In my own personal business, I regularly trim fat to make sure that my business maintains a decent margin. I am able to compete with anybody, and yet still maintain a good margin. The problem with many small business is they try to accommodate everybody by offering services that initially seem to be profitable - but in the end cost too much time and effort.
Some of the most profitable businesses I have looked at would probably not open anyones eyes until they saw the bottom line.
If we use Dentistry as an example - what would you rather own - a $2.5 Million gross clinic with 80% overhead netting $500,000 pre tax or a $1.2M clinic with 60% overhead netting $400K?
$100K is a lot of money. I get it. The issue is - is it really worth it?
Running a larger business comes with consequences and higher risks. It can be more difficult to trim expenses when necessary during slow times. There is a higher likely hood of having staffing issues of all types. There is a much larger personal commitment, or another expense of hiring a qualified person to manage which further cuts into profits.
Eventually you may feel you are running a business for everyone but yourself.
For your shareholders? For your staff? For your customers/patients?
What if you only ran a business that catered to your needs? What if you only performed the services you wanted to perform and cut out all the stress? What if you worked the days you wanted and didn't worry about taking off a few extra because you didn't have to worry about employees?
How to be small and profitable.
Find the services/products that you really enjoy. Become the expert on this and really focus on this product or service. If your customers are looking for another product or service that you don't offer, you can consider adding it to your business - but it must compliment what you are already doing.
Do not sacrifice profitable services to add less profitable services
Do not sacrifice your current customers needs to accommodate new customers.
Get rid of customers that force you to cut your quality of services. They aren't doing you or themselves any favors.
Do continue to find efficiencies in the services or products you already do so well. Compliment your current product lines with profitable add ons....
As a dentist offering hygiene - offer products that you recommend in the clinic. The patient is going to buy this stuff anyways, why can't you retail this? Profitable add ons could be Power Brushes, Remin solutions, Breath solutions, oral health products. take home bleach, paint on bleach, perhaps sugar free mints, health food products for dentistry?
If you offer all ceramic restorations - you should really consider a cad.cam. When used with a high skill level this product can really offer a great return on your money....a great franchise within your practice that can enhance something you already do.
Find efficiencies in what you do everyday....
-Products that are proven and take less time such as self etch bonds, cements
-High speed curing lights like LED
-Fast curing materials
-Bulk fill materials such as Surefil SDR or Equia for posterior restorations
-Digital xray
-Automate your sterilization for faster turnarounds
-Rotary endodontic procedures
-Learn how to schedule effectively
-Use Demandforce to automate the recall system
-Use a practice management software and learn how to read reports on becoming more efficient.
In a small business - find your niche products and sell a ton. If you sell bread - you don't need to make 100 varieties if everyone really just wants your sourdough (my wife is a baker in high demand) When you have a product/service that is unique and in demand - keep the product valuable by making sure nobody can duplicate the product/service levels you offer. It will be more profitable than trying to accommodate a large volume of a variety of services and products.
This makes sense doesn't it?
Isn't this why the auto industry is now in trouble? They tried to make every kind of vehicle they possibly could. They worried about their competition instead of just being the best at what they already did well. Instead of improving their current product, they tried to add more product and became less profitable to the point of being finished.
Every business could do better by focusing on what they do well and not worry about what the other guy is doing.
Just my thought today,
Smile and live your life!
Warren Bobinski
Success in Dentistry, Life and in your profitable little business doing it the way you want to.