Business Math for Physician Entrepreneurs: Mastering Different Business Models

Hi docs , welcome to the EntreMD podcast , where it's all about helping amazing physicians just like you embrace entrepreneurship so you can have the freedom to live life and practice medicine on your terms . I'm your host , dr Imna .

One of the reasons why businesses struggle the most is that the entrepreneurs do not quite understand the math of business , and today I'm going to be walking you through understanding million dollar math . Okay .

Now , the reason why this comes up a lot , especially for physicians , is we are helpers at heart and we have not actually been trained to look at the numbers and make any data-driven decisions . We just make decisions based on the kind of help we want to offer people , and then the pricing and the volume , and all of that is an afterthought .

Now , of course , within a hospital system or an employed system and things like that can work because we're shielded from the money . When you own a business , you have to look at it completely differently , because business is an economic sport . Okay , business is an economic sport . You want to remember this .

Now , does that mean we put profits and numbers ahead of people ? No , of course not . But it doesn't also mean that we get to disregard the numbers , okay .

So we put people first , we put numbers second , but numbers are right there , and once you understand how to marry those two things , entrepreneurship becomes so much easier not easy , easier becomes so much easier and you can really show up authentically , putting people first but then building an entity that is profitable so you can continue to stay in business .

And whether you are starting up , you are your first year of business or you're a veteran , it is very critical that you understand this , because I have been a student of business long enough to know that the fact that a business is bigger or more established does not mean it's more profitable .

We must understand the rules of the game , and that's what we're going to be looking at . Okay , so let me start off here . Someone may say , okay , why a million ? What's the thing with a million ? Well , I mean a million is a nice number .

When you factor in taxes , payroll , all of those kinds of things , it comes to a pretty decent number that you can take home . But if you don't want to do a million , you can take a zero off . If you're like Dr Una , I'm already at the 10 million , then you add a zero . Okay , but this is just .

You know , there's lots of zeros and it's easy to do the math with zeros . Now I wanna play let's play a game here a little bit okay , and I love gamifying entrepreneurship . People say , oh well , if you have a $97 product , you can never build a successful business , and that is not entirely true . Okay , think about your Netflix subscription .

Right , it's not a gazillion dollars . Somebody may say , well , if you charge really high , you're not going to get enough people to say yes to you and you're not going to be able to run a successful business . This is not true either . Okay , so let's look at million dollar math and let's just look at it as pure math , like a pure equation .

If I sold something for $1 and I figured out how to sell it to a million people , and you may say , well , how can you find a million people ? Well , let's say that I had a book . That was a book written for the general population , not for physicians , and it was a really fun book .

And it was Christmas time and I was going to sell it through Walmart , but Walmart really wanted it . They could easily distribute a million copies and I'm like I just want a dollar per copy . That's a million dollars . Do you see what I'm saying ? So just roll with me here . Let's look at it as pure math , no arguments , no stories around it .

So I can sell something for a dollar to a million people , and that's a million . I can sell something again . We're just moving zeros . I can sell something for $10 to 100,000 people , and that's still a million . And you can say where would you find 100,000 people ? There are a million physicians . What if I touch 10% of them ? Just roll with the math here .

I can take something that is $100 and I can sell it to 10,000 people . That's a million . I can take something that is $1 , I can sell it to 10,000 people that's a million . I can take something that is $1,000 and sell it to 1,000 people , and that's a million . I can take something that's $10,000 and sell it to 100 people that's a million .

I can take something that is $100,000 and sell it to only 10 people , and that's a million . I can take something that's a million and sell it to one person and that's a million . Right , and the reason why I took the time to do that is because I want you to see there are many ways to get to a million dollars .

But understand that it was a tight equation . I could not say , oh you know , like I want to sell something at $1 and I want to sell it to one person and make a million . That is not the way this works . It is an actual equation . The same way , I can't say you know what ? Two plus two is 17 , is 17 . How did you get there ? That's what I want .

That is not how this works . Okay , and once you can get this , once you can start thinking this way and understand there is an equation and there are laws to the equation , then everything becomes better . So the models work . So many different models work , but you have to play according to the game , okay .

