In my 18 years of consulting I have heard it all. Everything from competition to managed care as reasons why it’s hard to create
business of your dreams. New customers are needed to keep any business going but it is how you and your staff manage these customers that determines your success in business.In every business that I have gone into over years, what amazes me most is amount of lost income from poor handling of major income generating areas of any business. I will cover four of them.
The actual amount of lost income can be calculated. I will describe where you are very likely losing large amounts of money and why. These areas if handled will help you lose less money in your business or in other words, make more money.
Where am I losing money in my business?
Business owners are always looking for ways to increase revenue but we seldom address areas where buckets of money may be slipping from your fingers. It is common to look at cost of handling a situation in your office, but little attention is paid to fact that not handling a weak area of your business is costing you way more than what it may cost to solve problem.
You need to be able to measure top basic areas and way to do it is with statistics. How can you evaluate how close you are getting toward handling any weak area of your business or enhance an area already doing well if you are not using statistics? Operate off of statistics.
Most business owners commonly fail to look at what they are currently losing from weak business management and poor training of staff. Here are four of key areas of lost income within organization.
1.You can lose money with poor reception control.
Ideally, with proper reception control at front desk, on phone and certain procedural actions in place you can achieve a higher percentage of closed customers. To degree that control at front desk is missing or customers are dictating when they will come in or not, you will be losing money. A good receptionist is key to directing incoming traffic, whether via phone or in person to proper staff member quickly and with good control. This is quite honestly an easy fix and can improve your bottom line quite markedly.
2.You can lose money from having a poor collections ratio.
Depending on your business, once you make adjustment in your production for other plans such as managed care, etc. you should be collecting 95% of remainder. Ideally, when calculating your true collection ratio you would use last six weeks of collections divided by previous six weeks of production. There are actually eight areas, if fully handled, that will put your collections ratio in a whole new range.
3. You can lose money from having an untrained or poorly trained staff.
Take your average weekly collections divided by number of Full Time Equivalents (FTE). Don’t forget to include owner’s hours and if he or she works 60 hours that is a 1.5 FTE. Every staff member has value to organization, but some are clearly more valuable than others. When you have a staff member that knows what to do, is very efficient in his or her ability to get job done and somehow motivates others, you know they are worth their weight in gold. What is sometimes difficult to understand is that getting employees to actually do their job with a high degree of productivity IS attainable. Every time you hire someone within your organization you should have a certainty as to how much income per week they should bring to table through their efforts. The average should be somewhere around $3,500 a week for each FTE.
