As an audiologist first and foremost, becoming a business owner proved to be a steep learning curve.
My focus had only ever been on the patient, and business considerations like profit and loss were never 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 incorporate terminology like profit margin, retained earnings, net income, and fixed liabilities into my regular day-to-day work.
Despite my trepidation, our clinic grew 61% in our first year which was phenomenal, and we continue to exceed our annual budget year on year. There are many factors that contributed to our success story, but one in particular stands out: the business planning I learned from NexGen Hearing Group’s management team. Below are some recommendations for any aspiring clinic owners out there on how to get started with your own business plan.
When you are heading toward the end of your fiscal year you need to look ahead at what the next year will entail and how you are going to build on your successes. The best way to do this is through a SWOT analysis. A SWOT analysis is a way to dissect your business and uncover your internal strengths and weaknesses, and external opportunities and threats. It’s important to do a SWOT analysis with your team, as invariably you need to work collaboratively to achieve your goals – and fresh perspectives are ultimately what will make your business successful.
SWOT is an acronym for:
- Strengths: your clinic’s individual qualities that makes you stand out from the crowd
- Weaknesses: your clinic’s shortcomings and areas you know you can improve on
- Opportunities: potential avenues for growth and success
- Threats: what risks stand in the way of your clinic thriving.
Simply put, strengths are what you are good at. It’s important to understand what makes your clinic successful and unique. I, and many others, believe it is the clinician and support staff that the patient buys into, so think about what makes you, you! Is it your years of experience, your education, or training alongside a reputable individual? Whatever it is, identify it, and promote it. Tell your patients, and they will tell others.
Next, identify your weaknesses. These may be things you are not doing, or reluctant to do, or something your competitors might be doing already. These are internal weaknesses those you have no control over.
Next, look at opportunities. These are external factors that could help your business grow. This could be a marketing opportunity or introducing a new product to your area.
And finally, review your threats. These are external factors that inhibit your clinic, but that normally can be mitigated. Good examples are your competition, or a certain pandemic we’ve all become too familiar with.
For further information on how to perform a SWOT analysis, I recommend visiting the BDC website (the Bank for Canadian Entrepreneurs).
The next step is to review where your patients are coming from. There are typically two key reports used to locate this data:
- New client referral source: Ask yourself if your patients coming in from signage or by word of mouth? Are they referred by primary care physicians or ENTs? Are they coming from your newspaper advertisements? From here, rank your top five referral sources for getting patients through the door.
- Sale by referral source: For clinics who have been in business for several years, this is often your client database or your word of mouth; if it isn’t, then this would be a great opportunity. The top referral sources for new patients don’t always align with what you see on your sales report, and this would be an interesting difference to explore with your team.
These reports are a great way to identify where to concentrate your marketing efforts.
It is important to track the referral source data accurately so you can see how you are capturing your audience. Usually, this is achieved as a customer care representative taking a new booking asks how the new patient heard about you. Have your customer care representative allocate the correct marketing referral code into your patient management system. It is also helpful to ask the individual during the appointment to confirm that the correct referral code was allocated. In some cases, people may have multiple referral sources and you need to decide on the best code to use.
The final step before getting into your goal planning is to review your Key Performance Indicators (KPIs). KPIs help you objectively measure how successful you are at reaching a target. I tend to use:
- conversion ratio
- average selling price
- return for credit rate
- cost of goods sold
- gross revenue.
Typically, the numbers that underpin these KPIs are produced by your office management system. However, if this isn’t an option, then your accountant should be able to assist with providing the necessary data.
STRATEGIC BUSINESS DEVELOPMENT GOALS
Using your KPIs, my recommendation is to establish three to four key areas of strategic business development for the upcoming year. More than three to four will likely overstretch your limited resources and prevent your goals from being achieved. If you pursue fewer than this, the opposite may be true.
There are many ways to set goals: you can follow in the footsteps of John Doerr who recommends Objective and Key Results, or use the more well-known approach, SMART objectives. In either case, the important factors are that the goals must be specific, time bound, and measurable.
To choose your goals, I recommend reviewing the SWOT analysis together with your KPIs and referral sources to identify trends in your practice. An example from 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 in my top three referral sources and top five sales sources.
With each goal, outline a plan of how you are going to achieve your goal. For me, this means addressing the following questions:
- Steps: What are the actionable steps I need to take to move from where I am now to my goal?
- Obstacles: What may prevent me from progressing and completing my plan, and how can I mitigate those risks?
- Solution to the obstacles: How you are going to overcome the obstacles you identified?
- Success criteria: How will I know if I have been successful? Which 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 working document, as shown on page 30, which will allow you to select an area of focus from your goal, for each quarter. Break each area of focus into actionable steps and delegate who will be involved in this process; set a deadline and budget for each item. With each step 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 that you keep on track for the year, allocate time in your schedule to review your business goals monthly. There can be a tendency to focus on filling clinic time with revenue-generating opportunities, but if you do not allow time to complete these important administration tasks, you will find that time has passed by and all those amazing goals you set yourself at the beginning of the year have become wishful thinking.
And there you have it, happy business planning!