Think about the medical practice debt your operation is carrying. Now think about YOUR quality of life…are you debt stressed?
Starting a practice is expensive; the machinery, furniture, building improvements, and supplies, could run into the millions. Typically, a start-up is financed by a bank loan which means there is medical practice debt on the balance sheet. That debt may cause you to struggle with managing cash flow and can negatively impact the growth of your practice.
When a practice can no longer meet its financial obligation, it has become insolvent. Once a company is no longer solvent, all assets will be liquidated, and it will cease to exist. Obviously this is not a good place to find yourself.
OK – So that’s the negative. Now let’s turn our attention to the positive! We understand why medical practice debt may have you stressed, but we also know the best ways to reduce this stress.
Let’s look at four ways to destroy your medical practice debt:
1) Mind your balance sheet. View your balance sheet on a regular basis to monitor cash and debt levels. Keep track of solvency ratios to ensure the practices fiscal health. This comes back to the old saying “what gets measured, gets done!”. It’s the same with your finances. Paying attention to these numbers on a regular basis helps you track progress and make better financial decisions!
2) Yes, you need to kill your medical practice debt… but you also need to focus on being profitable. Continue to market your practice! When practice owners are “feeling the pinch,” they too often look at their marketing and advertising as an opportunity to cut expenses. DON’T BE ONE OF THESE PEOPLE! The solution to your problem is better found through growing revenues than cutting expenses. Marketing and advertising are the fuel that will help drive practice revenue.
3) This may sound counter to point #2, but YOU SHOULD evaluate expenses and immediately cut costs that are just “nice-to-haves” or that are not required to maintain and grow your operations. If you take a hard look, we’ll guess there’s some waste that, once eliminated, flow right to profits.
4) Review the practices daily procedures; money can always be found through streamlining and innovation. In our experience, we’ve found that processes may exist that are inefficient or outdated, yet they continue exist because “that’s the way we’ve always done it”. Take a step back and evaluate your processes and procedures objectively. You may find ways to do things BETTER and AT LESS COST.
Managing medical practice debt can be tough, especially as you’re jugging these challenges while maintaining high standards of patient care. If you feel like you could benefit from our expertise, just reach out to set up an initial consultation with us!