I don't always understand my husband's rants following his many golf matches, but this time, I knew exactly what he meant.
My business had a phenomenal year of growth in 2010 and a good first quarter this year, but things seem to have ground to a halt in the second quarter. Because our protocols, policies, and marketing efforts had remained the same, I had to wonder, “How did the wheels fall off the bus when everything was going so well?”
When we get busy and are focused on seeing patients, it is easy to lose track of business. It's imperative to make time every month to measure key indicators that illustrate whether the business is moving in the right direction. Even when you regularly review your numbers, one or two small changes can significantly affect business. I have experienced this many times over the years, usually for some common reasons.
Failure to track performance
The only way to know conclusively what is happening in a business is to track the numbers. Being influenced by bad numbers, or no numbers, is an easy way to be led into a false sense of security about the status of a business.
Some business owners rely on their accounting professional to keep an eye on the financial health of the business, but it is a common but disastrous misconception that an outside accounting firm hired primarily to do your taxes will keep watch over the financial health of the business. Unless you can afford to hire a chief financial officer, and most hearing healthcare practices cannot, measuring and monitoring the financial health of a practice is our job. Aside from seeing patients, it's the most important job we have.
When you are busy, it is easy to let costs get out of line. Review your profit and loss statement each month, and compare it with your numbers from the prior year. Has profitability increased or decreased? Is the cost of goods higher or lower than previous months? Have your accounts receivables gotten out of control? Your total receivables should be less than one month of average sales. If not, get to work collecting balances that are more than 30 days old. Good cash flow is essential for maintaining a healthy business.
Failure to hold staff accountable
Most practices employ at least one support person. While we would like to believe that employees will do their job without any management, the fact is they must be regularly supervised to keep their performance on track. Good management means giving employees feedback on a regular basis so they know if their job performance is meeting our expectations. No one likes confrontations so it's tempting not to discuss small problems with employees, like failing to make a patient feel welcome, but small problems become big problems. Employees sometimes need a little help to live up to their commitments, and they should be keenly aware that when goals aren't met or jobs are not completed, there will be appropriate consequences. Consequences aren't meant as punishment, but serve as a necessary means of guiding employees’ behavior.
Failure to market
If there's one rule I've learned, it's that you have to market if you want your business to grow. After being in business in a small community for more than 28 years and marketing consistently, I still run into people who have never heard of my business. It is difficult for most practice owners to find time to develop a formal marketing plan. If you don't want to waste money on marketing, you have to follow a written plan, and then measure whether your efforts resulted in increased net revenue.
A great source of potential revenue is marketing to your current patients. People who suffer with hearing loss are always interested in hearing better. While every patient may not be ready or in a position to purchase new hearing aids, they want to be kept informed of what is available. If you don't tell your patients about the latest technology, your competition will. Stay in touch with your patients by contacting them at least four times a year. Send out newsletters and follow-up letters to reconnect with patients you haven't seen in a year. Consider offering a trade-in program, an extended service plan, and more flexible payment options. Consistently marketing to your own patient base is a good way to keep the wheels from falling off the bus.
After some investigation into my business, I learned that my pricing needed to be adjusted. My recall specialist had changed our usual protocol, the number of re-evaluations had decreased, and our latest marketing efforts weren't yielding new patients. With the necessary changes in place, I am happy to report that business is rolling along smoothly again—for now, anyway.
GYL'S e-GUIDE TO MANAGING FOR SUCCESS
For more tips on how to stop the wheels from falling off the bus, view Gyl's corresponding video online at http://bit.ly/GylsGuide.
Don't forget about our collection of Gyl's Guide articles on thehearingjournal.com. Access this link online to view:http://bit.ly/GylsCollection.© 2011 Lippincott Williams & Wilkins, Inc.