Inflation continues to chip away at business profitability and therefore cashflow. What is worse is that it does not seem like it is going away anytime soon. The Fed has maintained its elevated interest rates and the recent stats show inflation is still above the Feds target rate.
What should you be doing for your business to survive and thrive in this market?
- Design a plan to drive more revenue to your business by ensuring you understand the key drivers for new patients or clients. Always be focused on the top line as that is the hardest get consistent
- Once the topline is optimal focus on Pricing if you are a service business or Production Dollars per Patient if you are a medical service provider.
- Once these two are near your goals and targets, then focus on expense reduction.
The first step most business owners and practice owners take is expense reduction, because it is a quick fix. But enough time isn’t focused on the first point. The end result becomes profitability is stagnant for years vs growing at a health rate.
In order to understand these goals you have to have a strong grasp on your practice financials. 9 out of 10 new clients we speak to can’t speak to the numbers on the P&L or identify drivers and speak to their forecast. This makes for an inaccurate diagnosis and treatment plan for the business.
Follow the order above and have a strong understanding of your financials which will enable you grow in all environments.
