When presented with ideas to update your medical practice’s technology, better support your clinicians, or market your practice in a new way, is your go-to reaction “we don’t need that” or “we’re doing fine without it”? Is your financial management approach simply to always minimize expenses? (Perhaps because you remember the old maxim of taking care of the pennies and the dollars will take care of themselves – or, its more modern cousin, “the latte factor”?)
If you’re thinking about business spending in the same frugal way personal finance experts recommend you run your household, you may be missing out on opportunities to grow and increase your profits. Keep it up long enough and you may jeopardize your practice’s future profitability.
The good advice to skip a few lattes and pocket the money simply doesn’t correspond to many business expenses. While a latte is a fleeting pleasure, upgrading practice technology is an investment that can increase productivity for months or years to come. Similarly, keeping headcount at the number needed to “get by” may mean your physicians, NPs, and PAs will be less productive – an opportunity cost that quickly outpaces the “savings” from bare-bones staffing.
Just because a business investment requires a decision doesn’t mean it is analogous to that forgone latte that puts money in the bank. Not pursuing an investment may actually cost more in terms of lost revenue and profit. Over time, under-investing in productivity tools, visibility for your practice, and modern, convenient patient service can make it harder to attract patients and retain staff. Rebuilding from that sort of decline can end up being much more difficult and costly than investing in keeping your practice up-to-date and well-staffed would have been. Before rejecting investments in your practice’s infrastructure, marketing, and staffing out of habit, be sure you’ve considered whether the upside you’ll pass up is greater than the savings.