No matter how much money your practice is making, it pays to have a sound financial strategy. Either to maximize revenue or to minimize waste, your plan has to factor in many aspects of your business.
You’ll be dealing with debt in your business, which is not a problem. But, you need to have a plan on how to deal with your debt so it never does become a problem.
Other decisions like where to allocate your capital for things like a 401k and other investments and how to budget need to be planned out strategically.
Read on for all the helpful tips you need to get your financial plan together.
1 Financial records
Start out by having your financial records in order. Having accurate records is the only way to be able to get a true picture of the health of your finances. When your records are disorganized, you won’t be able to make a plan.
Come up with a system that puts all of your information in an easy to read format. Include where your expenses are focused and where you owe money. Late payments can eat away at your revenue very quickly and needn’t happen at all.
Tracking these things will allow you to understand when or if you ever need to borrow money to grow your business. And you’ll be able to see if people are paying on time and how to ensure that more people do pay.
It may be worth it to have a professional go through your records and organize them for you.
2 Keep your personal and business finances separate
A common problem for small medical practices is that often there is no line separating personal and business.
Your business and your personal finances need to be separate as they both depend on different things. It doesn’t matter if you are a one man band that handles just about every aspect of your business.
You can’t get an accurate picture of how your practice is performing and where you can improve without your personal records muddying the waters.
3 Write a business plan
Often overlooked by small practices is having a solid business plan. A business plan will allow you to make a step by step guide that you can follow to grow your business and keep your finances in good order.
Good decisions can be made when you have a document that allows you to see what your strategy is and where your business is on the road map. Where to direct resources will be determined by your business plan.
When to market your practice, when to borrow money and for what and when to hire are decisions made clearer when you have a good business plan.
Keeping tabs on your money is essential to running a good practice. Financial health means you will have the resources to treat your patients in the best way possible. It is a win win for both you and your patients.