7 Small Mistakes That Can Have a Big Impact on Your Bottom Line
By Mark Sanna, DC, ACRB Level II, FICC
One of the all-time great sayings by former Yankees player / manager Yogi Berra is, "You can see a lot just by looking." With all of the effort required to keep up with the pace of change in practice, many chiropractors become so busy that they forget to take the time to just "look" at their practice.They often miss the simple things that can have a big impact on their bottom line.
I like to encourage chiropractors to take time to assess their activities to be sure that they aren't making some of the most common mistakes that can mean the difference between a positive and a negative bottom line. Here are seven common revenue-related mistakes I see on a regular basis:
Mistake #1: Failure to Focus on Profitability
It is common practice for chiropractors to set new-patient goals for their practice team. However, make sure you are setting the right goals! From a revenue standpoint, all new patients are not created equal. Some cases provide your practice with a higher profit margin. Analyze all of the patients you attracted over the last year. Which cases provided the highest revenue?
Many factors can impact the answer for your practice. Third-party reimbursement in your area, personal-injury and workers' compensation laws, managed care, as well as the level of family wellness care you provide all play a role. Set goals to increase the number of new patients in the categories that bring the most income to your practice. Keep your focus on profitability instead of just new-patient volume.
Mistake #2: Failure to Flexibly Price Products
Many chiropractors provide ancillary products such as nutritional supplements, gels, pillows, orthotic supports and exercise equipment, like stability balls and resistance bands, to their patients. However, many use a standard mark-up on all of the products they provide. No matter what the product or the perceived value to their patients, they just double the price they paid for the product.
This is not necessarily a bad practice. However, I encourage you not to blindly depend on a standard mark-up. The "art of merchandising" means that you have the ability to maximize the profit margins on your products based upon your understanding of how your patients value them.
Mistake #3: Failure to Raise Fees
Over the past few years, many practice owners have been terrified of raising their fees. I sympathize with your concern, but if your costs keep going up, at some point you have to pass this cost on to your patients. Compare your fees to the fees charged by other chiropractors in your geographic area or use a published schedule of fees, such as Inginex, to be sure that your fees are in line with what is reasonable and customary for your community. You may be surprised at how a small upward adjustment in your fees across the board can have a significant impact on your bottom line without raising objections from your patients.
Mistake #4: Failure to Utilize Market Segmentation
Not all of your patients want your services delivered the same way. With communications between your patients and your practice becoming more consumer-centric, it is important to think of "value"-added services that can help you deliver what your patients want.
There are several things you can change to help you reach different segments of the market. Analyze your practice hours. Expand the hours most popular with the patients you wish to attract. For example, seniors typically prefer morning hours, mothers with school-age children prefer hours when school is in session, and blue-collar workers like to come in after work.
You can also look at how you combine the services you offer. Adding massage therapy or exercise to your practice will attract different market segments. These changes can help you introduce your practice to a whole new audience.
Mistake #5: Failure to Market Systematically
This is especially tempting for many chiropractors because a great part of being in practice is seeing something you have developed become a reality. However, if your practice is only known by you, a few friends and family members, then what you have done is spend a lot of time planning, rather than growing your practice. Dedicate at least the equivalent of 10 percent of your patient-care hours to marketing. In the typical chiropractic practice, this will be between 3.5 and 4 hours each week. Set a routine and implement a system that becomes a natural part of what you do every week to promote your practice. Decide when you will market your practice and stick to it. Evaluate the results of your marketing efforts each week and make course corrections as needed.
Mistake #6: Failure to Cultivate Existing Relationships
It is twice and sometimes three and four times harder to attract a new patient from outside of your practice than to generate referrals from your existing patients. What are you doing to nurture the relationships with the family, friends and co-workers of your existing patients? Or do you find yourself on the treadmill of only pursuing new sources of patients?
Success in practice is not about your "busy-ness" – it's about working smarter to achieve your bottom-line goals. Which of your patients do you need to nurture more in order to gain more referrals from them? It's much easier to get referrals from a satisfied patient than it is from someone who has never had a personal experience with your practice. Start where you already have traction.
Mistake #7: Failure to Schedule Practice-Building Time
When was the last time you spend some serious time thinking about your practice and ways to improve it? Who are you in conversation with about improving your practice? Are you part of a network of other chiropractors who can help you sharpen your business skills? Do you have a coach or consultant who helps you work through your decisions and could save you time, money, and energy if you got great advice from them?
The sad reality is that many practices fail to meet their full potential because they do not make the changes necessary to help them thrive. Set aside at least 30 minutes each week to improve your practice. What are you doing currently that you could do better if you worked more efficiently? What is draining you? What can energize you to better performance? Taking the time to get the answers to questions like these can help you move forward and avoid common mistakes.
Look at your practice's revenue and ask yourself if you are leaving money on the table by making any of these seven common mistakes. It's so easy to get caught up with the demands of the practice and overlook simple things that can help increase your profitability.
Dr. Mark Sanna, a 1987 graduate of New York Chiropractic College, is a member of the ACA Governor's Advisory Board and a member of the President's Circle of NYCC and Parker College of Chiropractic. He is the president and CEO of Breakthrough Coaching (www.mybreakthrough.com).