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Steps To Keeping Your Business Lucrative
By Jodi Mills Tom DiBello, CO, FAAOP, president/CEO, Dynamic
Orthotics & Prosthetics, Houston, Texas, notes, "The cost of
absolutely every aspect of business have risen, while our
reimbursement has gone down. This has been a consistent trend for
the past five to ten years."
What is the beleaguered O&P business owner to do?
Here are some steps to sunnier days:
Cost Accounting Is a Must
Cost accounting is a continual process. At regular intervals,
say every six months or at least yearly, take time to review
salaries, insurance (health, liability, workmen's comp, etc.),
administrative costs, and discounting, to name a few of the larger
expenses you incur. Don't forget to check the minor expenses as
well: Do you own or lease your office equipment and what are the
pros and cons of either option? How about telephone costs,
including monthly base rates, long-distance charges, and Internet
access? Can you negotiate a better deal with your current carrier?
Don't be afraid to make a change once you've thoroughly researched
the options.
If such a review of expenses is delegated to someone on your
administrative staff, be sure you take the time to review their
findings so you have a complete understanding of where your
company's money is going. Ignorance is not bliss in this
instance-stay in the know. By brainstorming once or twice a year,
you can often change things that aren't working or reassure
yourself that the choices you've made have proved successful.
(Some suggested reading: Principles of Cost
Accounting, Edward J. Vanderbeck, July 2001; Cost Accounting:
A Managerial Emphasis, Horngren, Foster, Datar, Datar, March
2002.
Surround Yourself with Great
People
Let your staff know how much their efforts contribute to the
overall success and longevity of the company. Efficiency and hard
work will grow your business.
From day one, be very clear about what is expected regarding
responsibilities and workload. An increase in salary or a bonus
plan is a great reward for exceptional performance, helpful ideas,
and showing initiative. Other perks could include gift certificates
to the local mall or a great restaurant. Regular displays of
appreciation can yield much in relation to employee
performance.
Be sure your staff size is appropriate for the amount of
business you have. You neither want employees sitting around with
nothing to do (overstaffed), nor do you want employees so stressed
that they can't keep up (understaffed). Find the balance.
Education and Association
Involvement
Association involvement is a great way to hear what others are
going through in their businesses. It also affords the opportunity
to work as a team to educate insurance companies, Congress, and
others in related fields as to the unique value of O&P. Have
high standards, give attention to detail, and be tough (in a nice
way, of course). Don't assume insurance companies or lawmakers
understand O&P and all it encompasses. Educate and explain
until you are understood.
Says DiBello, "We must all do a better job of educating the
insurance companies to the cost-effectiveness of the work we do,
its custom nature, and its significant complexity. Even in
orthotics, we are now beginning to work with some complex knee
components." He continues, "We have not done a good job in the past
of demonstrating that we put people back to work. We help to
rebuild lives, and we need to effectively demonstrate that to
insurance companies."
Technology Is Your Friend
This can be a difficult area to keep up with, given the rapid
changes that seemingly appear daily at times. However, assigning
someone on staff to investigate the latest in technological
developments specific to O&P can be of great benefit. Does the
equipment you utilize pay for itself? Technology is supposed to
make our lives easier, not add ten extra steps. This would also
apply to office equipment and bookkeeping software-anything that
will make your business flow and grow.
Keep a Close Eye on A/R and A/P
Don't think it'll take care of itself. Familiarize yourself with
your inventory. Don't overstock items. Regularly call your accounts
receivables. "Regularly" means that, at least once a month, you
call any that are overdue by 30 days or more. If payment in full
cannot be made at that time, negotiate for partial payment as
kindly and firmly as possible.
Marketing-Another Part of the
Formula
A marketing program is also a key to improving the future of
your business. Patty Johnson, executive vice
president, Ron Sonntag Public Relations, comments that the firm's
clients have incorporated a marketing program into their overall
business and presence in the medical community. By doing this,
these companies have accomplished much. "The companies have a
positive outlook on business and marketing," says Johnson. She
continues, "They educate and inform other members of the medical
community about O&P through newsletters, in-services, and
facility tours; they educate patients through literature and
through supporting local community events such as golf clinics and
senior events. Many participate on a national level in meetings and
symposiums, growing their knowledge, not just for their own good
but for others."
Her good advice is an important part of the formula for success
in the current O&P business climate. "Share any strategies you
may have in place currently or are thinking of implementing in the
near future," says Johnson. "Having some type of a marketing
program in place, no matter the budget size, is much easier than
trying to play catch up in a competitive marketplace."
Meticulous cost accounting, a forward-looking marketing program,
and a super staff both clinical and administrative are elements of
success. Be sure to include them in your business strategy! 
Table Of Contents - August 2003
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