The real estate market has lost an average of 22% in 2008.  The stock markets were down 46% from their high.  It leaves you wondering, where should we put our money?

3 years ago I consulted with a coach from the Small Business Development Center, who helped me discover my I.R.R.  I.R.R. stands for Internal Rate of Return.  This set me on a very powerful journey that has surely proven true in this economic downturn.  Let me explain.

I.R.R is the return on your money that you put BACK into your business.  So instead of buying shares of xyz stock you go ahead and invest in your own business.  We will work on an EXPONENTIAL gain of your investment.  I know that will beat anything else you see in 2009.

There is only ONE way to grow ANY business.  It all comes down to this equation, which I have talked about previously.  Your business is always a product of the number of new clients, multiplied the number of times they do business with you, multiplied by the money they spend each time.  To put it Chiropractic Terms:

Your Money = New Patients(NP) X Patient Visit Average(PVA) X Office Visit Average(OVA)

We typically use these monthly terms;

NP = The number of New Patients you see in one month
PVA = The average number of times a patient will see you.
OVA = The average dollar amount collected for each encounter

These are the only three areas you can invest money in.

New Patients – Investing in this category might include screening at local festivals or expositions, putting an ad in the paper, telemarketing, website or online marketing, social media, Dinner with Doc etc.

Patient Visit Average – Investments here might be a Brican Patient Education System, upgrading the aesthetics of the office, Neuropathalator, or even just spending the extra dollars on upgrading your paperwork with Patient Media.

Office Visit Average – Investment here might include hiring a billing consultant for 3 hours to make sure you are charging for what you do, adding supplements or pillows for sale in the office, or maybe outsourcing your billing to achieve a higher collection percentage.

NOTE: Hiring a practice management coach may be able to help you in all three categories.  I have been in Five Star for 7 years and I am also a big fan of Dr. Dill’s That Something Coaching Program.

The Magic

It is easy to understand that if you invest in New Patients then you will get more new patients and receive a linear growth. NOW, watch this for EXPONENTIAL growth.  Let’s say we spend $1,000 per month attending festivals and screening events that gets us a mere 5 more new patients per month.  Then we invest $300 in Daniel Clark’s New Patient Book for each New Patient along with $1000/yr spent sending out a newsletter to tackle our retention (PVA) category.  Finally, we invest $1,000 in a billing and coding consultant to help us make sure we are billing correctly and collecting timely patient payments to increase our collections.

NP        X        PVA           X            OVA       =          $$

Last year        20        X         15            X             35         =       $ 10,500

2009             25         X         20            X             40         =      $ 20,000

We invested $14,300 distributed over each of the 3 categories to get a small gain of 14-25% in each category.  However the whole practice received an additional $114,000 in revenue for a near 100% return on our investment.  What other market are you going to see that in?

Onward and Upward,
Darren