00:00:04:11 – 00:01:01:22
Jay Shorr

Welcome to Shorr Solutions: The Podcast, and I’m your host, Jay Shorr, CEO and founder of Shorr Solutions. We are a team of national and award-winning practice management consultants with experience running a multimillion-dollar cosmetic, dermatology and plastic surgery practice.

We’re here to share strategies and insights that will help you grow your practice efficiently and profitably. In each episode, we’ll explore the steps and actionable insights to guide you through your journey to increase efficiency, boost revenue, and decrease costs. Tune in and discover how to improve your patient experience and take your aesthetic practice to the next level.

This episode of Shorr Solutions: The Podcast was originally recorded as a webinar. However, we felt this information was too important not to share with you, our podcast listeners. So we hope you enjoy.

00:01:01:24 – 00:04:42:20
Jay Shorr
Welcome, everybody. Thank you for taking a part out of your day. I know how busy we all are. I always say if it wasn’t for the client, if it wasn’t for the patient, we would get a lot of work done, right? So once again, I my name is Jay Shorr and I am the team leader, founder of Shorr Solutions. And we specialize in theaesthetic cosmetic and surgical med spa arena for dermatology, facial & body plastics, cosmetic plastic and gynecology, surgical centers and med spas. Like I said, and today’s webinar is being broadcast live. And today’s title are the top eight ways to save money in your practice. Now, does that mean that there are only eight ways? No. Of course it does it. It means that these are the top eight and they’re my top eight. And there could be many, many more. And those people that are listening to it live, those people that have the opportunity to listen to it via broadcast on a podcast without the video, a lot of people tell me they listen to it when they’re driving. A lot of people tell me they listen to whether walking. A lot of people tell me they listen to when they can’t sleep, because it certainly can put you to sleep. For those of you who weren’t laughing, obviously that was really meant to be a joke. But there are so many ways to save money in your practice. And I have an old saying that says revenue is beautiful. But however, every dollar that you bring in as revenue, if you’re lucky, 30, $0.35 of that make it to the bank. However, for every dollar that you save in your practice is a 100% margin dollar and you can take it to the bank. So I have no disclosures to make on anything that I’m going to be speaking about, because I’m not going to be mentioning any specific type of vendor by name. And if I do mention a vendor by name, I’m also going to mention its alternative or its competitor, because many of the lectures that I do recommend and you can’t do that. So today we’ll start it out is are you doing everything that you do and that you do you work within your practice? Are you keeping your expenses under control or are you running on empty? So what does that really mean? Does it mean are you running by the seat of your pants? Are you running day to day instead of having a plan? And if you don’t have a plan, the failure to plan is the plan to fail. Look, I’m full of all these adages. I never made them up, but I also never stole an idea that I didn’t like. So I use these particular adages on lines because if you don’t have a plan and you run by the seat of your pants, you are naturally running on empty because you don’t know from day to day, week to week, month to month, quarter to quarter, year to year where you’re going, you have to have a plan right now, whenever you’re listening to it. This is May. You should be having your third quarter because it ends, you know, July starts our third quarter. You should be having third and fourth quarter plans already ready to determine how you’re going to save money. And we work with clients throughout the U.S. and Canada to help them save money and more importantly, review that.

