“That which is measured improves. That which is measured and reported improves exponentially,” said Karl Pearson, an English mathematician and biostatistician.
It seems article after article talks about measuring everything we do in our offices.
We measure and track a lot of performance metrics: capture rate, boxes of contact lenses, revenue per staff hour, revenue per doctor hour, number and percentage of new and existing patient appointments, and so on.
Today let’s talk about the Golden Metric—profitability. This metric is what I affectionately call MIB (Money in the Bank).
Although I am a proponent of measuring and tracking office performance with other measures, they are all focused on top-line improvement or money inflow. This is great, but an increase inflow does not necessarily translate to more MIB.
To increase profitability, you need to create a budget.
Creating a budget will keep you on track with your overall practice strategy and keep you from getting “spend creep” that reduces your profitability. It will also allow you to make decisions based on facts of your practice performance rather than emotion. I have used the “It is not in my budget this year” line more than once with vendors.
For some, doing a budget and planning is very natural; for others, it seems like a daunting task.
Here are 5 steps for creating a budget and increasing your profits in 2017.