There is no question; we all make mistakes. Some of them are small, without much consequence; others are significant and come with serious repercussions.
But here is the paradox: we all learn by making mistakes!
- We learn to walk by falling, getting up, and trying again.
- We learn to ride a bike by crashing and getting back on the bike.
- We learn to read, swim, drive a car… first by doing it wrong. Then we get feedback and correct what we do until we get it right.
And even though we learn by making mistakes, most of us are not comfortable with the idea of making them. We even attach a degree of shame to it.
In school, kids who make repeated mistakes may be labeled as “slow.” In the workplace, someone may get a reputation for being a screwup. At times, someone may be told they’ll never amount to anything, and some kids get punished when they bring home a bad grade.
While unfortunate, it’s what we do. But this type of thinking leaves us standing with baggage in both hands. Over time we become fearful of making significant mistakes, but sometimes, we’re afraid of making any mistakes.
Of course, the fear is different for all of us; for some, it’s stronger than for others. Some allow fear to stop them in their tracks, while others plow through any fear they may have. But regardless, the fear of making mistakes has the potential to affect every aspect of our lives, including business.
Yes, business people make mistakes too.
They don’t pop out of the womb as a complete success. They learned the necessary skills, made mistakes along the way, and got better over time. And if you’re a clinician, you learned, made mistakes, and grew right alongside your practice.
So don’t be afraid to make mistakes, because you will make them. What matters is how you respond to and deal with the mistakes you will make.
Ideally, of course, you’d avoid making any mistakes from the get-go. But that’s unrealistic, wishful thinking.
You can’t avoid making mistakes. But what you can do is be aware of common business mistakes, prepare for and sidestep them if possible.
But before we talk about how you can avoid common business mistakes, first let’s see what they are.
Here are five of the most common business mistakes:
- Doing everything yourself, not getting help sooner
- Underpricing your services, not charging enough
- Relying on verbal agreements instead of putting it to paper
- Failing to identify and fix cash flow problems
- Knowing your numbers
Now, let’s see how you can avoid making these common business mistakes.
Doing Everything Yourself
While at first, you may have to do most everything yourself, don’t let it become a habit.
Let’s face it, you can’t do everything yourself, not if you want your practice to thrive and keep your sanity. There are just not enough hours in the day. Besides, it would be best if you focused on revenue-generating activities.
So if you don’t have the resources to hire help at the beginning, hire help as soon as it is feasible for your practice. When you add the right type of support to your practice, it will make you more productive, generate more revenue, and allow you to keep your sanity.
Not Charging Enough
Finding the right price point for services tends to be a challenge for many clinicians. The right price point should feel comfortable, allows you to pay the bills, all while staying within the confines of what’s legal.
At a minimum, your rate structure must cover your expenses, including salaries. Over time, your rate structure should also generate a profit; after all, you want to be rewarded for your efforts.
When you set your rates, be mindful of Medicare and insurance reimbursements, and what other providers in the area are charging. While more critical when first starting, you don’t want to be the least expensive nor the most costly provider in your market. Go for the middle ground.
It’s easier to slowly increase your rates, compared to lowering them form a level set too high from the start.
Not Putting It To Paper
We have the best intentions, but sometimes, best intentions are not good enough. And as strange as it may sound, we all hear, see, and mean different things during a conversation or negotiation.
That’s why it is so important to write it down. It’s easy to say something and assume the other party knows what we mean; unfortunately, that is not always the case.
We all hear, see, and communicate through our filters. And to complicate things, typically, we don’t operate on the same wavelength or channel.
Don’t rely on yours or someone else’s memory or good intentions. And don’t jeopardize a good business relationship by making assumptions; always write it down, no matter if you’re dealing with a stranger or a friend.
Be clear about what you want to say, and write it down!
Failing To Identify Cash Flow Problems
No matter the business, when cash flow dries up, it spells trouble.
While your business may bring in more than enough revenue, if there isn’t enough cash flow, you may not be able to keep your doors open, at least long enough until the next reimbursement hits your account.
How can something like this happen in a practice? Here is a possible scenario:
Let’s say you work with one or two big insurance carriers. You bill for your services, and usually, the company reimburses like clockwork.
Next thing you know, there is a problem with the insurance company. All of a sudden, reimbursements are trickling in, and so is your money. If you don’t notice the change in payments, you could find yourself in deep trouble.
How do you prepare for something like this? You monitor your cash flow: what comes into your office and what goes out. Regularly run reports to keep your finger on the pulse of your practice, which brings us to the next mistake.
Know Your Numbers
Noticing problems with your business comes down to knowing the numbers and paying attention to them.
Let’s stay with the earlier example. Let’s say you just noticed that you wouldn’t be able to pay your rent next month, not if you want to make payroll too.
It looks like there is a cash flow problem, yet you don’t know why or how it happened. But, had you looked at your AR reports (accounts receivable), you would have known about the problem last week.
Most often, paying attention to your numbers and enjoying a steady cash flow go hand in hand. However, unfortunately, both get frequently lost in the day-to-day shuffle of running a practice.
In Summary…
We all make mistakes; it’s unavoidable.
We can learn from the typical business mistakes made by other business owners, so we don’t have to repeat them ourselves.
- Regardless if you’re a solo provider or not, get some help, even if just a few hours here and there. It will reduce your stress, boost your productivity, and free you up to see more patients (if you’d like).
- Be confident in yourself. Don’t be afraid to charge based on the benefit and value you provide to your patients.
- Commit any negotiations to paper. Don’t rely on memory or the good intentions of others; protect yourself and your friend by putting it down on paper.
- Monitor your cash flow: what comes into your office and what goes out. Run and review reports to keep your finger on the pulse of your practice, for without cash, you won’t be able to keep the doors open.
- Monitoring cash flow and knowing your numbers go hand in hand. Noticing problems with your business comes down to paying attention to the numbers.
Don’t be afraid to make mistakes, because chances are you will make some. What’s important is how you respond to and deal with the mistakes you will make so that you won’t repeat them.
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By Johanna Hofmann, MBA, MAc., EAMP; regular contributor to the NPBusiness blog and author of “Smart Business Planning for Clinicians.”