This is a topic that all too often falls to the wayside, but it is probably of the most important for anyone involved in a medical practice of any kind. This doesn’t mean that you have to focus less on the patients, procedures, or staying abreast of the latest technologies and trends. But it should mean that you build in the time, tools, and reports to make sure that your practice is as profitable as it can be.
Focus on the Literal Bottom Line By Spending Smart
While profit may not be the only reason a clinic, spa, or practice exists, it certainly is always a driving factor and one of the biggest key indicators of the health of the business. Profitability has two sides to it, gross profits and net profits. Profit is otherwise defined as:
The surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an enterprise. Profit is reflected in reduction in liabilities, increase in assets, and/or increase in owners’ equity. It furnishes resources for investing in future operations, and its absence may result in the extinction of a company. As an indicator of comparative performance, however, it is less valuable than return on investment (ROI). Also called earnings, gain, or income. (Source).
At the end of the day the profit is what the business owner makes. A savvy owner will calculate this as post-tax, so that they know the true numbers. Every single cost matters. From a box of tissues and bottles of hand sanitizer to payroll, equipment, or the cost of CME’s (like you get for attending SCALE 2019 Music City), all of these are necessary costs of doing business. Afterall you have to spend money to make money. The question is; are you spending more than you need to? And are you measuring and tracking the impact of every dollar spent?
According to the American Med Spa Association:
Some of the factors tracked by top medical spas include:
- Dollars per hour per treatment per provider
- Dollars per hour per provider
- Margin per treatment per provider
- Return on investment per provider
- Return on investment per equipment
- Conversion rates
- Return on investment on email campaigns, marketing campaigns, social media
Market Your Business
HealthCare Success is a specialized marketing firm that gives the following advice: people do not buy procedures, they buy happiness from people they trust. Understanding this, as well as the importance of a good marketing plan, buys the most effective advertising. It’s also good to have a physical office space with good curb appeal and an atmosphere that matches the expectations of your clients. You also need to make sure that your marketing plan is legal, using language to sell your products, services and procedures that does not violate state or federal laws, including HIPAA. (Source). Also you need to establish and promote your brand.
In some cases it might be smarter to hire an outside firm that specializes in this area to put together all the pieces than to try to do this yourself; but if you have a background in marketing or a staff member with expertise, there are many very successful businesses in our field who leverage in-house resources. Whichever direction you take, assuring that you have the following elements will ensure that that you have your bases covered (Source):
- Brand – it must be inviting, accessible, and high-end
- Website – your most essential marketing tool
- Landing Pages – where visitors convert to leads and leads convert to patients
- Blog – a resource to educate prospects and existing patients about the latest trends and treatments
- Social Media – engaging prospects in the places where they spend their time
- Email – still a go-to lead nurturing tool
- Online Advertising – turbo-charging your other digital elements
- Offline Marketing – integrating traditional media and publicity into your digital strategy
- Patient Reviews – taking word of mouth to the next level
- Events – in-person marketing that puts a face to your med spa
- Budget Planning – getting the biggest bang for your buck
While a significant amount of your marketing should be focused on building your reputation and word of mouth, it is unlikely that this alone will get you where you need to be. Strong branding, good marketing, and effective traditional and digital advertising are among the best ways to build your practice, retaining your current clients and bringing in new ones.
Invest in Good Practice Management Software
Software systems can save you time, money and headaches. Luckily we are in the 21st Century and there is a technological solution for almost every scheduling system, claims management, patient check-in, patient management, billing, tracking and reporting component that you can think of as it relates to your practice. In fact, there are many different software and hardware solutions, and an endless number of technology companies and consultants that can guide you through the decision of which system to use. At the very least, however, you should look at systems that have proven track records, high customer reviews and meet your needs now, while allowing for scalability.
Capterra has published a list of the best medical practice management software, which is a great resource for you to use as a jumping off point in your search for this invaluable tool. It gives basic summaries, assigns ratings, and allows comparison of 394 systems. Some of the best of those will be available for you to try and learn more about when you visit the vendors and exhibitors at SCALE 2019 Music City.