So , for instance , what you will notice is the lower the dollar amount was , the higher the volume , right ? The higher the dollar amount was , the lower the volume that I would need to serve to get to a million dollars .

Now , there are many business models , but I want to make it really simple and we're going to look at two , right , like it's just a way of thinking and please roll with me here .

Okay , so if I decide , you know , I want to serve a certain audience and I decide that what I want to charge for my service is $100 , but I want to make a million this year , what I am saying is I want to charge $100 and I'm willing to do the work of selling this to 10,000 people . So it is a low ticket , it is high volume .

I cannot say that I only want to sell it to a hundred people and it's a hundred dollars Okay , because that is going to give me $10,000 for the year .

But what happens a lot of times is people pick these kinds of numbers and at the end of the year or the end of a quarter they're frustrated and I'm like but if you do the math , there's no way the math was going to take you to your goal . The goal and the math don't line up . They don't line up at all .

Okay , okay , if I said that , you know I really want to . You know , take the time , invest a lot in my people , serve them at the highest level . It doesn't mean you can't serve at the highest level for low ticket . But you know , not like , I want to have high touch points and all of that stuff and I want to .

You know , I want to charge $20,000 for what I do . Okay , that's , that's okay . You , you , you can get away with it . Right , I want to charge 20 , $20,000 is what you're going to have to do . I'm not the exact number , but a higher ticket , because what you're saying is I want to serve a smaller volume of people .

So , in a broad sense , what this means is , if I want to go low ticket , there's no problem with it , that can work , but I need to go high volume for the equation to work . It is an equation . It also means that if I decide that I want to go low volume , then I have to go high price to get to that equation .

Okay , now you may say , yeah , I set my goals for the year . It's a million , or it's not a million , it's less than a million , whatever .

But whatever that goal is and whatever you've decided your model is , you want to reverse engineer it , okay , and then say , okay , based on what I've decided my goal is and how I want to work or how I want to price , this is what is required of me . This is a requirement . This is not a suggestion .

You don't get to do it if you like and not do it if you don't like , okay . So if you say I want to serve just a few people , you're saying I want to do high price . If you say I want to do high price , if you say I want to do low price , you're saying I want to do high volume . End of story , okay , all right .

So now , if that's the case , then I want you to think . You know there are different types of challenges that come up based on the model that you pick . Okay , so let's talk about that for a second . So if I decide that I only want to serve a few people , that means I'm also saying that I want to be high price .

Now , if I want to be high price , where do I anticipate the challenges would be ? Well , the first challenge that I see a lot with that is the money drama around racing prices , right , and I talk to doctors a lot and I serve a lot of doctors and I've done this for a lot of years . So a lot of times there's money drama that comes up .

It's drama around you're a greedy doctor , how much is enough ? You're manipulating people and taking their money . This is something that is simple for you to do . So why are you charging so much for it and all of that that comes up . So if you're going that model , if you are in that model , I need you to understand .

This is a challenge that comes up and a lot of times . Every time you raise your prices , the challenge rears its ugly head again . And so now you're savvy , you know that's what's coming , so you prepare for it . Okay , how do you prepare to overcome the mind drama that shows up because you're charging maybe higher than somebody else would ?

So , for instance , one of my clients she is a direct primary care doc . Her first year she did over $500,000 in revenue and she's a little higher price than her peers . And there's a lot of guilt . She got guilted many times . People say how can you charge that much ? And all of those kinds of things . And that's on one side .

And there's the internal money drama . There's drama everywhere . Right , she was able to own it . She was able to own what she did in an ethical , authentic way , and then she built the business that she wanted to build . Okay , so if you know that that's going to come , what do you do ? Well , I'll give you a few things you can do .

Number one is really leaning into the value of what you do . Okay , because the kinds of people who will go high ticket are the kinds of people who typically place more value on the ROI than they do on what they're paying . Okay , so , for instance , when I want to work with somebody , I am not necessarily thinking about the sticker price

. I am not necessarily thinking about the sticker price . What I'm thinking about is this is the value I want to get , this is the return on investment I want to get , and this person has either done it for themselves or done it for themselves and done it for so many other people .

