When it comes to building a profitable practice, it all boils down to one simple equation.
Revenue – expenses = profit
It’s an easy concept, right?
So when you look to increase your profits, it might be first instinct to first grow your revenue.
This might be by attracting new patients, seeing existing patients more often, introducing new services, or increasing prices.
However, as we increase our revenue, our expenses tend to increase. In fact, they’re almost proportional to one another.
You might need more equipment, more staff, training existing staff, a costly marketing campaign, longer hours – all of which make your expenses creep higher and higher…
So while your revenue looks nice and big, it actually doesn’t increase profits by much. In fact, you might even find your profit remains stagnant.
But, there is another option…
What if you left your revenue as is – but focused only on reducing expenses?
Take a look at all your expenses, and categorise them as either “wants” or “needs”.
Audit all your wants and see what you can live without – without compromising care or cutting necessary corners.
But what are you paying for that you honestly don’t need?
Optimising a practice for profitability requires you to look at where you’re spending money that isn’t necessary.
If we compare a revenue vs. expense based approach, you can see the results for yourself…
Sometimes more revenue is not the answer – especially when your profit: expenses ratio isn’t moving.
I’d like to challenge you to go through your profit and loss statement and examine where you’re spending on wants vs. needs. You might just find you increase your practice’s profitability…