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Make 2008 the year to become more profitable by learning how to better utilize your practice management software.

Review the modules and reports available on your practice management software. It is likely there are applications within your own system to help you measure and track profitability. The absolute minimum data you should be tracking are average client transaction fees, new clients, and gross revenues. Close scrutiny of your sales summary reports will help you identify ailing or potential profit centers. Dr. productivity reports should also be monitored. Print all these reports, and any others you think may help you measure and track your profitability. Examine these monthly, and yearly, comparing to the previous months and previous year(s). You may even consider graphing this data if your software doesn't do that handily. Using your practice management software applications to their potential will yield surprising growth opportunities and profitable results.

Fees

The first of the year is a great time to re-evaluate your fee structure. It should include a review of pricing from area colleagues tempered with data available from sources like AVMA, AAHA, NCVEI.org as well as price setting assistance from consulting sources and/or software like Profit Solver or Fair Fees Solutions, etc... The benefit of setting appropriate fees and the profits that come hand in hand will provide the most impact when they have been in place for the full 12 months. That means getting it done in January lest you give up part of the benefit of doing so. Simply ensuring each service and product has a profit can mean not only the difference between red and black ink, but it also can affect practice value. For every dollar of bottom line profit you can often see $3 to $6 of increased practice value. That adds up quickly. It's also beneficial for improvements to be in place for a number of years before a transition of ownership, and since we can't always plan exactly when a transition might occur, you should set this year's resolution to be "my fees assessment will be completed in January". Price increases are usually well tolerated however don't forget to continuously improve your client service and patient care if you are raising fees.

Equipment List

Now is the perfect time to update your Equipment List. Go through each room in your practice and note major pieces of equipment along with serial numbers, approximate date of purchase, and approximate purchase price. Such an inventory of your major equipment is important in case of loss or damage, and in the event of a sale, an equipment list becomes an important part of the sales contract.

Update or new detailed practice appraisal

You cannot figure out where you need to go if you don't know where you are. An appraisal will set a baseline of the practice's value and help set a future goal. It also may illuminate certain practice areas that need attention. It's the first step to start exit planning. Most of the time you will find areas that you can improve to increase the practice value and salability before the planned exit.

Review and update your marketing plan

A new or revised marketing plan will pay dividends no matter when it is assembled. Good marketing plans can be expensive but will improve the image and then the bottom line of just about any practice. Marketing plans set goals and strive to achieve image branding. A good marketing plan will coordinate all advertising and other marketing to achieve the same goal: improve image, attract more and better clients, and improve the bottom line.