How To Ensure Your Profits Grow At Least As Fast As Your Revenue
Are You Managing Your Overhead or Is It Managing You?
As your practice revenues grow overhead usually increases to service the growth in business. Too often we see overhead outpace revenue. Hearing healthcare practice owners tell us one of their concerns about growth is the fear of working harder and making less money.
Successfully growing a practice requires managing overhead including knowing which types of overhead will increase your profits.
What Are Your Financial Statements Trying To Tell You About Your Overhead?
One client allowed their overhead to exceed 45% of revenue. Although they regularly reviewed their financial statements they didn't have the training to understand what the numbers were saying. We explained the "money mechanics" of an audiology practice to them. In less than an hour they understood which expenses were creating problems and how to turn things around.
The majority of practice owners do not realize the
breadth of information their financial statements reveal about their practice.
Our clients use remarkably simple calculations to make much more profitable
business decisions.
Overhead: Investments vs Expenses
Before you spend an additional dime on overhead be sure you understand how it will impact your bottom line. The money you spend will either be an investment or an expense. Investments pay for themselves, expenses do not. When you understand and live by this paradigm you will easily make more profitable decisions in your business.
Take this quiz on your overhead. See if you can spot which are investments (generate income) and which are expenses (drain money)?
| • | Hiring a provider. |
| • | Hiring a part-time billing person. |
| • | Adding 500 square feet to your space. |
| • | Buying or leasing new equipment or replacing equipment. |
| • | Purchasing new patient scheduling software. |
| • | Hiring a part-time assistant to implement a new call back program with your patients. |
Successfully growing your practice is easier, faster and more predictable when you know how to manage your overhead effectively.
For more information on how to grow your practice more profitably contact us.