Make 2016 the year to nail your medical practice budget once and for all. Having a strategy for this year’s expenses and income is an important part of operating a medical practice. Here’s how it will help you.
Steps to Prepare a Medical Practice Budget
Look at last year’s income and expenses to help predict this year. Some of the areas that you should review are listed below. While expenses and income change annually, you can establish many of your line items for your strategy by looking back.
- Number of patients and procedures
- Administrative expenses (employees, utilities, training, etc.)
- Equipment replacements and upgrades
Now, that you have the line items, assess the effectiveness of each one. For example, are your vendors working well and competitively priced? Here are some issues to consider:
- Marketing – Are some of the tactics working where others aren’t? Revamp your strategy so that your marketing dollars are well spent.
- Vendors – If your contract expires annually, budget season is the time to check price points and effectiveness. Renegotiate pricing and/or solicit additional bids for external services.
- Technology – The digital world evolves quickly, i.e., a mobile website is mandatory in today’s world. Cosmetic procedures (especially non-invasive ones) evolve. If you fail to keep up, you’ll quickly lag behind your competition. Identify areas to include in your budget.
A budget isn’t once and done. Unforeseen situations occur along the way. You don’t toss the budget out when something is out of line. You review and adjust to stay the course. Review your budget:
- On a quarterly basis to ensure that your budget is on target.
- When unforeseen situations occur. For example, if you aren’t getting new patients through your door, you may need to change your outreach tactics. Or, perhaps Google announces a technology change that makes a website update mandatory. Review and adjust when you’re thrown a curve ball.
- If you want to expand or decrease services for your medical practice. All decisions affect your budget, so don’t forget to assess how each decision will affect the budget you have in place. This could prevent you from ending the year in “red”.
Stay the Course to Nail Your Medical Practice Budget
Many doctors we meet say they don’t budget at all. Others say they budget, but they fail to adhere to their plan. It’s not surprising when we hear that these doctors are falling short of their goals. You need a roadmap, and that’s just what a budget is — a roadmap to help you accomplish your practice goals.
It’s time-consuming to prepare your first budget. However, it’s much easier to tweak in the following years. Need a little help? Check out our budgeting checklist webinar or give us a call to discuss your budgeting strategy. Nail your 2016 medical practice budget.