Being a doctor or health practitioner can be an incredibly rewarding profession. And graduating to running your own medical practice can
take your sense of satisfaction to a whole level. It allows you more control over how and with whom you work and enables you to establish
your name as a specialist in your chosen niche. It also means you are no longer just a GP, but a business owner too, and you need to be able
to balance the two roles in a constructive manner. There’s no doubt it can be tricky juggling the roles of GP and boss, so we’ve defined
some guidelines to help you navigate the day-to-day challenges you’re likely to face and achieve your goals for your medical practice.
Track every aspect of your practice spend
While tallying up your revenue and expenses will give a “big picture” overview of how your practice is performing, it is not enough. To gain
meaningful insight and stand a chance of finetuning your business, you need to break each income stream down into its component elements.
For example, if you’re offering patients a physical therapy service in addition to your GP service, you should track the costs involved in
each service separately. The more detailed your breakdown, the better you’ll be able to understand what’s working and what’s not.
Understand how many patients you need
Once you’ve compiled an in-depth breakdown of your practice costs, including staffing, equipment, supplies, and overheads like rental or
mortgage repayments for your operating space and utilities, you can backtrack to calculate the number of patients you need weekly, monthly,
and annually. A properly structured practice budget can help you identify where and why you are underperforming before it is too late to
Understand the difference between your primary and sidelines
Healthcare and medical practices differ from most business models in that, by their very nature, the services you’re providing wouldn’t
likely be described as popular. Ideally, you need to work out – based on market research – which services qualify as your “run rate”
business line. In other words, the business line that will bring the most significant volume of people through the door with minimal costs
involved. Such an approach will give you the scope to offer certain sideline services which don’t necessarily bring a large profit margin
but still add value by virtue of strengthening your reputation, particularly if you’re the only practice offering said service in your
Understand your staff, resources, and cash flow
Your team – from the receptionist to the nurses, practice manager, and fellow practitioners – are the backbone of your practice. To remain strong and function at their best, they need time off, just like any other employees. However, being a people-centric business by nature, your practice stands to lose out on billable hours if too many staff take leave simultaneously. To avoid this potentially adverse outcome, focus on creating a smart roster that allows staff to take the off-time they need to rest without impacting too severely on your business.
Equipment & supplies
Also, take the time to review your equipment and supplies ordering regimens to uncover any inefficiencies. A clear view into purchases allows you to see if you are holding too much inventory, which essentially presents a considerable upfront expense for you. Take it further by reviewing your supplier contracts and negotiating revised terms and conditions if need be.
As the boss, the onus is on you to keep practice spend down to reduce patient costs and preserve your staff’s job security. You should be
regularly conducting a line-by-line check of your expenses to ensure a healthy and steady cash flow.
Integrate your budget into your daily practice
The concept “out of sight, out of mind” is particularly pertinent to the realm of finances. Unfortunately, it is all too often what happens
to that carefully crafted budget. But a budget is only as good as its application which is why it should be integrated into your daily
practice management. Your budget should be actively used to guide your purchasing, marketing and recruitment decisions whilst maintaining a
realistic picture of what is happening in your business. This means you’ll be in the position to intervene whenever you identify items that
are over or under your predicted spend.
Putting in the effort to keep your medical practice in great shape means less stress for you, your partners, staff, and patients. SMART Business Solutions can assist in diagnosing the problems that are causing your practice to consistently underperform and develop a financial plan that will set you up for success. Contact us today on 03 5911 7000 to request an appointment.
In the 2019–20 Budget, the government announced that Single Touch Payroll (STP) would be expanded to include additional information.
Throughout March, the ATO sent letters to directors who are potentially in breach of their obligations to ensure that the company they represent has met its PAYG withholding, superannuation guarantee charge, or GST obligations.
It’s a great headline isn’t it? Spend $100 and get a $120 tax deduction. Days after the Federal Budget announcement that businesses will be able to claim a 120% deduction for expenditure on training and technology costs, we started receiving marketing emails encouraging us to spend now to access the deduction.