Running a successful physiotherapy, osteopathy, or podiatry clinic in the UK requires more than just clinical excellence. While your hands-on skills are what help your patients get better, your financial management skills are what keep the doors open and ensure you are rewarded for your hard work. Many clinic owners find themselves in a constant cycle of stress, checking their bank balance daily to see if they can afford to pay the rent, the clinicians, or themselves.
In a recent episode of the Treat Your Business podcast, Katie Bell explored a concept that might seem counterintuitive at first: the idea that you should never have just one bank account for your business. If you are currently operating out of a single business account, you are likely falling into common traps that hinder your growth and eat away at your profit. By implementing a structured approach such as the Profit First model, you can revolutionise your relationship with money and build a sustainable, thriving practice.
The Problem with the Single Bank Account Trap
Most clinic owners use what is often called bank balance accounting. This is the habit of logging into your online banking, looking at the total figure, and making immediate decisions based on that number. If the balance looks healthy, you might decide to invest in that new piece of shockwave therapy equipment or hire a new receptionist. If the balance looks low, you panic and stop spending altogether.
This method is flawed because that single number is a lie. It does not account for the tax bill due in six months, the quarterly VAT payment, or the profit that you should be taking out of the business. When all your money is in one pot, it is incredibly difficult to see what is actually yours to spend and what is already spoken for by HMRC or your suppliers.
The Plate Analogy: Why Multiple Accounts Work
To understand why multiple accounts are necessary, Katie Bell uses the analogy of a buffet. Imagine you are at a dinner party and the host serves all the food on one giant platter in the middle of the table. You are likely to eat far more than you need because the boundaries are not clear. However, if that same food is divided onto smaller plates, with portions allocated for vegetables, proteins, and starches, you have immediate clarity on what you are consuming.
In your business, your bank accounts are your plates. By dividing your income into different accounts, you gain instant visibility. You no longer need a complex spreadsheet to tell you if you are profitable. You simply look at your Profit account. You do not need to guess if you can afford your tax bill. You check your Tax account. This clarity removes the emotional weight of financial management and allows you to lead your clinic with confidence.
The Four Principles of Financial Mastery
To move away from the chaos of a single account, you must embrace the four core principles of the Profit First approach. These principles are designed to work with human behaviour rather than against it.
1. Use Small Plates
As mentioned, the first step is to set up multiple accounts. For a UK healthcare business, we recommend starting with five foundational accounts. These are Income, Profit, Owner's Pay, Tax, and Operating Expenses. When money flows into your Income account, it is then distributed into the other four plates based on pre-determined percentages. This ensures that every pound has a specific job to do from the moment it enters your business.
2. Serve the Veggies First
In the traditional accounting world, the formula is Sales minus Expenses equals Profit. The problem with this is that profit is treated as an afterthought or a leftover. In the Profit First world, we flip the script: Sales minus Profit equals Expenses.
By taking your profit first, even if it is only 1 percent to start with, you are ensuring that your business is serving you. It forces you to run a more efficient clinic because you have to manage your expenses with the money that remains, rather than hoping there is something left at the end of the month.
3. Remove Temptation
One of the biggest hurdles to financial stability is the temptation to dip into funds that are meant for something else. If your tax money is sitting in your main account, it is very easy to tell yourself that you will pay it back later. To prevent this, you should ideally move your Profit and Tax accounts to a different bank entirely. By adding this extra step, you make it much harder to access those funds for daily spending, ensuring they are there when you truly need them.
4. Enforce a Rhythm
Financial management should not be an ad hoc task that you do when you feel like it. You need to establish a consistent rhythm for your money. For most clinic owners, a twice-monthly schedule works best. For instance, on the 10th and 25th of every month, you perform your allocations. You move money from your Income account into your other accounts and pay your bills. This regularity creates a clear picture of your cash flow and prevents the end of month scramble.
Prioritising the Owner's Pay
As a clinic owner, you are likely the hardest working person in your business. Yet, many owners pay themselves last, taking whatever is left over after everyone else has been satisfied. This is a recipe for burnout and resentment.
Prioritising your own pay is not selfish; it is essential for the longevity of your practice. When you are fairly compensated for your work, you have more energy to invest in your team and your patients. Your Owner's Pay account should cover your base salary and the dividends you need to live a comfortable life. If the business cannot afford to pay you, it is a sign that your current business model needs adjustment, not that you should work for free.
Building Profit from Scratch
If you are currently struggling with cash flow, the idea of setting aside profit might feel impossible. However, the secret is to start small. You do not need to start by allocating 20 percent to profit. Start with 1 percent.
If your clinic brings in 10,000 pounds this month, 1 percent is only 100 pounds. You will likely not miss that 100 pounds in your operating expenses, but seeing that Profit account grow from zero to 100 pounds is a powerful psychological win. Over time, you can gradually increase these percentages as you become more efficient and your business grows. This incremental approach builds the habit of profitability without shocking your system.
Practical Steps to Get Started
To begin your journey towards financial mastery, follow these practical steps this week:
- Open your accounts: Contact your bank or use a modern digital banking platform to set up your five accounts. Ensure they are clearly named so there is no confusion.
- Determine your current percentages: Look at your last six months of spending to see what percentage of your income currently goes to expenses, pay, and tax.
- Set your target percentages: Decide where you want to be in twelve months. Perhaps you want to reach 5 percent profit and 30 percent owner's pay.
- Start the rhythm: Choose two dates each month to manage your allocations and stick to them religiously.
By moving away from the single bank account model, you are choosing to treat your business with the respect it deserves. You are moving from a state of reactive panic to proactive leadership. Your clinic, your team, and your family will all benefit from the stability and clarity that multiple accounts provide.
To hear more about the Profit First approach and how it can be tailored to your healthcare business, listen to the full podcast episode. Katie Bell dives even deeper into the nuances of these principles to help you achieve the financial success you deserve.
Listen to the full episode here: S4 EP07 Why you cant just have one bank account