00:04:42:22 – 00:12:01:24
Jay Shorr
So let’s talk about tip number one. So tip number one is negotiating your existing vendor fees. What vendor fees are they. Well there’s all kinds of vendor fees. The number one fee is credit cards. The number two could be biomedical hazardous waste. The number three could be capital equipment and supplies. So let me share one by one how we can review this. Most people will say to me, yes, I know what fees I’m paying for my credit cards. And I say, I bet you really don’t. Why do I say that? Because there are so many fees for credit cards. The credit cards can be the interchange. Interchange. Plus you could be charged all kinds of what they call PCI compliance. You could be charged for Nabu. I’m not even sure I’ll explain what they mean, but the bottom line is, if you take the total amount of revenue that you generated and what the fee is that you have to pay to your merchant processor, you take that fee and you divide it by the revenue, and that will give you an actual percentage of what it is that you’re paying. Now, most people don’t know that you pay more if you accept corporate cards, you pay more. If you accept international cards, you pay more. If you accept cards that are affiliated and associated with points, perks, and promotions. That’s what I call it. The least fee that you will pay is if it’s a debit card. When you have the option to chip, tap, swipe. That reduces the fee that you have to pay, because the credit card companies feel that it is a more secure type of a credit card because the card was present. So when the card’s not present, you pay more when it’s associated with a point in permanent point and promotion like rental cars and airlines and hotels. And everybody loves points. Everybody loves points because they’re not taxable yet. All right. The second part of that is biomedical hazardous waste. I’m not going to mention any names. However there are hazardous waste, biomedical hazardous waste vendor providers that have very very high rates. They try it and they try to sell you on the numerous amount of pickups that you really don’t need. So you’re paying, even though a box or a sharps container may not be full. They’re making that pickup anyway. They also have an annual escalation fee, kind of like rent when you’re renting from a landlord. And they also have three year terms. And that what you don’t realize is that if you don’t tell them your intent to cancel by a certain time, it will automatically renew, and you will play havoc in getting that canceled even if you’re one day late. So my recommendation with many of these types of contracts that you have that are self renewal is to diary that in some type of a system that lets you know it’s time to either renew, formally renew or cancel, and then that interim before you sign these, these type of contracts, check with others, see what it’s bundled with. Is it bundled with OSHA training? Is it bundled with other types of legal representation? Is it bundled with workers comp training? These are many things that in biomedical hazardous waste companies do. We do these trainings. But I don’t want to compete with biomedical hazardous waste if that’s included in your program. But make sure negotiate that the best way you can because it is negotiable. What you can negotiate are the frequency of the pickups. How often do I need my biomedical hazardous waste pickup? Does it come with the boxes? Does it come with sharp containers? Most of them are going to say no, but you can negotiate so you don’t have that extra fee. Now, when it comes time to purchase capital equipment, don’t accept the first proposed fee. I do a wonderful lecture on negotiating the top 60. I’m always doing the top five, six, eight, ten and people have to know the level of authority. So when capital equipment means could be EMR, capital equipment could be the big box lasers that you have. And it can be then be, you know, tabletop equipment, radio frequency. Like I said, I’m not going to mention any names, but don’t accept the first proposed fee that is offered to you because there always can be a better deal. A lot of times when you’re at a conference, you may hear it’s a show special. Well, and if you don’t purchase it at the show, you won’t get that deal. Please always remember, I do a dozen shows a year, so there’s always a show special. I’m not trying to say that the vendors aren’t being honest. They certainly are. However, you know, many times they’re at the show and they want to get these sales done, try to save money because if that is truly the best deal, but you have to know that it’s the best deal, and what you don’t know can hurt you more than what you do know. So when it comes time to purchase this equipment, you need to be able to negotiate delivery fees. You need to negotiate warranty fees. You need to negotiate a training phase. You need to negotiate maintenance contract fees past the original OEM maintenance. And what happens if there is a problem with the machine? Who pays for it to go back? Some people might say, well, we have a technician that will come, will negotiate that the technician has to come within 24 hours or that you’re given a free loaner. Because remember, when you buy capital equipment, if you are financing it and the machine goes down or it’s out of service, you still have to pay the monthly fee. So what you need to negotiate early on with the vendor that is selling you the equipment is that if the machine goes down, they’re either going to provide you with a loaner or have it fixed within 24 hours. And if a tech comes to your office and goes to techs and they need a motherboard, or they need a part that the technician doesn’t have, that it will be overnighted. And if it can’t be overnighted, then you need a loaner. So all these things have to be pre negotiated because you don’t get a second chance to make a first impression. Remember, if you don’t ask, you’re not going to get it. And if you need help in negotiating ask professionals like us or other vendors can you help me in negotiating this piece of equipment?

