4 Ways to Save More Money in 2020
As the year comes to an end, it’s time to set your sights on what’s possible in 2020. The core goal of our consultancy is to help “motivated people reach their capacity.” Often, this is focused on helping the practice and leadership earn more money, have a better work-life balance, reduce the headache of staff turnover, open additional locations or add associates, improve booking ratios, improve lead counts through smart marketing, or all of the above. Every year, however, it’s fun to talk about shrinking, instead of growing, as $1,000 saved is $1,000 earned. So here we present four money-saving tips, as our gift to you this holiday season:
1) Retain Your Staff
The hefty cost of employee turnover is difficult to measure, though losing a top PCC, manager or clinic staff member will show up in your sales report within 90 days, typically to the tune of tens to hundreds of thousands in lost upside. Couple this with the fact that the unemployment rate is the lowest it’s been in 50 years is reason enough to retain good employees. Employees change jobs in a competitive environment for many reasons. Most commonly, according to Inc. Magazine in conjunction with a recent 5,000 person Korn Ferry study, those fleeing the friendly confines of your business include boredom, poor culture, and fear of job loss ahead of better pay (though pay does come in fourth). So what are you doing to stay competitive in this current landscape? Here are some simple recommendations:
- Register for on-going staff training to engage your employees. Think beyond routine product and technology training provided by your reps. Invest in dynamic sales, customer service, and management training that invigorates your team, sparks new ideas, and provides the tools needed for career growth. If you have not spent 5%-10% of their annual income reinvesting in their growth, expect boredom and culture issues to manifest, and turnover to follow.
- Review your employee handbook and policies. Do you still give 5 days of vacation total, and only after your employee survives a full year? Draconian vacation policy causes turnover and ensures top talent stays away. Talk to your attorney and update your employee handbook for legal protection, but also to update vacation policy for retention. We recommend two weeks off per year in year one. By year 3 and beyond that should rise by 1-2 weeks to truly retain top people, plus you’ll sleep well at night knowing you treat your team marvelously.
- Motivate employees to achieve their goals (and in turn grow your practice) by switching to a monthly or quarterly bonus pay structure vs. annual pay increases. We know – you have that one employee that suggests she is a “hard working no matter what and will do the same work with a high base and no upside.” Try seeing if she stays later and works harder with better results if you give her a million dollar bonus for hitting a higher goal☺. Get the point? Incentive works, and matters, so don’t believe that one book (It’s called Drive) because it’s simply not true in our industry. Unsure where to start? Ask us how we structure staff salaries in our most successful YellowTelescope Long-Term Consulting practices.
2) Reduce Medical Supply Costs
Completing an annual vendor review and negotiating pricing for all of your supplies – from sutures to gloves – can save your practice thousands over the next year. But let’s face it, the price-shopping process is beyond time consuming for your staff. This is why we set out to find a medical supply company that provides our clients with the best possible prices, in addition to perks like overnight shipping, an easy one-stop-shop online portal, and excellent customer service. After vetting multiple vendors, we found one that outperformed the rest. It just may be the right solution for your practice – learn more here.
3) Decrease Cost Centers While Investing in Profit Centers
One of the most common mistakes we’ve observed among practices is cutting off things that actually make you money (profit centers) and turning on things that don’t make you money (cost centers). Save thousands in 2020 by learning the impact of your cost and profit centers.
Here are a couple of examples:
- Turning off certain marketing spend because it “feels” like too much of an expense. Before you make this decision, first understand exactly how your marketing dollars are being spent and the results of your efforts. For instance, you may notice a $3,000 payment on your credit card bill to your web company for pay-per-click (PPC) advertising and feel your web company is being overpaid. Yet in reality, only $500 is for your web company to manage the campaign while the other $2,500 is allocated to Google to run the ads. Also have a clear understanding of how your PPC ads are performing in order to make proper adjustments to your marketing spend. If your campaign generates 10 breast augmentation leads in a month and just 1 of them schedules surgery, you’ve already made your money back and then some. Further, observe and listen to each step in your marketing funnel. If a certain ad campaign doesn’t seem to be working, yet it is generating inquiries that are not buying, listen to your receptionist when she is not looking and conduct mystery calls to ensure the calls are being transferred properly to the PCC(s), sit and listen to your sales staff to ensure they are following a superb protocol, and double check that all task follow-ups for older leads are actually being completed. If any of this doesn’t happen or doesn’t make sense to you, call us immediately as you are likely losing six or seven figures a year. In one example, one of our clients received 38 leads from PPC last month only to find out their new receptionist transferred exactly zero of the calls to the sales staff. Had the office turned off the PPC permanently it would have been a hundred thousand dollar mistake, when the solution was to get a new receptionist.
- Letting your credit card statement guide your decisions instead of your P&L. We get why this happens. Your credit card statement is simple and easy to scan, arriving to your inbox consistently every month. Reviewing your P&L on the other hand is a complex and daunting task but within it lies your real cost centers – medical supply costs, operating room costs, bookkeeping and accounting fees, legal fees, insurance costs, processing companies, etc. Take the time to review your P&L, or hire a consultant to do so before making financial decisions in 2020. Renegotiating with insurance carriers, finding a more cost effective bookkeeper and accounting firm, discussing new tax laws and legal ways to shelter hard earned money, finding better pricing for credit card processing fees, turning off useless small tech charges that add up over the years, and more are easy wins so take advantage. Again, be careful about cutting profitable services and remember sometimes what “seems” like a loser is actually making you gains. Here at YellowTelescope, we just found out our insurance for our team was about to rise by 26% in a single year! We took our time, found a group that could administer all of our HR and insurance needs, saved thousands, and now provide better levels of care plus a new 401k plan we never offered before and it only took a few hours of time from our fabulous VP of Operations. Most of your cost centers are hidden in the P&L, so take a dive deep this holiday season.
4) Outsource – The End of the Days of Insourcing
Most smart business owners try to bring everything in-house, as we are taught over a lifetime that insourcing is cheaper. While true for some business needs, each year as technology improves, the cost of delivering the same or better product or service decreases. If you are currently creating and sending your own email blasts or print marketing in your office, you are likely both losing money after you track staff time and other costs, and are delivering an inferior product that will sell less over time. As your team and you are not marketing experts, truly superb marketing managers are very costly if full time, and most offices have team members taking too much time putting together marketing materials or simply don’t get the marketing completed regularly, we see most practices losing thousands to save hundreds. Instead, work with your web team, or contact us here at YellowTelescope (our sister company, iScreamSocialMedia creates great marketing materials) to figure out how to keep budgets reasonable and outsource more of your marketing needs. From the cost of buying fancy programs and apps and editing tools and beyond, to the lack of impressive results local offices typically create for social media, email marketing, and similar printed materials, the net savings to most practices can be appreciable.
Have a few minutes to spare over the next few weeks, perhaps while relaxing or traveling for the holidays? Get in touch with us – we provide complimentary 1 hour strategy sessions where we can review the state of your practice, make recommendations to save (even if you don’t hire us or work with our brands), plus help set your trajectory on the profitable path for 2020. Set aside time to make your resolution for the new year or click here or call us at (305) 455-0720 to schedule a call asap.
From all of us at YellowTelescope, happy holidays and best wishes for a prosperous new year!