There's a clear path and I go for it right , because I know that whatever I'm paying is an investment and I'm going to get a huge return on investment . So I'm willing to pay right . And so there are many things that I pay really high value for and I'm not bothered by the price . I don't talk about the price .

I don't talk about that because , the same way , if I'm going to go buy real estate , if I see the path to ROI or I'm going to go invest in stock , I see a path to an ROI . I'm not crying over what I'm investing right . I'm not crying about that at all . What I'm focused on is oh my goodness , look at this return that I'm going to get .

So , when you're going to the high ticket arena , those are the kind of people that you're typically talking to . So you need to be clear on what that ROI is right , and so let me use myself as an example . I run the EntreMD Business School , one of the greatest honors of my life .

We've done that for almost four years at this point , and it is not low ticket . It is not low ticket by any chance . However , when people come into the school , they make that transition from physician to physician entrepreneur . They build a brand that is profitable . They're people who build businesses .

They come in , they do their first hundred thousand , first multiple six figures , first seven figures , first multiple seven figures . They're able to do that they're able to . They learn how to build teams .

They're building these teams and buying their time back , time that they use for themselves , times they use to rest and refresh and recharge , times they use to spend with their family . They put themselves in a position , especially those who've been in we call them EBS masters , who've been at it for a minute .

They're the people who also have set up businesses that are entities that can run without them . So , say , there's a death in the family , they're able to go and take care of their family and do what needs to be done .

Meanwhile , their business is still running because they've built the teams , they've built the systems and all of that , and so the return on investment is huge . The personal transformation is so dramatic that there are people who are like I wonder if I should renew ? And their husbands , their spouses , are like oh , my goodness , you're a completely different person .

Of course you should renew , of course you should do another year . These are all the things . It's not just oh , when you come , you learn about business . You see , I can trace it all the way to the impact on their marriages , the impact on their kids . Many of them , their kids , are learning so much about entrepreneurship . They're reading the books .

Their parents are reading all of that stuff . It's so amazing . They have these successful businesses . They're building teams , they're able to take time off , they have a community of people they can lean on . Where there's no competition , there's a lot of collaboration . That's all they get . Do you see how ? That's very different from you . Know what will you get ?

Well , what happens when people work with you ? They build profitable businesses . I'm able to trace it all the way . So the profitable business , so what right ?

And the more you lean into that , the more you're able to fall in love with what you do and you can say , like so , if someone pays 30 grand to be in the Entree MD Business School but in the end they turn out like that , like the ROI is , it's priceless , right , and so I don't feel bad . I don't have the drama around doing what I do .

Okay , you could be somebody that your lifestyle medicine and maybe you have a , you have a concierge style practice or your lifestyle medicine , but you use a coaching model and you're high ticket . It's not just about I help you transition to a plant-based diet or I help you figure out your diet and your exercise or whatever you want to trace it all the way .

Finally , the weight that you've been trying to get off for X number of years is coming off . You feel like you're in control . You're no longer like a victim of your diet . You feel stronger than you've ever felt . You're able to sleep better . You feel so good in your skin , like in your skin .

Your skin is glowing , you're able to run around with the grandkids and the kids . You trace it all the way , right ? You trace it all the way , and because you've learned these things , it's affected your spouse , it's affected your children , and so not only are you in a healthier space , you're leaving a legacy of health . Do you see what I mean ?

Like , you trace it all the way . The more you do that , the more you see I'm not overcharging , I'm not overcharging . I'm not overcharging . What I'm charging is an ethical price . So that's one of the things that you would do to fall in love with that .

The other thing that you would do is I don't know that there's any amount of mindset work you do that will completely eliminate the drama . It would just help you hold it together . But one of the best things you can do is then start charging , and sometimes you know the way I look at it is this charge what you are uncomfortable charging .

