I see many, many doctors who have enormous anxiety about investing money in their Practice. They “can’t afford it,” or they “don’t have enough cash flow,” the list of excuses goes on and on. But the fact of the matter is, you have to invest if you want your business to grow. You have to invest in new and better facilities, in training your staff, in marketing your services, in ways to provide the absolute best care to your patients, and in creating the best experience for your patients.
So if you notice yourself saying “I can’t afford it” fairly often, stop and ask yourself… Do you understand the payoff math? And are you checking your numbers?
The only way to really get comfortable with investing is to actually make an investment, and then track the results. This will allow you to see the ROI in your business, and will give you the confidence to continue making investments.
However the FIRST step of this process is understanding the difference between an investment and an expense.
An expense doesn’t have a return. When I buy an expensive watch, I do it because I really enjoy owning nice watches. It’s almost a hobby for me. I don’t fool myself into thinking it is going to somehow help my business improve. That doesn’t mean I’m not allowed to buy nice things just because they don’t create a return; it just means I can’t lie to myself about it. I understand that this is purely an expense.
On the other hand, an investment should create a return, even if that return is distributed over a period of time. A new building, for example, is an investment with a very high return. In fact, all it really takes to illustrate this point is a little bit of simple math. So, grab your calculator and let’s crunch some numbers.
Let’s say you are in a building with four treatment rooms, and are producing $1 million per year. Buying a building with triple the capacity and space for 12 treatment rooms will cost you around $1.5 million.
1) Calculate how much you make per treatment room by dividing your annual production by your current number of treatment rooms.
($1,000,000/4 = $250,000 per treatment room.)
2) Then multiply this per-room figure by the number of treatment rooms you’d gain if you bought the new building. Triple of 4 is 12, so that’s 8 more treatment rooms.
($250,000 X 8 = $2 million.)
That’s $2 million on top of what you’re already producing right now!
Suddenly, it doesn’t look like a huge expense anymore, does it? You could invest $1.5 million for a return that’s double what you produced this year. The investment would be paid off over a period of time, while your $3 million in production would pour in year after year. Once you do the payoff math, you can see that it’s actually a tremendous investment!
Too many people lack the financial knowledge and expertise to do the payoff math, so they don’t feel comfortable making wise investment decisions. Instead, they avoid the math and the decision-making entirely, and allow their business to stagnate. Five, ten, twenty years of owning a practice and they may never see significant growth!
If this applies to you, you have got to pull yourself out of that slump. You need to recognize the power of a good investment, one that will build your business, and your net worth. A “can’t afford it” perspective will prevent you from making decisions that are ultimately necessary for Practice growth. To discuss your investment ideas and create a plan to headstart your Best Year Ever, call 866-917-2808 today! Make the decision to invest in your future by investing in your Practice.
Until next time,