Renee Matlock, the owner of The Private Practice Coach, shares with clients her wealth of experience, gained over 30 years of building a profitable, multi-disciplinary private practice.
BLOG: The Secret to Survival in Uncertain Times
The Secret to Survival in Uncertain Times
In a typical year, I would be advising my clients to do a Mid Year Review in the next few weeks. What does that look like? It is a review of 4 key elements in any business; financials, marketing activities, systems, and key relationships. While a review of these elements is still essential, the current pandemic and resulting economic impact will put many small businesses at risk, and require greater scrutiny.
So, how do small businesses brace themselves for an economic downturn? The key to survival is cash flow, which means a decrease in outflow (expenses) and the need to speed up inflow (billing and collection).
First, let's look at ways to reduce expenses.
- One of the largest expenses is typically your rent, or mortgage on your space. Contact your landlord to see if your monthly rent can be negotiated - perhaps a guarantee of renewal at a lower monthly cost. If you own your space, many lenders are offering mortgage forbearance for small businesses struggling to make their payments. However, if you choose this option, make sure you understand exactly what the forbearance will entail so you don't have a nasty surprise at the end of the term.
- Make a list of the vendors you pay (internet, phone, insurance, etc.) Shop competitor rates, then call your carriers to negotiate your rates. Many will meet or beat a competitors offer in order to keep you as a customer.
- Take a hard look at your discretionary spending. Do you need to renew newspaper/magazine subscriptions? Do you have a Starbuck's (or in my case, Dunkin) habit? What can you do without in the short run to conserve cash?
- Put capital improvements on hold. Now is not the time to be making big purchases, having your offices painted, etc. Be conservative with your spending now, so you can still be open later.
Next you need to increase and speed up the flow of cash into your business.
- Accounts Receivable - Since you are using teletherapy to keep your business open during quarantine, clients aren't bringing checks to you. Consider asking your clients to keep a credit card on file in your office that you can charge after each weekly session. This will keep a steady flow of money coming into your practice, and you won't have to carry balances that get difficult to collect. Make sure you are completing your third party billing on a timely basis.
- Marketing - This is often one of the first expenses to get cut when money gets tight. This is actually the time that you need marketing the most. Stay ahead of your competition, and let people know that you are still open and offering superior customer service.
- Revenue Streams - is there another avenue of revenue you can tap into without at outlay of cash to get started? Are there other services you could be offering to expand your customer base?
Take a step back, review where your business is, and make a plan to weather the storm. Be purposeful and proactive!
If you'd like to set up a complimentary, no strings attached, "Talk With Renee" call, click here to schedule and find out if we are a right fit to work together. I'd be honored to help you identify your options for this "new world" you're finding yourself in.