00:12:02:01 – 00:14:43:12
Jay Shorr
Tip number two join group purchasing organizations. You may have heard the term g p o GPOs are governed governmentally. If it’s a true government group purchasing organization, I don’t mean it is run by the government. It means that there are certain types of GPOs that have to run and be honest and send reports to the government, but there are also buyers clubs. What are buyers clubs? Buyers clubs are companies that offer you group purchasing options, kind of like a Sam’s Club. Kind of like a Costco. Kind of like a BJ’s wholesale. All right. See, I mentioned three different competing companies. What they are are consumer buyers organizations where you can buy in bulk or you can get everyday savings predicated on the group volume that is being purchased by the vendor. So you can save on everything from medical devices to office and medical supplies. You can like Office Depot, staples, you know, other different types of supplies pens, table paper, sutures, gloves, needles, syringes. So many of the things are already allied with GPOs, and you can even get the benefit. Even if you’re a small practice, you can get the benefit of GPO pricing, but you certainly won’t get it if you don’t ask. All right, ask and you shall receive. Look, what is the worst thing that can happen when you’re doing a negotiation? The worst thing that somebody can tell you is no. They’re going to offer you the same price that you were quoted. That’s the worst thing that can happen, which isn’t so bad because that’s where you started from. Anyway. The best thing that can happen is that you’re either offered better rebates, you’re offered better pricing, you’re offered discounts. How how much better can you get? So tip number two, see if there are any GPOs. And when you’re purchasing something, I would ask your supply vendor example McKesson, Cardinal, Henry Shine, you know, any of the local, purchasing companies that you buy your, your capital equipment and supplies from, and if they don’t have a GPO or they’re not aligned with the GPO, they’ll tell you that.

00:14:43:14 – 00:21:10:06
Jay Shorr
Tip number three, examine what you’re paying for your current financing program. Look at alternatives to reduce rates. Now what financing program am I speaking about? Is it my business financing program or is it the patient financing program? The answer is yes. You’re scratching your head and you’re saying yes. What did you mean? I met both when I say yes to a multiple no question, it means yes to both. So let’s talk about your current capital equipment financing program. All right. So what’s very important is cost of capital. And what that means is that if you’re going to borrow money to either lease or buy something, then that is a financing program between either you and a bank, you and an angel investor, which I usually don’t recommend, or you and a third party financing company. All right. So you examine those types of payments. Is it amortized meaning that for the length of the loan lease 36, 48, 60 months, that there is a reduced interest and principal? Kind of like when you buy a mortgage or a car or something like that interest, you’re paying the most interest and it’s a lesser principal. And the more you pay, it evens out and about, you know, half way, and then you’re paying more off of the principal and less on the interest. That’s one way. Or is it a flat rate for the term of the lease or the loan? I’m not going to get into capital equipment financing and things like that. All the different types of leases and terms. That’s another lecture. So when you’re doing that financing, you want to know what is the best rate, what is the cost of capital, whether it’s 6%, 8%, 10% and the credit worthy that you are the lesser the fee that the financing institution, like I said, whether it’s a bank or a third party, in a leasing or financing company. One thing I really want you to be cautious of. Many times when you buy a piece of equipment, you may get a vendor that says, banks usually don’t do this. Financing companies do. They say, well, you know, pay $1, you know, for the first six months, or $99 for the first 3 or 6 months, you know, and then you could pick up your payments. I urge you to be against that 100%. Let me tell you why. If you’re that strapped for cash and you can’t afford to pay it, wait until you can afford to buy the machine. Because what ends up happening, even though you’re only paying a dollar or $99 a month, that’s only coming off of the interest, the principal has not reduced. So what’s happening to the remaining interest at the end of that, 90 days or six months, it’s all built in and you’re going to be paying instead of like $100,000. You may end up paying. Now your balance is $120,000, because the interest was not paid. You made a nominal or a minimum payment, and we didn’t reduce the principal and then add an additional interest that you didn’t pay up front. All right. So be very cautious of that. Try to take out loans and leases that if you pay a little bit more it reduces the principal. And therefore if you can pay it off early, you saved a lot of money on interest. One of the best types of financing programs that I like, if you can get these type from your bank, it’s called interest only line of credit. Now that rate will fluctuate contingent upon what the cost of capital is. And right now the cost of capital fluctuates. It goes up and down by the feds on what the interest rates are right now. So what is an interest only line of credit? A bank or a lending institution will allow you up to, let’s just say $100,000 was the number. Well, you have the option just to pay the interest because you don’t have the money right now. So if you just pay the interest every month, that’s what the interest only line of credit means. You’re never going to be reducing the principal. Therefore, you will be paying the same amount of interest every month. But in those months that aren’t so lean and you have extra capital, you can pay additional money and buy down the principal. Once you buy down the principal, it automatically reduces the amount of interest. Because interest is only predicated on the amount of principal of that note. So therefore, when you pay off a lot more money, if you need to just pay interest only in the future, it is a much lesser. Let’s talk about patient financing. So there are multiple types of patient financing out there. What’s the most popular care credit. Then there’s Cherry and there’s Alphaeon. And then there’s other ones that are subprime. When you can’t when you have bad credit. So what I say is there are terms that are six months free. Then you pay a fee that when you get into 12 and 18 and 24 months, then the patient has to pay a fee and you have to pay a fee. All right. So try to get it where it costs you less to offer that because sometimes you can reduce the fee for your procedure. If the patient has the money, many times they’ll be taking financing if it’s free to them for six months, 12 months. I only offered six months in my former practice because it was a lesser rate, all right, and the patient didn’t have to pay any interest for those six months. But be very, very careful because there are multiple types. If a patient doesn’t pay it that one month or misses a payment, they’re going to have to be subject to paying back all of the interest that was deferred during that period of time, and then it’s not so attractive anymore.

