a fortunate set of circumstances. And then what might it look like? Again, you could take quite a dim view of the world. There's global economic instability. There's very little relief on the horizon for cost of living relief for the average Joe. Is your service in particular a discretionary spend? Do you have exposure to third party systems like the NDIS, DVA? Medicare is actually another one I should have mentioned as it pertains to the budget and access to mental health care plans. I can't tell you which party, but one of them said they would reinstate. I'm pretty sure it was the... I won't put a name to it, but one of them said that they will increase the amount of visits available in the mental health care plan. That has significant roll-on effects or flow-on effects for those in the mental health space. So build out your conservative case, build out your optimistic case, and then decide for yourself where you are going to pin yourself. but it needs to be as realistic as possible because what we see is that when it comes to good financial management and good financial analysis, those who can project as accurately as possible and then perform as closely to those projections as possible are the ones who have certainty over their finances. And so much of financial management control is certainty. So project well and Yes, I love that distinction. Reality can include being quite ambitious or optimistic. Sure. Depending on the context, it doesn't need to mean conservative, but it can mean that. So I love the the distinction there of, you know, you're doing budget budgeting well based on your proximity to, you know, with your actual results at any given end of the month or quarter financial year as well. Even today, you and I are talking about budgeting before we jumped online for this episode. And it's just something that you continue to refine. You continue to see things differently. There's seasonal changes, operational You can always add more nuance and complexity to your thinking, rigour to your thinking. It's like, well, if we want to be ambitious with our revenue, what does that mean? And so I'd say that the best clinic owners, when it comes to their budget, consider those second and third order consequences. And I'll give you a real life example. If you want to grow your revenue, What that necessitates most likely is that you'll need more capacity. Well, you know, you might have some underutilized team members, but you'll probably need to recruit. And so have you factored in recruitment costs? Maybe there's some ad spend on LinkedIn or Seek. Maybe there's some meetings or interviews that you need to be having a month or two before that team member starts. Then we'll need to probably run that particular practitioner at a loss for a period of weeks or months while they are inducted on boarded and brought up to a sustainable caseload. Then we need to think about that caseload. You probably need a bolus of marketing. So maybe we need some more ad spend or referral nurturing. And then we need to think about the on costs of some of those cost of services provided. Maybe there's more linen that needs to be taken care of or some more furniture that's added to your consult rooms. You need to think about space. Maybe we need to think about moving to an additional office so that we've got rooms available. So there's all these, you know, maybe your culture day, your alignment days are substantial in size. And so one or two more people adds that. Do you need more admin support? What does it do to our software subscriptions if we need to add more users? So I'm not trying to add unnecessary complexity, but I'm saying when you aspire to grow your revenue, you must And the point that you and I have discussed over a long period of time, even internally, is that it's an ongoing improving capability or competency for us. It's not like you get the budget right and it's done, or like you've- The living document. That's a great way to think about it, right? It's a living document. In that case, specifically, Do you recommend clinic owners budget for an entire financial year, maybe even longer, or is it quarterly or monthly? Because I often get that question is like, okay, I'll sit down and do It's both and, not either or. And so I would say, yes, do a 12 month budget, but know that you're aiming for directional accuracy with your 12 month budget. but for your coming quarter, you should be more specific. So if we think about margins of error, perhaps your 12 month budget might have a plus or minus 10%. It could be, maybe it's more, maybe plus or minus 15%, but your three monthly quarterly budget, you should be fairly close to that. It should be plus or minus one or 2%. you know, all things being equal. So it's helpful to think about what are those acceptable margins of error. And so if you were planning out a five-year budget, you know, there is so much out of your control. Good luck trying to predict, you know, the next 12 months, let alone the next five years. So yes, it's prudent to do a 12-month budget, but also weight more heavily on the quarterly budget. Review monthly. Yeah, certainly. Because a budget is, it's all about course correcting, right? You know, you think about a pilot or a captain on a ship, is that they're gonna input their destination, but subject to weather conditions, they'll update their flight path. And that's really what a budget is. It's a flight path that's trying to get us from A to B, and we're trying to predict which path we might take subject to the conditions you might need to as the analogy goes, reorient yourself around a squall or a storm, or perhaps you pick up a tailwind, in which case you need to recalibrate. So it's all about just recalibrating one degree back on course and staying as close in proximity to Love that. We hear a lot of clinic owners who have uncertainty about their finances. Maybe they don't feel confident because they don't know. And maybe they feel some degree of embarrassment or guilt. They open up their accounting platform like zero and they're like, I don't know where to look. I just kind of trust the bookkeeper or the practice manager or the accountant to tell me what is and what is not. yet they have, you