Evidenced-based practice or business management works; take out the guesswork in running your practice or business with proven and cost-effective internationally best practice tools and techniques!
Every practice or business owner wants their business to thrive, but it can be tough to keep the money coming in the door while staying on top of all the necessary paperwork.
One way to ensure success is to understand the behaviours that separate a well-managed practice or business from one that’s just muddling through.
Getting the basics right
1. It’s not just about making money
Making money is not why you do what you do, it is a result of what you do well.
After your health, it is time to build the second most invaluable investment in your life – your practice or business – with strong foundations. Thinking that running a practice or business well is about cutting costs or corners is a big mistake and can be a serious risk. Be wary of those who are in it for the quick dollar or short run. Cutting costs or corners can provide a false sense of security for the owners, staff and customers. This is much like going cheap on the most important tools of the trade that keep a roof over your head and food on the table. In this new digital world, it is easier than ever to get caught out and some things are not worth taking the risk.
There is no such thing as fast money – taking a slower and structured approach will ensure you set up a socially responsible and sustainable practice and will save you money in the long run. We do not mean legal and tax structures – although they are still important, the smart money lies in how you work every day.
2. Keep informed
Understand that there are four key areas to watch when running a practice or business. It is important to set and share these expectations with your fellow co-owners (if you have them) and staff for feedback. It needs to be a shared vision. Consider: what do you want your practice or business to look like?
We have provided some examples below you can use. In priority, the following steps should be taken. The analysis below is from the internationally well regarded Harvard University’s Balanced Scored Card. This is used by the majority of leading companies in the US, Europe and Asia.
Step 1 – Finance
Work out how much your practice or business is worth and how much you would like it to be. This is your single most important investment that meets your lifestyle and retirement needs. You need a structure and goal – don’t throw good money after a bad idea.
Step 2 – Customers
Be clear of who your customers are. They are the ones that pay your practice or business expenses. For practices, it is the patients and the providers who pay a service fee to the practice or business. Ask, are they happy? Are they committed, or just interested in the practice? Do they love it or like it? How do you want them to feel about you?
Step 3 – Process
Be clear how you deliver those goods and services. Is it a manual or automated process? Which one is more reliable in the long run? Which one is more sustainable that will meet the practice’s or business’s needs? How will you monitor progress? For example – will you use automated smart systems that compare your performance to the industry?
The example below is a national monthly practice benchmarking report our clients use to contextually manage their business in a useful and meaningful way. This enables timely and less overactive decisions e.g. if patient numbers are nationally low for a certain time of year. This means you do not have a poor or underperforming practice. No need to panic.
Step 4 – Learning and Growth
How do your staff learn about new systems and processes? How are staff or customer expectations monitored? How do they receive and provide useful and meaningful feedback? Do they love working or like working for you?
3. Keep up to date
The final positive marker of a well-run business is that all its details are up to date – particularly with the ATO and other statutory bodies.
Although many of these indicators are straightforward, it is surprising how many Practices don’t take these simple actions. We understand some costs like legal and accounting fees may feel like a grudge purchase – like going to the dentist. You need to budget for it, as with the right experienced advisor at the helm it is worth it in the long run.
Behaviours to avoid
Just as there are habits that mark a well-run practices or businesses, there are behaviours common to operations heading for trouble.
Practices sometimes expose themselves to risk through decisions such as omitting income by depositing it into business accounts that are for private accounts. For example, money collected on behalf of a provider and deducting payments without written (via a signed service agreement) permission run the risk of being accused of fraud.
The same goes for failing to account correctly for private use of business assets or funds.
Making errors because you don’t understand your tax or your legal responsibilities is also a sign that things are not being well-run.
4. Nobody can be an expert at everything
Bring in the professionals
With so many rules and regulations, it’s not surprising that practice owners may occasionally overlook some of their obligations. There is an easy solution though.
Well-run practices seek professional advice when they need it. We can work with you to improve your business overall, not just to meet your tax obligations.
In fact, the ATO’s 2017-18 research and audit work with around 120,000 small businesses indicated that those who have regular contact with a tax professional are more likely to get things right.
Maintain good business records, keep an eye on your competition using Health and Life’s new monthly Business practice benchmarks.
5. Just do it
Well-run practices and businesses know when they need to walk and chew gum. As in the Nike commercial Just Do it. They have to act both on urgent as well as important matters. They give equal priority to both and book it in their calendars. They have a low tolerance to missed deadlines unless there is a good reason for missing one. Staff are rewarded for this, as the bottom line grows when everybody’s expectations are being met.
Live Monthly National Practice Benchmarks
Doctors Pay (Service Fee) Calculator
Doctors and Staff Contracts Video
If you think your business could do with a financial tune-up, contact us.