00:21:10:08 – 00:22:02:07
Jay Shorr
Let’s take a quick break. We know that maintaining a profitable aesthetic practice while managing all the moving parts of your business is challenging. While your passion and dedication lie in caring for your patients and practicing medicine, the same enthusiasm might not extend to crunching the numbers in your business. Well, here at Shorr Solutions, we can help you with your financial analysis. Our services are designed to help you identify opportunities for growth, reduce unnecessary expenses, and maximize your practice’s profitability. Whether you’re seeking to streamline operations, increase revenue, or gain clarity on your financial performance, we provide the tools, strategies, and expertise you need to succeed. Schedule your free consult with our team today to get started.

00:22:02:09 – 00:24:23:05
Jay Shorr
Tip number four utilize different types of marketing programs offered by your existing vendors. So what does that mean? It includes reimbursement and incentives for end of year quotas before paying for everything out of your pocket, and many companies will give you additional rebates. I call it the Hawking of the order of the quarter because, look, many of these companies are bound by stock held ownership and they want to see the numbers. So if you have a company that wants to offer you something, if you make an order, ask them, what are you offering me or you offering me more free product? Are you offering me a higher rebate? We all know a lot of the filler companies. The more you buy, the higher your rebate. Well, that’s a marketing program. Or they’ll offer you either free product or they’ll offer you a rebate, or they’ll offer you marketing dollars, co-op dollars that if you advertise their name, they will pay a percentage. It’s called co-op advertising. Not many do that anymore. It used to be something many, many years ago. It was done by a lot of companies, but once again, if you don’t ask, you won’t receive. So it’s very important that you utilize marketing programs offered by your existing vendors. So how do you know what they are? Ask. Ask every vendor. Do you have a marketing program for us to be able to market your product and promotion? And many of the vendors will say, we don’t have a co-op type of program, but we’ll be more than happy to give you free product or training vials because there are some things that are not allowed, like the filler companies aren’t allowed to give free product, but they can give training, all right. And that’s good because you’re training your staff. Now off the record, it depends what you get. Use it however you want and may be used to training vials. This is not CME so I don’t have any guidelines that I have to abide by in what I say. Vendor reps do. And if it’s CME you have to be careful with that as well.

