Out last blog post spoke about marginal gains, and that leads really nicely onto planning for profit. A big part of planning for profit every month is recognising marginal gains.
Small incremental changes that you make in your practice can actually make a big impact on the level of profit your business makes each month and each year.
One of the things that we can look at immediately is suppliers. You can start by looking at which contracts you can cut because you no longer need them, although the majority of people already have done this on the back of COVID. You should also start looking at which contacts you can change over to a new supplier to save money. For example, you might have never really shopped around for a new broadband or telephone supplier, but doing this could actually make a big difference in terms of profit in the long-run.
With regard to revenue, looking at the revenue that each team member brings to the business is important. Once you understand this, you can start looking at what each person needs to do to improve their performance or contribute differently to the team. This could be more training, or it might be more financial understanding or awareness. It can be all sorts of different things.
Another thing to consider is pricing. We know that many practitioners agonise over increasing prices, but it’s important to recognise that this is necessary to make sure that you’re actually keeping your business profitable. Even tiny price increases, for example £1 per treatment, can make quite a difference. Let’s say you do 2000 treatments in a year; when you put your price up by £1, it’s making you an extra £2000 in a year. We would suggest looking at a bit of a higher increase; for example, £5, with 2000 treatments per year, that would make a £10,000 impact on you bottom line. What’s important to realise when you think about increasing your prices, it’s not about you coming across as profiteering, it’s about you making a healthy profit so that you can keep on treating patients, and the small little gains all add up.
Planning for Profit
Once you’ve understood what you need your revenue to be, to meet all of your overheads, to meet all of your salary costs (including your own), you should make sure that you’re starting to build in a profit plan as well, so that your business is sustainable and can grow and can continue to contribute.