It is important to evaluate whether you want to consolidate your medical practice’s position or find ways to grow. If you decide that your priority is growth then you need to plan carefully if you are to succeed.
Growth has its risks, but the right strategy can deliver stability, security, and long-term profits. Once you’ve assessed the current strengths, weaknesses, opportunities, and threats to your practice and how well it’s equipped to handle them, you can move on to the next stage — building a strategy for growth.
Your medical practice’s focus changes as it moves beyond the start-up phase. Identifying opportunities for growth becomes a priority to ensure the practice’s sustainability. You can measure growth by looking at key statistics such as your revenue, profits, patient volume, market share, etc.
However, determining which measure delivers the most accurate picture of your practice’s performance can depend on both your specialty and what stage the practice has reached. In general, a combination of top line revenue and bottom line profit is the most balanced way to measure growth.
Even if you are happy with your current performance, it is important to keep looking for ways to develop. If you don’t, you risk allowing your competitors the room to grow and take market share from you, which could seriously weaken your position. Going for growth may, therefore, begin with a consolidation of your current markets.
To devise a successful growth strategy, you need to know exactly what shape your medical practice is in. This will help you to ensure your practice is properly structured to make the growth strategy you choose a viable option.
While you may be spending more time and resources on developing the practice, you need to be sure that the core of the business is still performing well. It is vital not to neglect your existing patient base as this will underpin your growth and provide the cash flow you will need during this phase.
Timing is critical to the success of any growth strategy.
Answers to the following key questions will help you judge if the time is right:
You may have to consider including additional staffing, refining clinical processes and equipment, or outsourcing certain tasks in order to give you the flexibility to pursue a growth strategy.
If you’re looking to increase market share, it’s important to make sure your business is in good shape first. To increase market share, a medical practice has to take patients from its competitors or attract new patients. Achieving this requires a thorough understanding of both your own patient base and that of rival practices and hospitals.
Having the answers to the following questions will help you build a comprehensive picture of your market and your competitors and put you in a stronger position to win a bigger market share.
Many small medical practices grow by taking opportunities to diversify, although there are risks because of limited resources on all fronts. Practices should weigh the risks and costs of opting for growth carefully against the benefits.
Diversification can take several forms, including:
Deciding how and when to diversify depends on you having:
Generally speaking, diversifying with similar services and selling them to a familiar patient demographic is less risky than creating a service for a completely new patient demographic.
You can also expand your medical practice by joining forces with another physician group. While this can create more shared decision-making and possible management and staff issues to resolve, there can be clear advantages.
Successful co-operation can deliver:
It is important to be very careful who you link up with. An agreement defining the terms of the partnership or joint venture is essential and further legal protection is advisable.