00:24:23:07 – 00:28:27:16
Jay Shorr
Tip number five don’t let any any should be capitalized. Don’t let any contract go on, reviewed or negotiated. I don’t care how smart you are. I don’t care how savvy you are. Have a third party, whether it’s your accountant, your attorney or a consultant. Review these contracts and if you’re going to do that, I ask that you have somebody that is not just a contract attorney, but somebody that or an accountant. But if you’re going to use a consultant, use a consultant that knows the product and knows the industry and knows the vendor that you’re negotiating with, why? Because you don’t know what you don’t know. And negotiation of a contract I call it section two, subsection a sub subsection I into two point font. And you all know what I’m speaking about. These contracts are monstrous and there are pages long. And when I review a contract, I know exactly what to look for. I look for when does the warranty start? Does it start what the legal term the contracts are FOB delivery or Jay, what does that mean? FOB means as soon as it leaves the freight yard, wherever it’s being shipped from, that’s when your warranty starts. And Jay says not on my watch. The warranty starts when it’s delivered? No! When it’s delivered and uncreated? No. When it’s delivered, uncreated and trained and tested. Oh, wow. Why? Because I don’t want to know that the box sits there and has been ungraded and hasn’t been installed. My staff hasn’t been trained. Do you know this could be two weeks, a month, 60 days before that, and your warranty is already started, and then you find out that the machine is either D.O.A. or it has a fault and don’t believe that can happen. D.O.A. in our business that isn’t dead on arrival, and I’ve seen it happen. Shipping the lasers. The beams are off, or the compressor in a machine is off or the motherboard doesn’t work. You want to make sure that everything works. That’s part of it. And like I said earlier in this contract, you want to know that if it has to go back, what is my warranty? Can I negotiate free shipping? Many times not many times, yes. Can I negotiate that? If it has to go back? Great. Both ways. From my office to your shipping yard or your office and then back. And I’ve thrown away all the crating in the box. And if it has to go back, do you send a company to me that will recreate it? Because as you know, some of these lasers have to go on a pallet. Now, I reviewed you want to make sure that the contractor is reviewed because anything can be negotiated. All right. Terms and conditions I want to make sure that I’m able to get proper financing and that you put a down payment down. And the down payment only secures the terms and the conditions of the contract. All right. Because you don’t want to sign the contract until it’s been reviewed and negotiated. Because what’s the worst thing like I said, that somebody could say to, you? No. Then there are always more pieces of equipment to sell than there are buyers. As long as everybody does what they’re supposed to do. A deal is a deal. When it’s a win win for everybody.

00:28:27:18 – 00:32:50:22
Jay Shorr
Tip number six analyze your P&L, your profit and loss statement on a regular basis, and look for trends and disparities. So what is a regular basis monthly in the very beginning, don’t ever let it go by without being quarterly. So what am I analyzing? I’m analyzing that the numbers and the expenses are properly being categorized. So that I have my total revenue, minus my cost of goods sold. Gross revenue minus cost of goods sold. Also known as COGS. COGS cost of goods sold equals gross profit. Doesn’t mean you’ve made any money yet. And don’t dump every thing into cost of goods sold, because cost of goods sold means the cost of goods that are sold. So is a filler or a neurotoxin. Is that the cost of goods sold? And the answer is no, because you’re selling that treatment. So let me review that formula with you. Again. Gross profit means total revenue. That’s all the receipts that you get in from patients. All right. It doesn’t include rebates that you get from vendors. The rebates that you get from vendors should be a credit to the medical supply expense, because that’s really what it is. If it’s given to you off of an invoice, then you’re lessening the payment of the invoice, okay. But if you get it into separate check, it’s not revenue, it’s a reduction of an expense. So let’s say that again gross profit equals your total revenue minus your cost of goods sold, retail skincare products, things like that. Garments. If you’re a plastics surgery practice and you’re selling it, not treatments that you perform. The cost of a filler. The cost of a neurotoxin goes under medical supply is below the line. So gross revenue minus cost of goods equals gross profit. Then you have your fixed and variable expenses. Fixed expense means your utilities and your rent and your payroll. All right. And then all of your variable expenses are things that vary. All right. So you have your gross profit minus your fixed and variable expenses equals net profit. Net profit is what you take to the bank. And that is what you have to look for. Now everything below the line of gross profit and a P&L have categories. You’ve heard me mention medical supply, medical expense, office supply office expense, maintenance, utilities. We can go on and on and on. They are called categories. And you have a chart of accounts. A chart of accounts lists all those topics that I spoke about. So every time that you get an invoice, whether it’s in QuickBooks or you do it manually, you should be categorizing all of these items. Because when our team looks at a P&L, we look at and say, well, why is there a disparity from this month to the last month, or the last month, or quarter to quarter or year to year? And we find so many mistakes. The number one mistake is that the item has been mis categorized. If an item’s been mis categorized, it isn’t going to change the profitability. All right? It’s just mis categorized. But if you’re trying to run a business like a business that it is, you want to know what should my chart of accounts? What should I be spending? So you want all your numbers to be right? Because if the numbers aren’t right, it may may mean that you’ve overpaid for a lot of things. And that is how we’re going to save a lot of money. All right. Because we find the mistakes.

