I’ve owned or consulted for several businesses that all faced the exact same challenges. In chiropractic, gyms, dentistry, retail outlets, the vanity-service industry, weight-loss centers, and other small businesses, you’re always faced with the issue of capacity.
Capacity is the ceiling of what the location is capable of producing and managing at any one time. It’s the place you get stuck and it can be quite costly to the future. After consulting for 1000s of businesses, like it or not, you likely fall into 1 of 2 categories.
- Regardless of what you do to grow, you tend to fall within 5-10% plus or minus your current production.
- For any multitude of reasons, you do not really know how to or want to engage in more production than you’re doing right now.
Of course, I coach people all of the time that can see a real explosion in their current volume of services and collections because we change their process, motivate them, and implement a better system; but inevitably, you will end up in one of the two categories above.
THE TERM THAT CHANGED MY CAREER: A Business within a Business (BWB)
I live 7 minutes from the second most recognizable brand in the world – Disney. With the incredible success of their parks, many get surprised that they create, build, or purchase hotels, ESPN, restaurants, movie production studios, schools, dog-sitting services, campgrounds, clothing companies, and many more businesses you and I may or may not be aware of.
Living here, I have the opportunity to learn from some of their management experts and I went to their leadership experience. Through Disney, I discovered the key to overcoming the capacity issue and radically changing the trajectory of my or anyone’s future. (I’ve also had a similar opportunity to get an inside look at how Walmart, the world’s largest company, works when I spoke at their leadership meeting and it’s very similar).
CHANGE YOUR TRAJECTORY – Add a BWB
As an example, if you manage a restaurant for Disney or run a department for Walmart, you have to succeed as if you were a stand-alone business. Sure, managers benefit from the shared branding, marketing, admin, and support from key leadership; but the growth, finances, employee management, bookkeeping, and performance of that business within the greater, overarching business is up to that manager. A BWB must act and operate as if its all on its own. In fact, that manager “Owns” the making or breaking of that BWB.
Many chiropractors get stuck at a certain level of profit and it reminds me of the first gym I owned. No matter how much we changed, we made about the same profit. However, we went out and learned how to create businesses within the business (BWBs).
In our membership, dues would profit us $30K+/- a month. We had hit a capacity ceiling. Finally, we added a BWB. Here’s what that looks like:
We brought in a manager to create a nutritional business.
- She had to manage her own P&L
- Handled the inventory
- Hired, trained, and managed her own staff
- Did her own promotion.
- As an owner, I collaborated with her on the whole process, she reported to me, and we met weekly.
- We had shared services for bookkeeping, social media, and administration, but her portion was part of her P&L.
Important for it to be a true BWB: We did not pull any resources that would have lowered our capacity for membership. That allowed membership profits to stay where they were. The nutritional division began producing an additional $4-5,000 in profit each month.
We reproduced this process with a personal training and massage BWB and created an additional $7-8,000 per month.
The result was an additional $140-150,000 in profit per year without much additional time or energy from the membership business or executive team. When we sold the gym, we received the additional 50% of the value we received in the sale due to the two BWBs. All in all, this was additional remuneration of in excess of a million dollars.
I’ve learned to do this in my chiropractic practices. Despite the fact that I’ve built the largest clinics in the profession, we still hit capacity as described. By adding BWBs, however, we could blow right through profit capacities and massively impact the bottom line and our future.
Stay tuned for more on generating BWBs in your clinics and small businesses…
Let me know how I can help you.
Have fun saving the world
Dr. Ben
