As an audiologist first and foremost, becoming a business owner has proven to be a steep learning curve.
My focus had only ever been on the patient, and business considerations such as profit and loss had never been part of the picture. So when the NexGen Hearing Group offered me the opportunity to co-own a clinic, I was extremely excited, but also a little intimidated: suddenly I was expected to join terms like profit margin, retained earnings, net income, and fixed liabilities in my usual day-to-day work.
Despite my trepidation, our clinic grew by 61% in our first year, which has been phenomenal, and we continue to exceed our annual budget year after year. Many factors have contributed to our success, but one in particular stands out: the business planning I learned from the management team of NexGen Hearing Group. Below are some recommendations for all aspiring clinic owners on how to get started with your own business plan.
As you head towards the end of your fiscal year, you need to anticipate what the next year will entail and how you will build on your successes. The best way to do this is to perform a SWOT analysis. A SWOT analysis is a way to dissect your business and uncover your internal strengths and weaknesses, as well as external opportunities and threats. It’s important to do a SWOT analysis with your team because you invariably have to work together to achieve your goals – and new insights are ultimately what will make your business successful.
WORK is an acronym for:
- Strengths: the individual qualities of your clinic that set you apart from the crowd
- Weaknesses: gaps in your clinic and areas you know you can improve on
- Opportunities: potential avenues for growth and success
- Threats: what risks hinder the prosperity of your clinic.
Simply put, strengths are what you are good at. It is important to understand what makes your clinic successful and unique. I, and many others, believe that it is the clinician and support staff that the patient buys, so think about what makes you, you! Is it your years of experience, education, or training alongside someone reputable? Either way, identify it and promote it. Tell your patients and they will tell others.
Next, identify your weaknesses. It could be things you don’t do, or are hesitant to do, or something your competitors might already be doing. These are internal weaknesses over which you have no control.
Then look at the opportunities. These are external factors that could help your business grow. It could be a marketing opportunity or the introduction of a new product in your area.
And finally, review your threats. These are external factors that inhibit your clinic, but can normally be mitigated. Good examples are your competitors or a certain pandemic that we have all become too familiar with.
For more information on how to perform a SWOT analysis, I recommend visiting the BDC (Bank for Canadian Entrepreneurs) website.
The next step is to consider where your patients are coming from. Two key reports are typically used to locate this data:
- New Customer Reference Source: Do you ask if your patients arrive by signage or by word of mouth? Are they referred by general practitioners or ENT specialists? Are they from your newspaper ads? From there, rank your top five referral sources to get patients through the door.
- Sale by referral source: For clinics that have been in business for several years, this is often your client database or word of mouth; if not, this would be a great opportunity. Top referral sources for new patients don’t always match what you see on your sales report, and that would be an interesting difference to explore with your team.
These reports are a great way to identify where to focus your marketing efforts.
It’s important to accurately track referral source data so you can see how you’re capturing your audience. Usually this is done when a customer service representative taking a new booking asks how the new patient heard about you. Ask your customer service representative to assign the correct marketing reference code in your patient management system. It is also helpful to ask the person at the appointment to confirm that the correct referral code has been assigned. In some cases, people may have multiple referral sources and you need to decide which code is best to use.
The last step before you start planning your goals is to look at your key performance indicators (KPIs). KPIs help you objectively measure how successful you are in achieving a goal. I tend to use:
- conversion rate
- average sale price
- return for credit rate
- cost of goods sold
- gross revenue.
Typically, the numbers behind these KPIs are produced by your office management system. However, if this is not an option, your accountant should be able to help you provide the necessary data.
STRATEGIC BUSINESS DEVELOPMENT OBJECTIVES
Using your KPIs, my recommendation is to establish three to four key areas of strategic business development for the coming year. More than three to four will likely drain your limited resources and prevent you from achieving your goals. If you pursue less than that, the opposite may be true.
There are many ways to set goals: you can follow in the footsteps of John Doerr who recommends goals and key results, or use the more familiar approach, SMART goals. In both cases, the important factors are that the objectives should be specific, time-bound and measurable.
To choose your goals, I recommend reviewing SWOT analysis with your KPIs and referral sources to identify trends in your practice. An example of my 2022 goals is to increase my community outreach by 15% by March 2023. This goal is relevant to our clinic, as community outreach is among my top three referrals and top five sales sources. .
With each goal, outline a plan of how you will achieve your goal. For me, this means answering the following questions:
- Not: What concrete steps do I need to take to move from where I am now to my goal?
- Obstacles: What can prevent me from progressing and completing my plan, and how can I mitigate these risks?
- Solution to obstacles: How will you overcome the obstacles you have identified?
- Success Criteria: How will I know if I have succeeded? What KPIs should I use?
- Budget: How much can I afford to spend on this initiative?
- Completion date: When do I need/want to achieve this goal?
Create a worksheet, as shown on page 30, that will allow you to select an area of focus from your goal for each quarter. Break down each focus area into achievable steps and delegate who will be involved in this process; set a time frame and budget for each item. At each stage, you should be able to document your progress throughout the year and review your results as you enter the next fiscal quarter.
To make sure you stay on track for the year, schedule time in your schedule to review your business goals monthly. There may be a tendency to focus on filling clinic time with income-generating opportunities, but if you don’t allow time for these important administrative tasks, you’ll find that time has run out. elapsed and all those incredible goals you set for yourself at the start of the year have become wishful thinking.
And there you have it, happy business planning!