The ultimate goal of your business should be positive cash flow. If you are not making money, then what is the point of your business? Since we are nurse practitioners, our job is to help individuals and this should be a goal of yours but you must make a living unless you do this for charity.
Therefore, how can we obtain positive cash flow in a practice and/or small business? You must have a profitable business model and keep your expenses low. It is as simple as that. Do not complicate it like the bullshit business nursing classes did that we all had to take in school.
Profitable business models: Cash is king. Cash practices can generate enormous returns with less work following the insurance model. Insurance is a lot of overhead, regulations, rules and unnecessary work. You must figure out a niche practice model that generates cash. We all have a special ability and that is to prescribe medication. Use this privilege. You are already light years ahead of the general population who wants to start a small business. Anyone can open a restaurant. Few can prescribe.
Our medical system makes it a requirement for individuals seeking medications to get a prescription for it. This business model would not work well in Mexico for example because you can go down to any drug store and buy whatever you want. How many nurse practitioners out there rely on simple medication refills to generate visits in their day jobs? Most of us. Men need erectile dysfunction medications. Women need birth control. People need refills on their antidepressants. People need to be told what to take for simple ailments like muscle strains and colds. There is a plethora of medications out there that are relatively safe and require little monitoring.
You must find that niche that people are willing to spend money on and skip using their insurance. Keep the cost equivalent to insurance co-pays or maybe just a little bit higher to lure patients/customers in. Do not charge ridiculous prices or this will fail. I advocate small part time cash flowing side practices. Remember: CHEAP AND RELATIVELY EASY. Primary care is neither of those.
Low expenses: Keep your expenses LOW. You do not need as much as you think to start a small side practice. I have discussed low expenses here. Every expense you have cuts away your profit. Think twice before you purchase anything for your business. You will be bombarded with salesman trying to sell you marketing schemes, phone lines, business equipment, etc… Do not fall for these services. It is often times cheaper and easier to do a lot of this yourself. I answer the phone for 2 of my practices. Every call is forwarded to my cell phone through second phone line applications. A receptionist would be a huge expense for me and they would often times be doing NOTHING. Do not pay people to do nothing. That is your hard-earned MONEY being given to someone else for doing NOTHING. Screw that.
Keep expenses low and cash flow high. It sounds difficult but once you master this practice the skies the limit.
Every business experiences certain milestones. These are times when a certain goal is achieved or your business becomes successful in an upward stepwise fashion. Often times these happen unexpectedly, especially if it is your first business. When they do though, it is usually a very joyous time for the entrepreneur and it can become addicting. Why do you think I have so many side businesses?
Your first patient. Ohhhh yeah baby. Your first patient. Very exciting! Sometimes this happens on day one, other times it can take a week or two. So do not get discouraged. Give it at least 2 weeks. If after 2 weeks you have yet to see a patient, you need to reevaluate your marketing strategies and business model. If you are only seeing 2-3 patients monthly for the first 2-3 months, again, reevaluate your marketing strategies and service line.
You can expect your patient base to grow exponentially. It is called the snowball effect. 5 one month, 10 the next, 20 the next, and so forth and so forth. This generally takes 6 months to become significant. You will know for sure in 6 months if your business model will work or not. Give it at least 6 months before calling it quits! Some successful entrepreneurs say at least 18 months. This solely depends on your finances but with medical practices, I believe 6 months is a fair number. Stop wasting your time and move onto the next project.
It will take around 3 months for your practice to be on autopilot. This means the cash flow coming in covers your expenses. No more use of personal money! If you keep the expenses low, it does not take much time. If you have a $3000 monthly rent and 3 employees, this could take you a year or more. Maybe never. That is why a lot of businesses close. Furthermore, this is a HUGE milestone for your business. Once your practice is on autopilot there is a weight that is lifted off your shoulders. The feeling is better than sex, no joke. When this happens, you can now focus on growing that business instead of worrying about how your rent is going to be paid.
It will take about 6-12 months to start seeing real money. Your revenue will begin to increase month by month. $5,000… $7,000…. $10,000… $20,000! Holy smokes! That is an amazing site to behold. Your bank account will start getting larger and larger. Before you know it, you have $30,000 after expenses sitting in your business account that needs to be spent or your tax bill will be high. A very QUALITY problem to have. Strive for this. It is how businesses grow and is the driving force of our country’s capitalism.
When the business has matured successfully at the 12-16 month mark it hits a fork in the road. This is the time when the owner, hopefully you, has to either decide on staying stagnant and enjoy the fruits of your labor or decide to grow the business. I advocate using your profits and starting another side business. This protects against uncertainty and keeps things fresh. BUT, if it is very successful and you can see the growth, then go for growing it. A lot of times a part time business hits a ceiling unless the owner decides to dive in full time. This is up to you and it will be one of the hardest decisions you will ever make. It will require sacrifice and much more risk to go full time than to just start another side business.
Don’t confuse yourself with a bunch of business mumbo jumbo. Focus on CASH FLOW and keeping your EXPENSES LOW. Do these two things and watch the milestones unfold before your eyes. It is a very rewarding experience to see what you created from scratch mature into a successful thriving business! Now go get started, the money is out there…