How to Get Effortless Control Over Your Income Streams
By Noel Lloyd, DC
Dr. Mike wanted to increase his income by increasing patient services, so he added massage therapy, a popular weight-loss program and a chiropractic associate. With insurance reimbursements down, he thought more services would be a great way to boost collections. Plus, the fact that he wouldn't have to personally provide the service was appealing.
Then Mike had another idea: He'd open the office Friday afternoon and Saturday morning. The clinic will finally make money without me actually being there, he thought.
The net result? Mike doubled his stress and took home $51,000 less than the year before. Wait a minute: Mike added services he billed for, increased the service time – and lost take-home dollars?" Yep, Mike lost a big chunk of his profit and ended up working a lot harder. Not what the doctor ordered.
By the way, Mike's not alone; every month I speak to smart, successful docs who've added services and personnel, only to lose money. The good news is, it doesn't have to be that way. Add services the right way and patients will love it, your staff will do the hands-on work and you'll profit handsomely.
So, where did Mike go wrong? I've been guiding people through this process for more than 28 years and when it crashes, it's usually because of the same set of mistakes. Let's take a look at each misstep and give Dr. Mike some solutions.
Not treating each additional service as a separate business that needs to produce a profit. Here's how even smart docs like Mike get fooled. He was already making good money and thought adding extra services would be easy. They'd just "catch on." In my experience, the term catch on is code for I've got no plan. And no plan is a plan to fail.
Solution#1: Add just one carefully launched service at a time, and only after drawing up what I call a street-smart business plan. This real-life strategy sheet needs to clearly outline how you're going to build the business and earn a profit as soon as possible. Remember to calculate all costs – especially labor.
Another critical page in this plan is the marketing. You need solid answers to the two most important questions in any practice: 1) How do we get new patients or clients? 2) Who's going to get them?
Not having one primary person to implement the business plan for each service. The last thing Mike needed was a bunch of extra projects on top of his current jobs as staff trainer, staff manager, marketing manager, office bookkeeper and full-time chiropractor. There was no way he could keep on top of everything – especially new services.
In retrospect, Mike's de facto management strategy was his version of the all-too-common, "Throw it against the wall and see if it sticks." Things were not sticking.
Solution #2: Each area of service needs one person to lead the project. We'll call them the project lead. The project lead needs to understand Mike's vision and plan for how the service will be delivered. They also know they're accountable for how the plan is working. For Mike, his project leads would be his massage therapist, the young woman who works in weight loss and his associate.
Not having accurate and up-to-the-minute stats. Mike was flying blind with all of his new services by not receiving concrete data or statistics to tell him how each service was producing. Mike thought things "looked busier." However, the only real information he saw was weeks after the fact when he pulled his P&L, only to see he'd taken home less money for yet another month.
Solution #3: Every project lead reports every day and in three very important ways: first report, a daily live 60-second check-in and check-out. For example, the project lead finds Mike first thing in the morning and fills him in on what part of the business plan and marketing they are working on that day. At the end of the day, the project lead checks out by reporting what they got accomplished. Both the in and out take approximately two minutes total.
Second report: Again, the project lead either hands, emails or texts the day's stats to Mike. Third report: The project lead brings their weekly stats to the office meeting, where they report to the whole team on how their services are progressing.
With these three reports, Mike would have known what's being done and how it affects his bank account. He could have made corrections or changes to his plan based on solid information.
Doing Things Right:
A Real-Life Example
Dr. Phil (no, not that one) has multiple services or "businesses," as we call them – both inside and outside his office. Here's what the good doctor gets every day from all his businesses:
His in-office personnel catch him for a short (60-second) check-in as the day begins. That means his two associates, one massage therapist and the CA who runs the weight-loss program. A project lead from an outside business had already called him on his mobile on his way into the office with her check-in.
As Dr. Phil says, "It's great! In the first 10-15 minutes of my day, I know what the project lead is thinking and what they believe needs to be done."
At the end of the day, project leads are responsible for tracking Dr. Phil down for a check-out that takes less than a minute each. He squares this information in his mind with what they promised that morning and all is good; or he asks questions as he looks over his stats on their Post-It notes. Net result? Phil's in the loop in the best possible way, the businesses are well-run and he's making money.
Next, at the religiously consistent weekly office meeting, Dr. Phil listens to each project lead report their stats, wins and near-term goals to the team. He truly is in control of every phase of the practice and each income stream.
Oh, I almost forgot: Do you remember Mike's decision to extend his hours? Typically it's a huge mistake. The clinic didn't see any more patients. They just spread them over more hours that had to be covered by support staff, which drove up his labor costs. He should have waited until the associate's practice required more room or clinic hours.
Now for a quick review if you want to add new services and not lose money:
Dr. Noel Lloyd graduated from Palmer College of Chiropractic in 1971 and became the youngest practicing chiropractor in Washington. He is the founder and head coach of Five Star Management, a professional training, coaching and consulting service based in Seattle, Wash.