Part 1 – What To Check
The majority of small businesses started within any given year will be gone within five years. And 80% of the ones left won’t make it past the ten-year mark.
Scary numbers, right?
So why do new small businesses pop up every day, even though most people know there is a greater than 80% chance of failing?
Because we are human! And we all think we’re different:
- My business is different…
- I’ve been doing this for years; I know my stuff…
- I have a great product, great service…
- I’m a clinician and don’t need to worry much about business…
- I have a great idea for a business…
- I can’t fail in this industry…
Unfortunately, this is not how “the cookie crumbles…”
- You can be a great clinician but still, fail in your business.
- You can have the greatest product but still, fail…
- You can have the best “mousetrap” ever and still fail…
- You can have the best idea but still, fail in your business.
Because there are no more guarantees in business than there are in life.
But just because we’re not handed a guarantee to strike gold or stumble onto a fortune, it won’t keep us from trying to beat the odds. And that’s where the “Wellness Exam” enters the picture.
A wellness exam? Yes, that’s right!
You do them every day on your patients, so why not use the same concept for your business?
A wellness exam allows you to quickly assess the health of a patient. By utilizing predefined markers, you’ll know if the person is within a healthy range or if there’s a problem.
It’s not 100% fool proof, but it’s pretty effective in ringing the alarm bell if something’s not right.
For example, a simple check reveals that blood pressure if off the chart. Now you know you need to drill down deeper to find the cause.
And once you know there’s a problem, you can take the proper steps to address it. But if you don’t know that there’s a problem to begin with, there’s nothing you can do… because you have no idea, there’s an issue in the first place.
The Same Applies To Business…
Well, the same applies to your business, your practice. If you don’t keep tabs on your business, it’s easy to miss a red flag. You’re less likely to miss a warning sign if you check on key performance areas of your business on a regular basis.
The secret is deciding on what key performance indicators, or key metrics, to track in your business:
- Which key metrics are useful for your business?
- What are the ranges of performance for each metric?
- How often are you going to do the wellness exam?
Once you’ve made these decisions and commit them to paper, all that’s left to do is the wellness exam itself.
But before I get ahead of myself… let’s talk about what you might include in your wellness exam.
Think about your patients. Even though, most of what you check gets dictated by “standard of care,” you know exactly which numbers to check and what to track.
Of course, you’ll be checking and expecting different numbers, depending if your patient is:
- An infant
- A young child
- An adult
- Or geriatric
And just as there is “Standard of Care” in medicine, there are “best practices” in business. Perhaps you want to model some of these best practices when deciding what to include in the wellness exam for your business.
Keep in mind that every practice and every business is different; no two are alike. Therefore, the key metric you track may vary from what someone else tracks in their business.
Let’s say you started your business six months ago… It may be far more important to know that you’re on track to meet break even, instead of knowing what your business has accomplished within its five-year plan.
For an established practice, however, knowing how the business is performing concerning its five plan may be important.
A Common “Dis-Ease”
There is one more thing I’d like you to keep in mind. We don’t like to talk about it, but this “dis-ease” afflicts many providers.
We don’t like to talk about money!
But here is what I want you to keep in mind. The purpose of your business is to generate income. Some call it profit, but I’m going easy on you,..
Strangely enough, nobody would expect you to put in 60 hours working in a clinic without a pay check. So why do some people think, providers and patients alike, you shouldn’t make a profit in your own clinic?
But let’s get back to the key metrics to track in your practice. While they vary depending on the individual practice, here are some metrics commonly tracked:
- Quality of customer service
- Quality of services provided
- Employee management (if employees)
- Compliance review
- Promotional efforts (website, social media, ads)
- Record keeping system
- Back office operations
- Financial management
- Business plan review
Don’t worry if you’re not currently looking at any of the above information…
In the next article, I’ll discuss the above metrics in greater detail. I’ll give you some ideas on how you might implement and start using them.
For now, why not get the first Wellness Exam on your schedule?
By Johanna Hofmann, MBA; regular contributor to the NPBusiness blog and author of “Smart Business Planning for Clinicians.”