know, real scarcity with money. And it's like, these are the things you need to lean into as uncomfortable as it is to start to understand and realize that even if quote, you know, you're really good at it and mastered it, it's always an ongoing process of refinement and improvement. So yeah, especially if you're feeling a little bit tight with money, and you're not across these things, like this is the biggest area Right. So there's a couple of two key points that I just want to touch on. It is prudent. I use that word a lot, isn't it? That's a very financial word. It's very prudent to get external eyes on your finances. There is so much that you don't see. We are all susceptible to our own various biases. And so having multiple eyes on your finances is a good thing. It will lead to better outcomes. It will not lead to worse outcomes. You know, there is no downside and plenty of upside. So get some additional eyes on your budget. That's where advisors, mentors, coaches are so worth their weight. One or two observations and decisions can be the difference between 10, 20, 30, $50,000, just one observation. Uh, you know, I was actually talking to a clinic owner this week who we made that we made a$50,000 observation in their finances. And I said to them, we'll give nothing else. You've just paid for the next couple of months, a year, not months, years of coaching. Uh, you've taken, we've, we've solved that in one conversation. So always get external eyes. Now I I'm personally fascinated, Benny, that finances are taboo. Like we don't really talk about it much. And particularly as clinic owners, I am certain there are clinic owners listening here who, who feel quite awkward when it comes to their friendship circles or family. Cause you're not dealing in thousands or tens of thousands. You're dealing in hundreds of thousands or millions of dollars. And it's really hard. I just want to, you know, affirm that it is really hard to find the right circles to talk about finances in a safe place. And often why don't we talk about our finances with others? probably because we've talked about our finances with others and it hasn't gone well. And so what I want to encourage you is to get back on the horse and know that when you talk to trusted advisors, people who've been in the space, who've been there, got that, done that, got the t-shirt, who know what they're talking about and are values led advisors and mentors. The first thing that we do when someone opens up our finances, they thank you for trusting us and know that we're not going to tear shreds off you. We're actually going to find where you've done well. And we're going to work together to find some opportunities to improve this. This is a really gentle, kind, but very honest and direct. conversation that's done and it's done with, uh, with an awareness of context, you know, you know, your finances just better than we do. And we're going to walk alongside you to, to highlight and high five where the victories are. And also let's work together to find opportunities and to, to bring those to fruition. So I realized that speaking with your finances, speaking about finances with others is vulnerable. but it can be done productively, it can be done safely and it can be done in a way that's true to your values and that ultimately our finances are a vehicle towards a purpose and impact for our communities and for yourself and your family and for your team and so you know I think we have a moral responsibility, a duty of care to our family, our team, and our clients and community to create clinics that are thriving financially, that are sustainable into the future, that are profitable so that we can reinvest. And when you're profitable, know that you are solving real problems. You are progressing people's health. You are getting them out of pain. You're improving their function. You're adding value to their life. And so when you're profitable, you can sleep really well at night knowing that you're making a really significant impact in the lives of people around That's well said, JB. Talking about one of the better investments to make is in yourself and developing your capabilities and competency within those. We've got here one more thing on the docket, which was around learnings, recent learnings, sharp notes and super communicators. Well, you shared with me a little YouTube clip from Jeff Bezos on the Lex Friedman podcast. And Bezos runs by that principle of sharp notes and messy meetings. And something that, you know, you've been really helping me with is getting better with the written word. It's really easy to hide things in PowerPoint slides. You want to fluff around things with our verbal words, but put things in ink virtually, uh, makes it super clear. So get good with your note taking. And then in a meeting you can sort of, um, Bezos says you meander to the results in a meeting. We sort of, we navigate around unanswerable questions or hypotheticals, but it's the notes that matter. It's the written prep that makes the big difference. So that There's a quote, which I will definitely butcher and misattribute, which was along the lines of, um, you know, clear writing is a reflection of clear thinking. Yes. And in that six or 10 minute segment, we'll hook it up in the show notes here from the Lex for Evening podcast where Bezos talks about that. He was talking about how, you know, if you're presenting some information to a board, your leadership team, whoever it might be, and you're doing it in slide decks, you know, it can look quite pretty and we can use, you know, a lot of images, vectors, whatever, to make it look glossy. And it can literally gloss over the details that need to be addressed and talked about. Whereas when you put it into a written document, the emphasis or the challenges on the writer should be succinct, to be super clear. And so I found that really useful, especially that quote I keep coming back to. If I can't write this clearly, then perhaps my thinking isn't particularly clear. Now, this isn't going to be especially useful for maybe some of the smaller clinics in a management reporting function, where it's you and maybe a couple of teammates. But if you've got a bigger clinic, leadership