In my coaching and training business, I see many doctors with enormous anxiety about investing money in their practices. They mistakenly believe they can't afford it, or they don't have enough cash flow.
The fact of the matter is that you have to invest if you want your business to grow. You have to invest in new and better facilities, in training your staff, in marketing your services, in providing the absolute best care, and in creating the best patient experience.
Learn to Make Wise Investments
The only way to get comfortable with investing is to actually make an investment, then track the results. This will allow you to see the ROI in your business and give you confidence to forge ahead.
As the primary doctor and owner, you are also your practice's primary investor. No one else is going to do it for you. The first step in making wise investments is understanding the difference between an investment and an expense.
Understand Payoff Math
An expense doesn't have a return. When I buy an expensive watch, I do it because I really enjoy nice watches. I don't fool myself into thinking it is going to somehow help my business improve. That doesn't mean I'm not allowed to buy nice things just because they don't create a return; it just means I can't lie to myself about it. I understand that this is purely an expense.
On the other hand, an investment should create a return, even if it is distributed over a period of time. A new building, for example, is an investment with a very high return. All it really takes to illustrate this point is a little bit of math. So, grab your calculator and let's crunch some numbers.
Let's say you are in a building with 4 treatment rooms, and are producing $1 million per year. Buying a building with space for 12 treatment rooms will cost you around $1.5 million. Calculate how much you make per treatment room by dividing your annual production by your current number of treatment rooms. ($1,000,000/4 = $250,000/treatment room.) Finally, multiply this per-room figure by the number of treatment rooms you would gain if you bought the new building. ($250,000 X 8 = $2,000,000) That's $2 million on top of what you're already producing right now! Suddenly, it doesn't look like a huge expense anymore. You could invest $1.5 million for an ROI that's double what you produced this year. The investment would be paid off over a period of time, while your $3 million in production would pour in year after year. Once you do the math, you can see that it's actually a tremendous investment!
Too many people lack the financial knowledge and expertise to do the "payoff math," so they don't feel comfortable making investment decisions. Instead, they avoid the math and the decision-making entirely, and allow their business to stagnate. After 5, 10, 20 years of owning a practice, they may never see significant growth.
If this applies to you, pull yourself out of that slump and recongize the power of a good investment-one that will build your business and net worth. A can't-afford-it perspective is shortsighted, and will prevent you from making decisions that are ultimately necessary for practice growth.
Move Past Little Fixes
Taking on debt is always a scary step, especially if you need to take on more debt in order to make an investment that will get you out of debt-but that might be your best option. As scary as that decision seems, I can promise you that going bankrupt and losing your practice will be a whole lot scarier. You need to stop making little fixes to your practice-cheap solutions that don't even touch the root of the problem. Instead, focus on looking at what your business needs as a whole. If you need a new building or an expansion, bite the bullet and do the math. Is it a good investment? Will you be making more on return than you will be spending on cost? Most of the time, the answer is yes.
If it's been more than 90 days since your staff had any formal training, invest in training. You will never waste your money if you spend it on staff training. In my opinion, this is the wisest investment you will ever make for the growth of your business.
For example, let's say you spend $6,000 to train your front desk staff and 30 days later, you've gained five extra new patients. If each patient is worth $1,500, you've just made $7,500 in one month-the cost of the training plus $1,500 extra! That's a great ROI, right? Remember, an investment is not an expense. An investment is a temporary cost that yields a great return. You just have to look at the big picture.
Jay Geier is a speaker, consultant, and president and founder of Scheduling Institute. Scheduling Institute offers training in the office as well as training, workshops, and events in Atlanta and Phoenix. For more information on Scheduling Institute's programs, email MoreInfo@SchedulingInstitute.com, or go to www.SchedulingInstitute.com.