00:32:50:24 – 00:36:10:22
Jay Shorr
Tip number seven. We spoke about this a little bit earlier. But negotiate interest rates and terms for your capital equipment financing today. What does that really mean. Negotiating your interest rates is if you have a capital equipment vendor who says, well, we have vendors that will be able to finance it, say thank you. Let me know what that interest rate is because you’re financing it, not through the capital equipment vendor. You’re negotiating it with the finance company. But I want you to be assured that many times, the vendor that you’re buying the capital equipment from has their hand in the kitty, meaning that they are being rebated back several basis points. What does that means? It means parts of a percentage or a percentage of that loan. And it’s almost like a referral fee for bringing that loan to that finance company. There is nothing illegal about that. The only thing I find unethical is that it’s not disclosed. If you disclose it to me, then it’s buyer beware that I knew what I was getting into, but I would negotiate the interest rates for the terms of the capital equipment financing by saying, okay, what are those interest rates? And then let me go out to the market, whether it’s a bank or a finance company, or hire a consulting company like us that helps you negotiate those rates. All right. And it’s a very simple thing. And, you know, our goal is to get you the best rate for the best amount of months that you can afford. Naturally, the shorter amount of months, the higher payment, because it’s going to be stretched over a shorter period of time, and you’re going to be saving money in interest, will help you negotiate. The interest percentage will help to see whether or not if you pay it off early, will it reduce the loan because a lot of companies will say there is no prepayment allowed. Others will say, well, you can prepay it off after a year. Why? Because most of their interest is made up front, so they don’t want to give that out. During the pandemic, when many people couldn’t pay, we helped a lot of people deferr those payments. What did that mean? They couldn’t pay for several months while you were closed. So we took that amount of payments that you couldn’t pay, took that total amount, and then divided that by your remaining payments and add on the back into the remaining payments without any additional interest, which saved money, because if you didn’t pay it, you were going to have to pay late fees, you would have to pay additional interest. More importantly, a lot of these finance companies were calling in the notes. Finance companies don’t… Although it is secured and collateralized by the equipment. These financial companies don’t want the equipment, they want their money. So finally, tip number seven is if you don’t have the accessibility and the wherewithal and the know how to negotiate, these interest rates and terms, seek the help of people who do. That’s really, really important.

00:36:10:24 – 00:37:52:11
Jay Shorr
Tip number eight automate, automate, automate. Use every ounce of automations in your phone system. Your EMR, your website vendor, and more. And what do we mean by that? Instead of going out to automations with four and five different vendors, see if the vendors that you already use can combine all these automations, you know, into the program that you’re negotiating, because you won’t have to pay extra dollars to multiple vendors. You may be able to negotiate all of these automations for example, websites, you know, a website, companies and EMR companies, they have the idea that you can automate a system for appointment reminders. All right, EMR have them phone systems have them. You know, the type of automations where you hit one to confirm and two to cancel, three to reschedule. There’s automations AI today takes over all of this chat bots. All right. There is a chat bot company or their chat bot companies within the EMRs. You may pay a little bit more if you get it with the EMR, because the EMR may not necessarily have it, and they have to bring in the third party to do it. Some EMR may already have it, so I’m not going to go out on the limb and say they don’t, but check with all of your, you know, different vendors.

