Published - July 2013
FROM THE ROAD
By Dave Jakielo
What Type of "Active" are You?
In today's medical billing arena, you will find two types of companies. Those that are growing and taking their business to the next level have embraced a "proactive" approach. Others that continue to shrink may decide to remain in a "reactive" mode.
For many decades, a billing company could stay in business by relying on referrals for a steady or slow growth rate; however, that strategy is not very viable today as practice mergers, acquisitions, and national staffing companies employ a greater number of practitioners.
Companies are losing clients and will continue to do so if they just sit around waiting for things to happen like in the "Good Old Days."
So what are the successful companies doing to remain vibrant? I will let you in on a secret: the two things that successful companies have in common are a well-thought-out strategic plan and an active marketing plan.
Both of these plans go hand-in-hand because you need to answer some of the same questions when developing either one. Let's take a closer look at some of the questions that you should answer once you decide to take the "proactive" approach in your company.
Before beginning, answer these three questions:
- What is my current annual revenue?
- What would I like my total annual revenue to be?
- When would I like to hit this revenue goal?
Developing answers to the above questions will allow you to see how aggressive your strategic plan will need to be. For example, if you have been an approximately million-dollar company for the past five years and would like to double your size within a one-year period, obviously you must radically change how you have been spending your time.
Here is a hint: if you say, "I hate spending time relating to sales and marketing activities!" then you have a slim chance of surviving in this industry. Given that everyone wants to thrive and grow, let us examine the components of a strong marketing plan. Remember, when answering the questions below, if you are not honest, then you are only fooling yourself.
- What is your growth and absorption timetable? Do you have capacity when it comes to things such as management talent, office space, and billing software? How long does it take you to successfully ramp up a new client? Could you install more than one new client a month? How many per quarter? We all know that a bad start up can damage our reputation for a long time and lose us clients.
- What specialties do you want to service? (Your answer to this question should not be, "All of them!") It is essential that you remain focused for a variety of reasons. Focus helps you to invest your marketing dollars wisely and to have the ability to stay up to date with the specialty's coding nuances.
- What geographical areas are you going to service? We all know that there is a longer learning curve and that it is more expensive to take on a client in a state where we have not previously billed.
- What will your minimum client size be? Everyone should determine a minimum client size based on revenue. If you want to grow by a million dollars in the next year and you are willing to take any size of client, it will be difficult to achieve your goal. On average, a solo practitioner generates less than $50,000 a year in revenue for a billing company, so if your goal is a million dollar increase in revenue, you would need to sign 20 solo clients in 12 months. That seems like a lofty and unattainable target.
I really do believe that this is a great time to be in the billing industry. Opportunities are endless, but you must pay attention to what is occurring in your immediate vicinity, your region, your state, and nationwide. Although the traditional channels where we previously found clients may be evaporating, new floodgates are opening.
Some great examples of places to find new clients include practices that are outsourcing their billing functions for the first time, hospitals that have purchased practices, and practices that are looking for practice management advice and expertise.
So don't get discouraged. Just get moving, develop your plans, and become "proactive."
Dave Jakielo, CHBME, is an international speaker, consultant, executive coach, and author, and is president of Seminars & Consulting. Dave has been helping companies grow and improve their profitability for over four decades. Sign up for his FREE weekly Success Tips at www.Davespeaks.com. Dave can be reached via email Dave@Davespeaks.com; phone 412-921-0976.