If you own a naturopathic medical practice and you’re wondering how you’re supposed to maximize profits from your business, you’re not alone.
You’re in a unique position. Not only do you have operating expenses — which take up the bulk of your revenue — you may have hundreds of thousands of dollars in medical school debt to pay off.
In fact, when you consider the median salary for a naturopathic doctor is about $60,000 a year in private practice compared to a primary care physician at about $186,000, you realize you’re at an unfair disadvantage.
So how exactly can any naturopathic doctor justify taking more money?
Most people believe it’s important to invest more money into your business early on. That way, you can grow faster. Right?
Well, if you scale up too soon, you’re actually going to be left with more expenses. You will be stuck in Groundhog Day and the push to increase your profit gets delayed another few years.
The real solution is simple. Start paying yourself more NOW.
Here are three simple steps to get started:
1. Make Profit a Habit
Profit isn’t something that you take out of your end-of-year revenue.
It needs to be your first priority. That means you need to allocate a small percentage of revenue into a profit account, FIRST. Do this every single month.
This is the first step toward a more sustainable cash flow system and will lead to long-term success.
Not only will you eventually be able to invest that money back into the business if an opportunity arises, you are also prepared for any unforeseen crisis that could occur. Maybe a global one.
The only way to make sure you consistently manage your finances well, is to make profit a habit.
2. Manage Smaller Plates
Reducing portion size is guaranteed to help us control our weight, but we habitually fill up our plates and subsequently eat everything on those plates.
Putting all your business funds into a single account means you are inevitably going to spend that money. The key to success? You need multiple, small accounts.
Think “envelope system” here. With smaller, categorized pockets of money to use in your business, you become more efficient with how you use it.
New business owners typically view growth as the path that leads to profitability. But as your medical practice grows, your expenses will only pile up. If you target profit first, growth actually becomes a direct result of your success and expenses are no longer a serious issue.
That is because you are now running your practice on what you can afford today and not what you think you can afford in a few years.
3. Eliminate Unnecessary Expenses
One of the best ways to understand this final step is to imagine you are packing a suitcase. Only you have too many clothes you want to put in. So what is the logical thing to do?
Remove the clothes that you don’t need. Then remove that book you’re not going to read. And then remove those extra shoes you aren’t going to wear. Now you’re able to finally zip up the bag.
When you eliminate unnecessary expenses you automatically have additional funds to reinvest into your business without compromising on profit.
When you identify your ideal financial future, develop simple savings strategies and stick to the plan, you are guaranteed to achieve your goals.
When working with our clients, the first step is to help them define what success looks like three, six and 12 months down the road. Then we build a clear plan to help them build a stronger and healthier practice.
Our monthly progress reviews ensure they stay on the path, build momentum and achieve their ideal financial future.