00:37:52:11 – 00:38:05:22
Jay Shorr
So that is our team. And you can you scan that QR code. You can join our e-newsletter or you can set up a free consult with me. And with that we will open it up for questions.

00:38:05:24 – 00:38:53:20
First question they’re asking if you can repeat a calculation.

Oh I did I saw that come up. The calculation was on the total revenue minus the cost of goods sold. All right. Equals gross profit. Forgot to mention, one of the best ways to save money is nobody should ever leave your office in the static business without some type of a skincare product. All right, if you’re not selling 10%, 10% of your revenue in skincare products or retail, you’re missing the boat. It’s the only way you can have an item that’s 100% markup with a 50% net margin.

00:38:53:23 – 00:42:03:04
Do you have a script you recommend when negotiating vendor pricing?

When you’re negotiating pricing, you really need to know what the other companies that you’re comparing to. Do your homework ahead of time. And then what you want to know on vendor pricing is, what if I buy it now? Is there a difference if I pay for it now? Is there a difference if I pay for it by a check versus a credit card? And I urge everybody to pay it by credit card? I’m seeing more and more vendors now, though charging for credit cards. They’re charging 2.5%, 3%, 3.5%. I understand nobody wants to eat the cost of their credit card fees. All right. But I would ask, do I get a 30 day term, 60 day terms, 90 day terms, you know, with our filler companies or your toxin companies, you can buy something and then you can pay for it 90 days. It used to be now if you would pay by credit card, they want it called. But it used to be 90 day terms and you could pay for it by credit card. If you can do that, great. What I suggest is that you do that, and then you look at your closing date of your statement because when it’s due, contingent upon the closing date of your statement, if you pay it the day after your statement closes, it may still do within the timeframe that the vendor is asking, which gives you another 30 days before you get your statement. And then you may have another 20 to 25 days to pay for it. And you’ve just now borrowed money for 50 to 55, possibly 60 days for free. I have an old expression at this for free. It’s for me. And what I do is, you know, look, I love our vendors. I love our salespeople. But, you know, their job is to sell, all right. And they have to. That’s what everybody look, your job is to sell procedures. Their job is to sell items, my job is to sell sell you to use me. All right. So if you don’t ask, you’re not going to receive. So what is the best deal? If I do it right now, it could be free shipping. It could be. I’ll give you an extra case of needles and extra cases of syringes. Look you don’t know. All right. Like if you never asked, you’re not going to be able to find. And that’s why I always say, you know, have a conversation with me about a particular vendor you’re trying to negotiate with, and I’ll see what the best I can do for you, or I’ll give you the best hint. So yes, there are always scripts to negotiate. Do your homework, ask, what can I get if I do it right now? Because salespeople have so many leads they have to get to and follow up on, the faster they can close your deal, the sooner they can get on to the next deal. That’s just the nature of sales. So ask many times, if there’s an offer to be given, they’ll give it to you. If you’re going to close the deal for them right now.

00:42:03:06 – 00:45:09:01
Okay. Next question. What red flags should we look out for in our P&L statements?

Items in the chart of accounts that are not consistent? If you look at something, and the only time that something shouldn’t be consistent and expense is if you paid it twice in the same month for example, I see some that have rent that are double, and I look at it and I say, okay, well, if the rent is double in May, did that mean that you paid May and June in May? I paid May in May, and I paid in June at the end of May. And if you’re on the cash method then when you pay the expense is when it’s going to be accounted for. When we review P&Ls every P&L that we review has percentages to the total meaning what is its percent to that item percentage of that line, item of expense to the total expense? And then I want to know, what is that percentage of that expense to the total of the revenue. And that’ll give us a percentage. And when I look at that, I look for disparities month to month and quarter to quarter, because it’s a red flag if it’s way off. Sometimes you may have bought more. For example, you may have bought, neurotoxin or dermal filler in November, December because we know that the price is going to go up in January. In my former practice, I might buy $100,000 worth of filler and, and, neurotoxins in November and December for a multiple reasons. One, I wanted to, take the expense and accrue it and deduct it off of my taxes in that year. And secondly, I was able to get the price savings, before it went up. And also, it may have put me into a different tier level from bronze to silver to gold to platinum for the next year, where I may not have been able to achieve it because I would have had to. It’s been $100,000 or 100 syringes or whatever. So, you know, we look for disparities, we look for crazy expenses. And I always caution you, the owner of the business should always know every vendor and the vendors should have receipts attached to it. Because I uncover I do forensic accounting, and I’ve uncovered a lot of theft. So phony vendors that are created by office staff, they pay it, but they also step opens up a phony LLC that makes it sound like ABC supply, and they are the ones that are ABC supply, and the money is going to them. It’s a means of theft. So look for disparity. If you use them QuickBooks and you’re challenging and expand, you could just double click on it and it will open up in your QuickBooks and show where all those expenses were, relegated to.

