March 16, 2017

How to Make Your Own Pot O’ Gold

Legend has it that a Leprechaun's pot o’ gold generally contains 1000 pure gold coins. Nowadays, assuming each coin is an ounce, that’d be approximately $1,219,600. Not too shabby! But you’re never going to find that much money sitting at the end of a rainbow. Not a chance. If you want that kind of money in your bank account, you’ve got to increase your profitability! Here’s how to make your own pot o’ gold; with or without the luck of the Irish ☘

Starting this St. Patrick’s Day, View Your Practice Differently

Essentially, your practice is a business. The sooner you start looking at it that way, the happier you’ll be. Why? Well, it’s easy to give away services and have a sense of “fulfillment” as a result, but in the end, you’ll be broke. And money is a tool that allows you to grow your business, expand your vision, invest in your family, improve your employees’ lives, and make the world a better place through philanthropy.

So . . . you kind of need it.

2 Simple Ways to Increase Your Business’ Profitability

The goal of most businesses is to grow their net profits as large as they can. Remember, net profits is the money left over in your business AFTER you’ve paid ALL of your expenses (including your base salary).

Net Profit Formula

It’s your bottom line and a measure of your profitability. So, if you’re not tracking your net profits, you need to be. Measurement is the first step to improvement.

Automated Business Dashboard

Assuming you’re tracking the necessary metrics, let’s talk about how we can increase the profitability of your practice. There are many, many tactics to increase net profits, so I’m going to focus on the 2 that I think are the simplest, yet still very powerful!

#1 Attract Patients that Want Your Most Valuable Services and Products

Are you tired of being a drill and fill dentist or rack and crack chiropractor? Then stop for a moment and look at your marketing and patient education systems; what’s the message you’re putting out to the public?

Fundamentally, your clinic provides services and products in exchange for money. In dentistry and chiropractic alike, there are a wide variety of services and products that you can exchange. It all starts with your marketing and patient education. Attracting the RIGHT patients and educating them is what sets the ball in motion to provide the services you want to provide. (Like your most profitable services, for instance.)

. . . Which brings me to a few important questions:

  1. Have you identified what services are your most profitable? (That doesn’t necessarily mean your most expensive codes.)
  2. Do you know what your costs are for each service?

These are critical questions to have an answer to if you want to identify the most profitable services to attract. Obviously, we do what is right for each patient, but remember, what “type” of patients you attract is a choice.

#2 Create Policies and Systems to Deliver Your Services and Products

Hopefully, by now you’ve identified your most valuable services and products. Ideally, you’ve also put your finger on the demographic you need to attract. Now, it’s time to focus on the machine that delivers your services and products in order to deliver as many of these as possible!

Ultimately, the better you and your office lead train your team to execute streamlined systems, the more successful and profitable you’ll be. For instance, I see too many doctors discussing finances with their patients. This is a bad idea because we’re “connected” to them emotionally, so it’s easy to offer “special” pricing that ends up costing the business the very profits we’re trying to grow. Instead of “special” pricing, your pricing should be your pricing no matter who in the office handles the patient agreements. If you have discounts that you want to offer, then that’s fine. Just make sure they’re clearly outlined, so everyone knows who qualifies for those prices and when they should be offered.

This is just 1 example of many policies that will reduce overhead, keep inventory expenses under control, and operating hours efficiently scheduled, so your biggest cost (payroll) is well spent and productive!

No Better Time Than The Present

If you get really good at these 2 things, you’ll continue to see your net profits grow year after year. At last, you’ll have your pot o’ gold! No Leprechaun needed. Plus, with the government fighting over how to insure our nation, manage entitlements, and make “crisis care” affordable, there’s no better time than the present to increase your profitability!

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