Right Size

I've had a few interesting conversations with Clients this week around business and the economy. Fundamentally, all three discussions came down to the same point... Each of them said in their own way, "I've been in practice for some time now and am struggling to make ends meet. What should I do? Where do I start?


Each had cash flow problems and practice wasn't much fun any more.


Interestingly I received the same reply from all three owners when I asked what their profit margin was?" Each reply was simple and to the point, "I don't know." There was more than a small twitch of uncomfortableness in each of their responses. Interestingly all three had been in business for some time and each had an accountant... Even more revealing was their response when I asked what their intended profitability was. Again, each said they didn't know.


So how does one address issues of cash flow when they don't know their profitability? They don't! Thus the problem...


Whether one is an owner or an employee, profitability matters - its either a matter of return on investment for you and your family, or its a matter of job security for you and your family. Either way it matters!


Every business with revenue has an opportunity to make a profit regardless of the amount of revenue that is coming in. But, only if one knows their profit or loss, and where the money is going before they get their share. Its a simple matter of right sizing expenses for the revenue that is coming in. Doing so means tough decisions but it also means profitability.


So here's today's question whether you are an owner, manager, employee, or independent contractor, "What is your profitability?" You can't afford to not know! And, "What could it be?" "What portion of your family's reward are you leaving on the table every year, every month, every day?" "How much will you lose over the course of your career?" How do you change the situation quickly?


Every business is challenged by cash flow and profitability at one time or another. There is no shame in that. Business owners with a financial background face such issues head-on. Clinical practice owners tend to avoid such discussions and such honesty and candor. Remember, the first responsibility of a leader is to define reality. "What is your reality?" "Are you working harder?" "Are you worrying more?" "Do you have a plan to change your reality? Do you need help?


Its all about right sizing your business based on reality and opportunity... based on revenue and expense. Your reality is not fixed. It can begin to change overnight with the simple power of a decision! What is your decision... status-quo or greater prosperity? That is your first decision...


Let me know if I can be of help...


Bob


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Performance Builders