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Where Did the Money Go? Why Private Practice Owners Struggle With Profit (And How to Fix It)

  • Jamey Schrier
  • July 1, 2025
  • No Comments
  • Money

You’re bringing in more patients. The schedule is full. Revenue is up. So why does it still feel tight?

Why are you stressing over payroll? Why are your margins razor-thin? Why does it feel like every month, no matter how much you make, there’s never quite enough left over?

I’ve had this conversation with hundreds of practice owners and lived it myself.

Let me say this plainly: you don’t have a revenue problem. You have a profit problem. And more importantly, you have a visibility problem. Because until you can see where the money is going, you’ll never be able to control it. (Investopedia)

This post is about solving that. With clarity, not complexity.

Most Practice Owners Focus on the Wrong Number

 

In private practice, the pressure to grow is everywhere. More patients. More visits. More providers. More space.

You look at the top line $1M, $2M, maybe even more and expect that to translate into personal income, flexibility, and breathing room.

But the top line is just that — the top of the funnel. There are still salaries, rent, marketing, software, taxes, and a dozen other expenses eating away at your margin.

What matters isn’t what you collect.

What matters is what you keep.

And most practice owners don’t know what that number actually is. Not month-to-month. Not in real time. Not clearly enough to make smart decisions.

Profit Doesn’t Happen by Accident

 

Let’s be real: most of us weren’t trained in financial management. We learned how to treat patients not how to run a profit-first operation.

So we do what we were taught: work harder, grow bigger, and hope it all works out.

But here’s what that actually creates:

  • Hiring more staff without a plan for ROI
  • Taking on more expenses to “scale” without knowing your real margins
  • Getting paid last — if there’s anything left

Sound familiar?

Profit is not a byproduct of revenue. Profit is a decision. It requires structure, discipline, and a clear plan for how you use the money your business generates.

So Where Does the Money Go?

 

There are 3 big reasons I see profitable-looking practices struggle with cash:

1. No Profit Plan

Most owners don’t assign a role to each dollar. The money comes in, the bills get paid, and what’s left is called “profit.” But that’s backwards. Without a plan, expenses expand to fill whatever you make. (International Journal of Business Administration)

2. Overhead Creep

You hire more people. You sign a longer lease. You stack up software and services. And it’s all justified as “growth” but none of it is measured against profitability.
Overhead slowly balloons until there’s nothing left.

3. The Owner Pays Themselves Last

You’d never let your employees go unpaid, but you do it to yourself all the time.
You defer your own compensation, thinking it’s temporary. But months (or years) go by and you’ve created a business that doesn’t serve you.

That’s not sustainable. And it’s not freedom.

The Fix: Create a Profit System That Works

 

The good news? This isn’t about being a financial wizard or building spreadsheets that scare you. It’s about putting in a simple system that gives you clarity and protects your profit.

 

Here’s how to start:

1. Pay Yourself First

Decide how much the business should pay you as an owner, not a clinician. That’s your starting point. Reverse-engineer the business to support that goal, not the other way around.

2. Track Real Profit Monthly

Work with your bookkeeper to generate a monthly P&L that shows actual profit not just revenue. (NCBI / PMC)Better yet, set up a simple dashboard so you can track:

    • Total revenue
    • Total expenses
    • Owner compensation
    • Net profit

Knowledge creates control. You can’t fix what you can’t see.

3. Separate Profit From Operating Cash

Use a system like Profit First, where you move profit into a separate account before paying bills.
Out of sight, out of spend. This one habit changes everything  because it forces you to run the business on what’s left, not what’s available.

    1. Audit Overhead Quarterly

Go through your expenses every 3 months. Ask:

    • Is this necessary?
    • Is this delivering ROI?
    • Could we do this differently?

You’ll be shocked at what you’re paying for and what you can eliminate without any loss of performance.

What Freedom Looks Like

 

Here’s what happens when profit becomes the priority:

  • You pay yourself consistently
  • You make decisions with confidence, not anxiety
  • You build real reserves, so you’re not living month to month
  • You stop chasing growth just to stay afloat
  • You finally feel like the owner, not the operator

That’s the shift.

It’s not about grinding harder. It’s about getting honest, taking control, and building a business that funds your life — not consumes it.

If your practice is growing but your bank account doesn’t show it, you’re not alone. But don’t wait for things to magically “work out.”

You can be successful and broke. Or successful and free.

It starts with clarity. And it starts with choosing profit — on purpose.

————————————————————-

Are you ready for a coach? Join the hundreds of physical therapy owners who are building the practice of their dreams with the support, guidance and direction of a Practice Freedom U Coach. Take the first step towards creating a business that sets you free by scheduling a Discovery Call

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