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This Week’s Question: Treat Your Practice Like a Business
I run a profitable cosmetic surgery practice in a fairly competitive area. I used to do really well before the Recession but was able to weather the storm and have been doing fine.
But I had some staff changes earlier this year and it just now has come to my attention our revenues are down more than 25% from last year and that doesn’t make any sense to me.
I’m busy every day and still spending money on advertising but cannot figure out what the problem is so your input is appreciated.
Hello Dr. F,
Thank you for such a timely question. Isn’t it maddening when you find out you’re not as healthy in your practice as you thought? Well, you’re not alone.
Anyone who has been in practice for any length of time has had similar “wake up calls” like you. You think things are fine because you’re busy and the bills are paid only to learn things are not as rosy as you thought.
Times have changed.
You must run your practice like a business…period.
Back in the good old days, patients just flocked to your practice without you doing much of anything at all. You simply gave them a nice experience and result and they told their friends and family about you and you organically grew your practice over a lifetime.
But now things have changed.
You don’t have years to grow your practice organically. You have NOW. You have to cover your overhead every month NOW. That means, you need to be busy with cash-paying patients every month of the year.
But the heated competition from all directions can interfere. Medspas, groupons, franchised surgery centers and even dentists are eating away at your prospective patient base. You now have to fight for new patients. You even have to fight to keep your current patients loyal to you so your competitors don’t snatch them away from you.
You cannot know how healthy you are as a business unless you truly understand your numbers. And, I’m not just talking about your P&L statement you get from your accountant. That will tell you the overall view of your practice but it will not tell you what’s really going on.
Here’s what I mean…your numbers may look good one year and ruin you the following year because they gave you false assumptions that you’re in good shape and all is well so you kept doing what you were doing ASSUMING you would get the same result.
When you know your numbers, the REAL NUMBERS, you learn the inner-workings of your practice. You see…
- You have one key player who brings in the majority of your revenues so you are vulnerable to losing money when she quits
- You lose 15% of your callers due to broken phones but never knew it
- 80% of your revenues are coming from 3 procedures you offer, yet, you are spending 40% of your advertising dollars on loser procedures
- You are considered a “one-hit” wonder by your patients who come to you once and never return so you need to spend even more finding replacement patients
I’d be happy to help you decipher your own key performance indicators in a FREE Strategy Call where, together we find out if you’re healthy or vulnerable to financial ruin. Our call together will either reaffirm you are set up for success or it will become obvious you are missing key pieces of information you need.
Catherine Maley, MBA is a business/marketing consultant to plastic surgeons. She speaks at medical conferences all over the world on cash practice building and trains staff to be converting rock stars. | View Author Profile | Get a Free Copy of her popular book, Your Aesthetic Practice: What Your Patients Are Saying