So maybe you decide that , ultimately , what I do , I want to charge $10,000 for it . Right , but you cannot even possibly bring yourself to charge $10,000 . You can comfortably charge 3,000 and 5,000 will be a stretch . Go for 5,000 , right , like , rather than doing nothing . I've seen people do this where they're paralyzed .

I know I should charge this , but I can't . I'm like , who made these rules ? Like , what are you doing ? Right ? Like , charge what you're uncomfortable charging so you want it to be a stretch , you don't want it to be a break . So if 10,000 paralyzes you , 5,000 stretches you and 3,000 is comfortable , go for 5,000 , right .

And after you serve a number of people , go for 7,500 . Serve a number of people , go to 10,000 . Where you were going anyway . Right . But I would rather do that than not do anything at all . I cannot tell you how many people just live in an undercharging world because they cannot bring themselves to do what they think they can .

But there's a whole middle ground . The idea is to be uncomfortable . If you're uncomfortable , you're growing . There's a lot of money drama that goes with a high ticket . So fall in love with your offer . Charge a stretch price regardless .

And one other thing is when you're communicating , articulating what you do in the market and all of those things , you're not articulating based on price , because your people are not price shoppers . You're articulating based on value . If you work with me , this is what happens . If you come to my concierge practice . This is what happened .

If you sign up for my coaching thing , this is how your life will be different . This is the pain . This is how life will be different , because what they pay for are not the things that are cheaper . They pay for the things that give them what they want . Okay .

So if you are in a high ticket model , you're constantly talking about discounts and all of that they're not those kind of people . They're just not those people . Okay , that works more with the low ticket model , not as much with the high ticket model they're looking for .

Okay , if I am looking for somebody to work with , to create and let's say I wanted to I decided this is the year that I'm working on my nutrition and I want to treat my body like an athlete would treat their body . I want to treat my body like it's a machine , like it's a tool , and I want to nourish it properly and all of those things .

I am not going to go for the cheapest person who can help me do that . I'm not going to do that . I know the result I have . I know I want to be a peak performer . I know I want to be strong at 90 and all of that . So what I'm going to do is look for the person who's the best of the best .

I'm not expecting the best person to be the cheapest , so what I'm looking for . So if I'm reading someone's copy I'm following somebody on social media , I'm reading their emails or whatever what I'm looking for is does this person have the expertise ? Have they helped other people do this ? What are their philosophies around nutrition and all of those things ?

That's what I'm looking at , not primarily the price . So you have to get really good at articulating value , value , return on investment , value this is what can happen . Value , return on investment , because I would care much , much less about the price . I would care a lot more of . Can you take me there ?

Can you help me nourish this body in such a way that I will be strong at 90 ? Can you do that ? That's what I would be after . Okay , okay . So that's where we tend to have the challenge with the high ticket model is the money drama . Don't ignore it , don't pretend it's not .

You Don't say , oh , I've overcome that before , because a lot of times , every time , every time you come up there , it will show up again . Okay , now for the low ticket model . Does it mean , oh , we don't give value , we just charge low ticket . Of course not . Okay , we give value all over , but that buyer is a little different , okay .

So , first of all , if we decide we're going low price , we are going high volume . And so if you think about it say primary care , private practice , that is a low ticket model . Right , you're talking $130 , $150 , $200 average payments per encounter . It's a low ticket model .

And so this is why when people tell me I'm in an insurance model , I'm primary care and I really want to take my time with my and I'm not saying , don't take your time , I'm going somewhere , I want to take my time with my patients and I only want to see a patient an hour . Well , let's do the math , okay .

So if you're getting $150 per patient and you decide I want to see a patient an hour and you work for eight hours , two hours that would be $300 times two , that's $600 . Did I get that right ? $150 an hour for four hours is $600 . So that's $1,200 a day . Now , many private practices like I've surveyed a lot of private practices , I've looked at the data .

They're looking at overhead of 50% . So before your salary and all of that , your overhead is already $600 before your salary . So the question is is that sustainable ? And the answer to that is no . The answer to that is no , and so it means that the volume has to be there . You might say , okay , but what of the care ?

