Profitability- the Investment that Pays Later AND You Get to Enjoy Now!
Updated: Jun 9, 2020
Hello September- where did you come from?! I imagine many of you are also staring in disbelief at the calendar, not quite sure how Labor Day has already come and gone. While it is always sad to see summer go, transitional periods between seasons are great times to plan and implement new ideas for your business. Something about the awareness of the passing of time and the fresh start of the new season is very motivational and inspiring- so take advantage of it!
In that spirit, for my first blog after taking an (unintentional!) summer break from writing, I’d like to recommend a great article by the amazing Brian Tracy. He is a well-known expert in personal success strategies, and everything he puts out is basically fantastic. So check out this one on increasing profit in your business.
Whether you want to sell your practice tomorrow or twenty years from now, the profitability of your business is the most important thing you can focus on with a sales-oriented mindset. Tracy identifies ten different aspects to increasing profitability- and it got me thinking, what if our doctors made an action plan to focus on one of these areas for a month for the next year? When broken down like that, accomplishing everything on this list actually feels very doable. And with an action plan like that, how could your profits NOT grow? Which puts your practice in a much stronger position for a faster sale at a higher price point.
So check out this article, and to make it even easier for you, here is a list of some great resources and thoughts for each area. This is a longer post, but that is because it is PACKED WITH GREAT INFO YOU CAN USE RIGHT NOW!! So get to it, make an action plan- or Eat That Frog, as Mr. Tracy would say!
*Disclaimer: We have no affiliation with any of these companies, products or individuals. These are not affiliate links and we are NOT receiving any compensation for recommending them. In most cases we have had no actual experience with these companies, so check them out- at your own risk- and see if they might be a good fit to increase your profitability!
1) Lead generation
Check out some of the newer programs that will give you information about prospects who visit your website but never provide their contact information! This is revolutionary- imagine being able to call or email an interested prospect right when they are looking for your services. You could offer them a special deal or an immediate appointment opening… We have not personally used any of these programs, but have heard good things about Visual Visitor. In looking it over you get a free two week trial and then the service is just $59 a month, which would be well worth the opportunity to reach out to interested prospects via phone call or email!
2) Lead conversion
Depending on the strategy you use for your lead generation and how you run your clinic, your conversion strategies will differ. But this is a great thread that covers a bunch of different strategies from different market leaders on how to implement different programs. Depending on your goals, many of these different ideas might work well for your practice, and increase your conversion rates.
3) Number of transactions
A great way to increase patient compliance and boost the quantity of their visits is education, and what do you know, there is an app for that! Check out this article on the benefits of using digital technology to visually explain patient conditions and treatments. This approach has so many benefits! When education is done digitally, you can be sure every patient will receive clear, concise and consistent information- AND technology is a proven way to build value in your services!
A note of caution- before any program to ramp up number of visits, you must calculate what your current office, schedule and staff can handle. This article can help you figure out your constraints.
4) Size of transaction
Upselling is tricky as you never want to come off as that guy… So instead of focusing on what can you add to each sale, think about how you could offer your patients more value- and charge for it. Does your business already have a niche focus? If not, do you have a passionate interest in a complimentary area such as exercise, nutrition or pain management? One idea that would be great for making your practice unique and attractive from both your patients and potential buyers standpoints is a low-cost, subscription-based informational program. Say it costs your patients maybe $10 a month, with automatic payments and all new patients signed up for it. You send out an email monthly compiling new information, products and ideas for people on the program to try. Is this extra work? Yes. Could you outsource a lot of it to staff? Yes. Would it impact your current profitability and future sales prospects? Absolutely.
5) Profit margin per sale
You can increase your profit margin two ways- raise prices or lower costs. Raising prices is addressed below, but don’t write off cost-cutting as a hassle with few payoffs. Running your practice in a lean manner is incredibly attractive from a sales standpoint. Most chiropractic practices have a 55-65% overhead. Bring yours down to 40% or lower and you will really stand out when it comes time to sell, not to mention the resulting increase in your net income that you can enjoy in the meantime!
Every practice will be unique in opportunities for cost cutting. Involve your staff in the discovery process; Have a staff meeting and announce you will reward employees who suggest money-saving ideas with 5% of the savings. This will also cultivate a culture of innovation in your clinic that can reap surprising rewards in all areas of your practice
6) Customer acquisition
I recently ran into a company called Synpractic, they offer marketing plans with everything you need to pull off fun, unique chiropractic events. The materials look great and there is no contract, so if events are your thing- or you would like for them to be- this looks like a great, easy way to dive in.
Also, as far as social media marketing, are you promoting your clinic on Linkedin? It’s a great place to interact with local professionals, so this is the place to go to build referral networks with local doctors, attorneys, gym owners, and other specifically targeted local business owners. Check out this video on how this works.
7) Increasing customer referrals
While the Brian Tracy article is focusing on customer referrals, I’d love to share a resource for generating more professional referrals. Dr. Jeff Langmaid has written an excellent post on office marketing in general, but his tips on building a professional (mostly MD) referral network are really exceptional. Follow this system and watch your office explode!
8) Eliminate costly services and activities
I find that this is less often true with chiropractic offices- but still something to consider. Also consider are there any costly expenses related to staff- or yourself!- that could be removed.
9) Reduce your break-even point
This is more of a mindset, evaluating each potential new expense with the idea that it must bring in more than enough direct revenue to pay for itself, so it doesn’t increase your break-even point, but actually brings it down. A great tool for evaluating potential services and purchases.
10) Raise your prices
Check out this great article that breaks down how much a small increase in prices (or providing discounts such as cash, prepayment, etc) impact your revenue.
Hopefully this has opened your eyes to some new options out there- let us know if you give any of them a try, we’d love to hear your experiences with them!