00:45:09:03 – 00:47:53:05
Okay, last question here. And then I think we’ll be at time. David’s asking, is it better to lease equipment or buy equipment?

Age old question. All right. There are different. There’s capital leases and there’s finance leases. We don’t have time to go through that today. All right. Or buying some of them depends on when you want to buy. You can take what they call a section 179 tax credit. So what’s a section 179. Section 179 is the actual code in the Internal Revenue Tax code. It’s under section 179, in case you ever heard the term 179 and said, well where did they come up with that. And what’s that one 179 tax credit is, is it allows you if you put it into service that year, you can take the full credit against your profit. Now, if you’re not making a lot of money, there’s no purpose to do that because you’re going to have carryovers. If you make a lot of money that year and you want to offset the profit, because if you’re a C corporation, the corporations want to pay tax from an S corporation as corporations don’t pay taxes. The owners, it’s a pass through. So the owners of that’s s-core. Where its an LLC or s-core. The owners get a K-1 tax form based upon their percentage of ownership of the profit or loss, and they could minimize and reduce personal taxation. Now whether if you purchase it, it’s yours depending upon if you lease it and you want to have a 10% or $1 buyout and it becomes yours, fine. But many types like cars you may lease it and you have to turn it back in at the end. Well then you have all this money spent and you have nothing. At least if you buy, you have a residual piece of equipment and even though the value of the equipment may not be worth very much, I always say that the value of the equipment after it’s paid off, even though the physical value may not be worth a lot, the value of the equipment is worth the generation of the revenue that you can generate for it. So even though a $100,000 piece of equipment may only be worth 20 or 30,000 on eBay, you may still generate 50 $60,000 worth of revenue every year. So it’s not worth $30,000. It’s worth 60 or 70 for many, many more years to come. Check the terms and the conditions of the lease because some leases have tax consequences, all right. And some leases don’t allow you early buyout prepayment. Some leases don’t have an amateurization schedule. It’s the all built in and one. So check with your accountant. Check with your consultant. Depending upon your taxation which is the best deal.

00:47:53:07 – 00:49:28:22
Jay Shorr
We are in a business where it’s a dog eat dog world. A patient against us, us against other medicines, other plastic surgery practices, other surgery centers, us against the vendors, vendors against us. We all can get along if we do a win win and negotiating a proper negotiating. There’s nothing wrong with saving money. Vendors will totally respect you. Don’t patients do that to us? Don’t they beat us up for a better price? If I pay cash, do I get a better price than if I pay credit card? Well, if my credit card fees are 2.5% and you offer them a 2.5% discount, they’re going to laugh in your face. All right. You want to give me a $250 discount on a $10,000 procedure? What, are you, crazy? I’m expecting a lot more than that. Well, then why would I accept your cash? Unless just stealing the cash? But that’s a whole other subject that I don’t even want to talk about right now. All right, so, you know, be prudent, offer good negotiation techniques with your patients, offer great negotiation techniques with your vendor. They want your business. You need their business. We are able to use everything to help us save money and run our business. We want it to be a win win and with a win win, you can stand on that podium as a leader and a success. Bye good luck and God bless.

00:49:28:24 – 00:50:07:04
Jay Shorr
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