So many clinicians and clinic owners run with only very small profits, at breakeven or even making a loss, and many clinic owners don’t pay themselves enough – this is not okay and it’s not sustainable. We want to help you identify how to find more profit within your clinic so that you can reward yourself and reinvest, starting with uncovering hidden profits.
One of the key areas to make more profit, is putting prices up. A lot of clinic owners do not review their prices for an awfully long time, and then when they do, they agonise over whether they’re going to put them up or not. You should take a look at your pricing structure and whether it can be addressed.
It’s also important to have a look at the different revenue streams of your business. One key thing to look at, for example, might be how reliant you are on insurance patients. If a lot of your patients are insurance patients, take a look at whether you’re getting paid enough for those patients. It is really worthwhile taking time to understand what your profitability is on each appointment, because then you can start to see which insurance companies are probably actually costing you to deliver the care to. If you realise it’s costing you to deliver some of those insurance appointments, write to that insurance company with a new pricing structure.
You should also be very aware of your expenses, and make sure that you’re not just someone who renews your contracts year in, year out. When it comes to your utilities, telephone insurance, etc. you should shop around to make sure you’re getting the most competitive price for the service you get. We’re not advising you go for the cheapest option, as it’s still important you get the right level of service, but you should make sure that you’re not paying more than you need to. We think that one of the most effective ways to help cut costs is to share them with someone, If you list all of your expenses and share them with somebody else, it helps you to become really accountable and to explain why the expense is or isn’t needed. This can then help you to reduce your expenses.
Looking at your business model, in terms of your team members, is another key area where you might be able to uncover hidden profits. For a lot of clinics, the standard model in the past has always been the associate model. But some of the contracts in this model are extortionately high in the favour of the associate. It just does not make business sense to be paying an associate 60-70% of the revenue because you’ve still got to sustain your business and make the business profitable so that you can continue operating. Sometimes, an employed model is more cost effective. We’ve had a few clients that have changed over from an associate model to an employment model and haven’t looked back.
Another probably indirect place where your profits might lie is how you are managing your time. If you’re thinking that you’re going to save money by doing, for example, the cleaning, or the bookkeeping, what you’re actually doing is detracting away from you being able to build your practice and get more patients through the door and build a much more sustainable business. Even just looking at it in monetary terms, it doesn’t make sense to do these task – if you charge £50 per session for your treatment, you would be earning around £100 per hour. You could get a cleaner for £20 per hour, or you could get a bookkeeper for £25 per hour. So, whilst you might think you’re not saving money by outsourcing some of these tasks, actually in the long-term you are – you need to make short-term decisions for long-term benefits.