Are you penny wise pound foolish…

penny-wiseI speak from experience when it comes to being penny wise and pound foolish. When I bought my first Physiotherapy clinic I did not have a big budget for anything, any money I received from my clients generally went on wages or rent. However, now that I’m opening my second clinic, I can see the value of investment in the right areas if you have the cash to invest.

My previous staff will laugh when they read this, but I had a shredder in the practice I bought for $50 that would shred 5 pages at a time. The problem was every 3-4 weeks (or days) the shredder would get jammed up or overheat and I would have to spend an hour fixing it or making ridiculous videos on how to use a shredder (yes I did that!). It took me 2 broken shredders and too much advice from my admin team (Thanks Jen) to get a business shredder worth about $150 which saved me a fortune in time and I never had to worry about jamming paper again. So if I add up all the time I spend on the broken shredders it works out at about $160/hour (clients I could have billed) and at a conservative estimate of 10 hours that works out at $1600, plus another 2 new shredders at $50 per shredder. That’s a grand total of $1700 – a weeks wages for top class MSK Physiotherapist!!

You see this a lot of this waste in the public sector health or politics, rather than investing in a 5-10 year plan they are working towards the next 12-18 months. Being in private practice you can control everything within your business and what your budget (however small) gets invested in. Don’t get me wrong you do need to watch your pennies in business but take a step back occasionally to see what the real cost is. I thought I was saving $100 by purchasing a basic shredder, when in fact I was losing $1700!! It is good to be consumer savvy but just watch out that you’re taking from Peter to pay Paul.  Here are some simple tips to watch out for being as stupid as I once was…

  • Outsource – What’s your hourly billing rate? If the task costs less than your time to bill a client then outsource – see more detail here
  • Listen to the feedback – The advice was I was getting was falling on deaf ears. Listen to your family, staff and clients their feedback is invaluable (you don’t have to take it on board but it’s always good to get an outside opinion)
  • Ask for advice – Ask someone who’s done it before , when I got a business coach on board I changed about 30% of my processes and my business grew as a result.
  • Cheaper rarely means better – If you have to buy the same thing (shredder, printer, ink cartridges, phone, laptops)  3 times in one year, then clearly your need to invest in decent equipment.  Buy well, buy once!

So take a step back and look at what you’ve purchased in the last month. Get rid of the crap and you’ll have more time with your family and it will help your business grow. To find out how PracticeNav can help you invest wisely in your business take our Online Audit which gives you instant results. This can help build consistency within your business procedures. Contact PracticeNav via email on info@practicenav.com or take our Free business audit to find how we can help.

Colin Phillips
Business Consultant
PracticeNav

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