That is where you need to start thinking about efficiency , thinking about systems , thinking about processes and all those things , which is a completely different conversation which I think we're going to come back and have . But it is a high volume model . Okay , it is a high volume model . Is there a way to make it work ?

Absolutely , there is a way to make it work , but it's a high volume model . So let's just talk about the equation here . Okay , now what is the biggest challenge that I see in the high volume model ? It is marketing . Now , does it mean that the high price model they don't have to market ? They do have to market .

But it is even more critical for the low ticket model , like marketing , marketing , marketing and marketing for volume , right , and so that means that we're extroverting into the marketplace quite a bit . It means that we're building a referral base . We don't have time to slack on the volume , on the marketing for volume , we just don't .

And so if you run a private practice especially your primary care insurance model , all of that stuff and you're like I don't like marketing . I want to invite you to like marketing and I'll tell you this when I started as an entrepreneur , when I started medical school , that was great . But before that I did not like biology and I was

like I don't like biology . But the problem is there is no pathway to medical school without biology that I know about . Okay . So what did I have to do ? I had to like biology because I'm like , oh , I don't want to read about amoeba and all these weird things . Like I just want to be a doctor , Good , good . The pathway to that is biology .

The pathway to success in a low ticket , high volume model is marketing , marketing , marketing , marketing and more marketing . And if you don't like it , I invite you to like it and I invite you to learn about it and I invite you to decide . You know what ? I'm going to master this stuff because you can .

You can become really good at it and you can build a system and you can build a marketing system that runs without you . But you just have to get out of resistance and embrace it and go like marketing is my thing . Marketing is my thing , marketing is my thing , and so I hope this has helped you look at your business very differently .

So , first of all , decide how much it is you want to make . Decide whatever it is . However you want to operate . You want to serve a few people or you want to offer something at a low price ? Understand that by choosing that , you've chosen something else . So if you choose low ticket , you have chosen high volume . They're twins , they're Siamese twins .

They go together . If you have chosen low volume , you've chosen high ticket . Those two things go together . They're Siamese twins . Okay . So I want you to understand that . I want you to understand the challenges that tend to come up with those two models and decide I am going to overcome them . I am going to be a rock star . I work in both models .

My private practice is low ticket , high volume . And then Entremd is high ticket , lowish volume . It's relatively low volume , right . And so both models work . Both businesses are doing really well , but they're different models . So your model can work , but you must play by the rules . You must anticipate the challenges , get ready for them , overcome them and win .

I'm inviting you to win . I'm inviting you to win . Whatever model , that is Okay . So this is your homework . I want you to go . I want you to run an audit Like what model is your business in ? Are you obeying the rule , right ? So if you're low ticket , are you high volume ?

If you're high volume , if you're , if you're low , low volume , are you high ticket , right ? So I want you to audit and say am I playing by the rules ? Am I playing by the rules ? And I want you to anticipate the challenges and I want you to start strategically , proactively overcoming those challenges so you can thrive .

Let me tell you , the physician community needs people like you you listening to me to thrive and be an example of what is possible . There's so much of a narrative that private practice is dead . It's not , and you can be the example of what is possible .

There is a narrative that , oh , you can't even replace your physician salary as a physician coach , which is a lie , and somebody's waiting for you to be the example of that . There's so many narratives around . We cannot build really great businesses . We cannot build businesses . We can sell at a premium , and it's not true . We can learn to do these things .

We can learn to do all of these things and you're learning that . I want to invite you to implement what you are learning so you can be a bigger and bigger example of what is possible . You can be a vision board for the physician community , because they need to see you thrive . So I'm inviting you to do just that . I'm inviting you to do that .

I'm rooting for you as you use this to create changes . I want you to you know you can send me a PM , dm , let me know like , oh my goodness , dr Una , you will not believe what just happened and I'll say uh-huh , I will believe it . Tell me all about it . Okay , all right .

So , as someone who loves physician entrepreneurs , I want to invite you to take this episode , share it with all the doctors in your life , because it will absolutely change their lives , and I will see you , my friend , on the next

episode of the Entrepreneur Podcast .