| GROWING YOUR AESTHETIC PRACTICE | PRACTICE MANAGEMENT
evaluated to determine the benefits to the practice. Staying on budget and the need to demonstrate the value of these initiatives are the primary drivers for the increased interest among practitioners in evaluating return on investment. ROI can be determined to measure efficiency in the use of funds, or overall profitability. Ask yourself these questions: what do
we get back for what we spend? Do expected returns outweigh/justify the costs? For example, a result greater than zero would indicate that your returns exceed your costs, whereas a negative ROI means that costs outweigh returns.
Non-revenue generating investments However, not all expenses can be measured with a sufficient level of accuracy. Rather than measuring returns solely on cost effectiveness, factors such as staying competitive are also used to determine the overall returns that a new investment brings, such as capital equipment, technology or a physician extender. It is difficult to calculate how you justify a tactic that may be critical to your practice remaining relevant in the marketplace. Before you consider the financial impact of any
potential investment, you also need to evaluate the nonfinancial aspects of it. This is especially important for investments that do not directly generate revenue or lower operating costs, since the nonfinancial considerations of these investments may weigh more heavily on your decision. Ask yourself if this investment fits
with the practice’s overall business strategy, goals and priorities? For example, if your marketing strategy is to focus on attracting younger patients, updating your waiting room and investing in online marketing and social media are strategically in line with your business plan. When you conduct a financial
When you
conduct a financial evaluation, keep your ultimate goals for the investment in mind; for example, to increase revenue and/or improve quality and service for patients.
evaluation, keep your ultimate goals for the investment in mind; for example, to increase revenue and/or improve quality and service for patients. What are the pros and cons of the investment? What alternative opportunities are out there? When considering a significant investment for your practice, look at other ways you could use the money and which opportunity may be the best fit for the practice overall. For example, instead of purchasing a new fat reduction system, consider whether you would benefit more from expanding your office space by adding more treatment rooms. Let's turn to our four successful practitioners from
dermatology, plastic surgery, and facial plastic surgery for their candid comments and honest recommendations.
prime-journal.com | March 2015 ❚
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