3 Essential Strategies Avoid Small Business Failure on NPBusiness.ORG

3 Essential Strategies To Avoid Small Practice Failure

“I just didn’t see it coming!”

If you’ve ever uttered these words, you know what I mean.

Sometimes, it’s like “things” sneak up on us…

  • A leaking roof
  • A relationship that’s falling apart
  • A financial dilemma

While it may seem that “situations” appear out of nowhere, could it be we’re missing the early warning signs?

Like…

  • The small stain on the kitchen ceiling?
  • Less and less quality time spent together?
  • The missed payments and frequent late charges?

You see, most problems don’t appear overnight. Most develop and expand until they reach critical mass, at which point they can no longer be ignored.

True for Business

The same thing happens in business! All too often early warning signs are either missed or altogether ignored.

But there are consequences when warning signs are missed.

You’re already aware of the countless events that could lead to problems for your small practice.

There could be:

  • regulatory challenges… causing you headaches
  • resistance from employees… resulting in temporary discord with staff
  • problems with your lease… that could leave you scrambling to find new space
  • trouble with taxing authorities… that could cost you fines and late payments
  • complaints from patients… that could lead to an investigation or even a lawsuit
  • insurance companies failing to reimburse you… that could cost you revenue and problems with your cash flow
  • Financial problems because of low cash flow… that could leave you unable to meet your financial obligations or even having to shut down your practice

But here is the thing…

In the above example, only regulatory and lease are outside your direct control. All others are directly affected by your actions and most likely gave early warning signs of “trouble ahead.” 

3 Strategies to Avoid Failure

Here you are…

Your small practice has been humming along for years and all the sudden… BAM.

And you don’t know what hit you!

You find yourself putting out one fire after another.

How can this be? What happened? How did I miss this?

You probably missed or perhaps even ignored the early warning signs, such as:

  • An employee alerted you to a problem… but you didn’t do a thing about it
  • A letter from the IRS… but it didn’t get opened and then was lost
  • A patient voicing frustration and anger… but you didn’t take the time to talk with her, knowing all too well “she tends to complain anyway”
  • A growing AR… but you wait and wait, and wait, instead of being proactive
  • You can’t meet your monthly financial obligations… but you don’t stop to investigate where the problem is

All these examples are early warning signs. They offer you the opportunity to respond and intervene before problems can get out of hand.

When you respond early, you stand a chance to contain problems, implement solutions, and minimize the potential damage.

Here are three specific, simple strategies you can use in your small practice. Adapt them to your needs and utilize them to spot problems early.

This allows you to minimize the potential damage; and by default, it will improve your process and your business too.

Be Aware…

Stay alert to what goes on in your office; aka pay attention! And I don’t mean micromanage your staff and everything that happens.

While I understand you’re a busy, practice owning clinician, you must maintain a good “feel” for what goes on in your office, including:

  • How well is staff performing?
  • Is everything getting done?
  • How is the customer service?
  • Are all payments collected at the time of service?
  • Are patients satisfied or do they complain?
  • Is the office in compliance?
  • How efficient and effective is the billing?
  • Is there a lot of money outstanding?
  • Etc…

I realize it’s tempting to outsource and delegate as much as possible. And all in all, that’s good practice, but only once you have systems in place that allow you to track the performance and progress of your small practice.

If you delegate too much, too soon, you risk losing sight and control of what goes on in your office.

Of course, what you’ll delegate depends on the person; is it a new hire, an experienced, long-term employee, or even your spouse? The higher the level of trust you have, the more you might delegate.

Don’t Ignore Bad News…

Don’t stick your head in the sand when you’re served with bad news. It’s highly unlikely things will change because you ignore them.

On the contrary, ignoring bad news tends to make the situation worse. So, if you discover something is not working, get busy, and do something about it.

Even if you must do what is uncomfortable or you’d prefer not to do it at all, do it anyway.

Here’s an example.

Let’s say you have an employee working for you who is not always the “friendliest” with patients. A few patients have expressed their “feelings” about this employee; some can’t believe she is still with you.

Ironically, this person works your front desk. Yes, she is the first point of contact in your office!

For the majority of the time she is okay with patients; but boy oh boy, not when she’s having a bad day! Everybody will know about it, and that includes patients.

You’ve talked with her before, but things are just not getting better.

Perhaps you need to let her go? Alternatively, you could offer her a position that doesn’t require direct interaction with patients. You then could fill her position with someone who has strong customer service skills.

Whatever it is, you must do something. You can’t afford to wait too long, not if you want to avoid potential problems down the road!

Focus On What’s Important…

Focus on what’s critical to your business and your bottom line:

  • Your patients:
    • Remember that patients are the reason you are in business
    • Maintain good relationships with your patients
    • Continually attract new patients to your office
  • The services you provide:
    • Don’t only offer what they need, but listen to what they want
    • Focus on delivering high-quality services; continually improve the customer experience
  • Your Accounts receivables
    • Fully understand your AR
    • Understand the correlation between AR and cash flow
    • Focus on working and tracking your AR, ongoing

While there are a number of other things that almost made the list, I believe these three are the most important ones. Ignore any one of them and your business might suffer, and you will pay the price.

But pay attention to them, even if only marginally, and your small practice will benefit from it.

You’ll gain a deeper understanding of your business and how the individual pieces come together to make the whole machine hum.

 

We’d love to hear from you… leave your comment and tell us what you think!

 

By Johanna Hofmann, MBA, LAc; regular contributor to the NPBusiness blog and author of “Smart Business Planning for Clinicians.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.