In the latest installment of Raven Health’s ABA Startup Success 101 series, Tim Crilly sits down with Ethan Schwarzbach, Co-Founder and CEO of Flychain, to discuss a critical yet often overlooked aspect of running an ABA practice: financial management. The partnership between Raven Health and Flychain aims to provide ABA practitioners with the tools and knowledge necessary to manage their finances effectively, ensuring they can focus on their clinical mission.
The Importance of Financial Management
Tim opens the discussion by highlighting the “dirty little secret” of running a clinical practice: the need for effective financial management. Without it, practices struggle to keep the lights on, pay employees, and ultimately fulfill their mission of helping families. Ethan, whose background lies in finance and lending, founded Flychain to address these challenges, especially within the behavioral health space.
Revenue Cycle Management (RCM): The Lifeblood of Your Practice
A significant portion of the discussion centers on Revenue Cycle Management (RCM), which Ethan describes as the lifeblood of any fee-for-service business, including ABA practices. RCM involves managing the entire billing process, from submitting claims to ensuring timely payments. Poor RCM can lead to delayed payments and financial instability, which is why it’s crucial for ABA practices to have a robust system in place. Flychain’s approach to RCM emphasizes tenacity in chasing down payments and ensuring that practices receive the revenue they’ve earned promptly.
Capital Planning: Preparing for Growth
Ethan also discusses the importance of capital planning, particularly in the early stages of an ABA practice. He explains that the first year is often the most challenging, as small businesses have limited access to traditional forms of capital. Flychain offers solutions to bridge this gap, such as advancing payments on insurance claims to improve cash flow. Ethan advises new business owners to plan their capital needs early, ensuring they have the necessary funds to weather initial financial challenges and position themselves for growth.
Bookkeeping and Accounting: The Foundation of Financial Health
Flychain has developed a specialized accounting and bookkeeping service tailored to the unique needs of healthcare providers, particularly in the ABA field. Ethan emphasizes the importance of having clean, accurate financial records from day one, as they are crucial for securing loans, managing expenses, and eventually selling the business. Flychain’s service is designed to take the financial burden off the shoulders of ABA practitioners, allowing them to focus on delivering care.
Final Thoughts
The webinar concludes with a discussion on the various forms of capital – equity and debt – and the importance of understanding these concepts as a business owner. Ethan and Tim both stress the need for ABA practitioners to educate themselves about financial management, as it is integral to the success and sustainability of their practice. The partnership between Raven Health and Flychain represents a significant step forward in providing ABA practices with the financial tools they need to thrive.
This partnership with Flychain offers ABA practices the opportunity to not only streamline their financial operations but also to secure the capital necessary to grow and continue providing essential services to their communities.
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