team, maybe an advisory board, coach, whoever it might be, and you do need to generate reports, how'd we go this month? How'd we go this quarter? How'd we go against our budget? Where are we headed as part of our vision or our strategy? One of my mentors said, you know, if you can't distill it down from six pages to one page to a paragraph, then you're not clear enough. So, yeah, that's something we're continually getting better at is communicating with specificity. I think we do that, though. as health professionals, I remember going through uni, right? And health school, you can't just say, you know, this part of the body moves in a certain direction. As an example, like you're a physio, I'm a pod by trade, apply this to whatever profession you are. I remember the tutors saying, we can't just say it moves in this plane, like specifically what degree and in what plane, and you're just getting precision of language. Yeah, to know then how you might assess and diagnose something. So I think the same is true in business. We're just trying to use the right terms, trying to be really specific and concise so Yeah, we often say that numbers tell a narrative and you can be picky and choosy with what you choose to highlight sometimes on a slide deck or a presentation. So we want to be as transparent as we can, as thorough as we can. And I love that word precise as we can. So that would be the sharp notes from Bezos. And then the second is a book, Super Communicators. I might butcher his name. My apologies. Charles Dewey wrote a book. He's doing the podcast rounds at the moment. He's written Yes, I recognize the name, even though you missaid it. Yes. And so I don't know how the best communicate, you know, he talks about trying to take conversations from superficiality to depth quickly. And that's really pertinent in a health care context. We want to connect and empathize and sympathize with Well, the big takeaway is He often will lead sessions where, you know, facilitates and keynotes, and he gets people to ask one another the question, when did you last cry? And it's that type of a question you could, we're all, I'm sure, answering that in our own minds. When did you last cry? And when you think about it, like that's a really meaningful way to connect with someone now. Yeah. Correct. Yeah. Tread lightly. This isn't a, maybe it's not a first date question either. I'd imagine. I, it's been a long time since about 15, 20 years since I last went on a first date. But the point is that connecting with people over values and experiences and behaviors is, uh, is key understanding the quest, the type of conversation that we're having. Is this a deductive conversation? Is this a social conversation? Uh, I guess in some regards it's relationship advice, right? Do you want, do you want me to fix this or do you just need to be heard? Uh, so really interesting book about a lot of the principles are similar to, um, Robert Cialdini's influence. book, which is just one of my all-time favorites. But yeah, That's a good question. You know what? Here's what we're going to do. I do wear pants. I'm just standing up on the podcast. I have about 50 of these things left over. There is, if you're tuning in on the audios, these are from the Imperfects, Hugh van Cuylenburgh, trying to get him on the podcast, if anyone knows him. Naive. I Yeah, exactly. We're not a priority. Great book, obviously, Shane Davis and the Profeet team sort of introduced that to us. What's the book called? Oh, the Resilience Project. That's what it's called. And these are the cards. So it's just like, OK, maybe I'm not going to ask, when did you last cry to a team member? But it it So here's the thing. So I'm going in all sorts of directions here. If you send an email to me, bennettclinkmastery.com, with a screenshot of your review of this podcast, please give me five stars, we will send you a pack of these. These are probably worth 25 bucks, 40 bucks. More, keep going. Oh, gee, yeah, I wasn't part of that invoice. But anyway. I'm speaking to the finance manager. Anyway, you can see the deck here, but we've used this at our own internal retreat, CM team retreat, and on it are questions that you can use to create that vulnerability. Look at me, spruiking his own. He better come on the podcast now. I'm giving these out. Yeah, we'll send him the clip of the reel. Yeah, come on. Come on, Hugh. Come on. Anyway, so anyway, the top question was, what secret about yourself do you wish wasn't a secret anymore? Gee whiz, that could open a can of worms. But anyway, the idea is that you're vulnerable or you create a space to share something that perhaps wouldn't ordinarily come up when you're talking about the weekend and the kids and whatever, whatever. So anyway, I've been left with a heap of these, so you'd absolutely help my stock management. Send an email to ben at clinicmastery.com with a screenshot of your review of our podcast. You can go to Spotify. You can maybe give us a Google review anywhere. This is Apple podcast. I'll send you a pack of these you can do with your team. There you go. I didn't plan that at all, JB, but I'm dealing with the inventory I didn't approve this by the finance department. We're going to do that anyway. This is a great gift. Tip for tap. JB, we might put a wrap on this episode. We have something in the works that's coming for this podcast that is, yes, going to be launching very soon. And we're very excited to share it with you. So stay tuned. and keep us at the top of your feed. J.B., Don't be scared of your finances. Don't be scared of your finances. Get amongst it. It's okay to be a novice. It's a good productive thing to learn something new. So embrace the mess, embrace learning, enjoy the process. Figuring out your finances is daunting and hard, but finance can be fun, Ben. And I'd encourage people to find the fun in your finances. That's I have learned to smile through my teeth and agree with you. Finance is fun, everyone. All right, we'll see you on another episode Thanks for tuning in to the Grow Your Clinic podcast. To find out more about past episodes or how we can help you, head to www.clinicmastery.com forward slash podcast. And please remember to rate and review us on your podcast