Growth vs. Profitability: Striking the Right Balance for Success in Your Weight Loss Practice
— By Karol Clark, MSN, RN
Striking the balance between growth and profitability is a primary component of success in the highly competitive field of medical and surgical weight loss.
Growth and profitability are two essential, yet distinctly different objectives for both small and large weight loss practices. Although interconnected, they represent different factors that require balance depending upon your current situation and goals.
While growth can be measured in various ways, it broadly refers to an increase in the size of your weight loss practice. Profitability refers to the amount of profit or financial gain your practice generates once all expenses required to provide your services and products are subtracted from your gross revenue.
There needs to be a balance between growth and profitability because if you focus too much on growth, you may sacrifice profitability, creating potential cash flow problems. Conversely, if you focus solely on profitability, you may miss out on opportunities for growth.
Ways to Measure Growth in Your Weight Loss Practice
How large or small you want your practice to be is your decision, based upon your vision and goals. While your vision can (and likely will) change over time, you get to determine what that looks like — as well as the strategies you will employ to bring your vision to fruition. You can measure growth in your weight loss practice in a variety of ways such as:
- Total Revenue
- Number of New Consults and Patient Visits
- Volume of Surgeries/Procedures
- Nutritional Product Sales
- Need to Scale Your Practice with More Providers/Team Members
- Size of Your Patient Database
- Required Expansion in your Space or Additional Location(s)
- Demand for Wait/Cancellation List
No matter how you measure growth in your practice, it is something that requires strategy, planning, key metric measurement, clear communication with your team, and consistent action.
Weight Loss Practice Growth Initiatives
Growing your weight loss practice requires a strategic plan that combines marketing, patient engagement, quality care, positive outcomes, and operational efficiency. If you have a small team, focus on one initiative at a time starting with the one that is most promising or requires improvement. However, all are important and interrelated. Below are some effective business growth initiatives:
- Digital Marketing: Online marketing strategies such as optimizing your website with search engine optimization (SEO), pay-per-click (PPC) advertising campaigns and engaging with prospective patients on social media can be a great way to attract new patients to your practice.
- Content Marketing: Creating and posting informative and relevant content on your website through blog posts, videos, and infographics and linking to them from your social media channels helps improve your website’s search engine ranking, and drives organic (free) traffic to your practice.
- Online Reviews/Reputation Management: Encourage satisfied patients to leave a 5-star review on Google or other platforms. Respond to all reviews to show your commitment to patient satisfaction and continuous improvement.
- Patient Referral or Ambassador Program: Invite your happy patients to promote you and your practice online and refer others who are seeking a similar weight loss transformation.
- Telemedicine: With the ongoing desire for remote health care offerings, telemedicine services can help you reach patients who are unable to visit your physical location for any reason. Thus, expanding your reach.
- Quality Patient Care: Providing top-quality patient care results in satisfied patients who are more likely to refer others. It also strengthens your long-term relationship with them and their likelihood to continue to utilize your services and nutritional weight loss products.
- Patient Education: Offer educational materials, webinars, classes or weight loss challenges to enhance results and keep patients engaged and on track. You can even create an online weight loss program as an additional offering and revenue stream. Patients seek information every day and you should be the one providing them with the answers they desire and need.
- Health Insurance Participation: If applicable for your practice, participate in a variety of health insurance plans to make your services accessible to a broader range of patients. This can help with attracting and retaining patients.
- Networking: Meet with referring physicians and groups that have patients or an audience that would benefit from your services and products.
- Partnerships: Consider strategic partnerships or affiliations with larger health care systems or specialty clinics to gain access to a broader patient base and resources. You can do the same with local or online companies that serve the same population.
Ways to Measure Profitability in Your Weight Loss Practice
Profitability is an ongoing effort that requires regular assessment, adjustments and planning. It is most commonly measured by subtracting your cost of goods sold, direct expenses, and indirect expenses from your gross revenue. When profitable, this is a positive number. Ideally, your profit/loss statement should also reflect the profitability by cost centers or practitioners depending upon the structure of your company. Another indirect measurement of profitability is a positive return on investment for your marketing endeavors and other investments along with minimal/no debt. All of these factors into your cash flow and ability to invest in growth initiatives.
Weight Loss Practice Profitability Initiatives
To ensure profitability, consider enhancing the following strategies:
- Revenue Optimization: Regularly assess your fee schedule to ensure that your charges are in line with market rates for the services you provide. Consider missing cash-pay programs, memberships, or bundling opportunities.
- Expense Control: Conduct regular expense analysis to identify areas where you can reduce expenses without compromising patient care. Optimize your staffing levels to meet patient demand without overstaffing. Cross-train employees when possible.
- Operational Efficiency: Maximize use of your software systems and consolidate when you can. Develop and maintain standardized operating procedures to ensure proper team training and predictable quality patient care.
- Data Analysis: Monitor and analyze practice performance from work standard and financial reporting standpoints. Identify areas for improvement and make data-driven decisions.
- Cash Flow Management: Implement effective accounts receivable management to reduce outstanding balances. Create a detailed budget for your practice and monitor expenses to make sure you stay within budgetary constraints.
- Compliance: Ensure that your practice complies with all health care and billing regulations to avoid costly legal issues and penalties.
Striking the Right Balance between Growth & Profitability
Both small and large weight loss practices must find the right balance between growth and profitability. The strategies and priorities as outlined above they choose to adopt can differ significantly. Below are three ways to balance growth as well as profitability for any size weight loss practice:
- Set, Prioritize and Monitor Goal Attainment: In the balance between growth and profitability, it is essential to set clear priorities for your practice. Determine your primary goals and objectives, whether they lean more toward expansion or profitability, and use these as a guide for decision-making.
- Commit to Continuous Report Analysis and Interpretation: Regularly assess the financial health of your practice. Monitoring key performance indicators (KPIs) monthly by cost center such as patient volume, charges, accounts receivable, revenue, expenses, and profitability can help you make data-driven decisions.
- Be Resourceful, Resilient and Flexible: With the health care landscape constantly changing, it is important to be resourceful, resilient, and flexible. Being adaptable and open to changes in your strategy as market conditions and patient needs shift. This may mean adjusting your focus from growth to profitability or vice versa as circumstances warrant.
It is important to mention — as you know — that successful growth requires a patient-centered approach. So, while mastering the balancing act between weight loss practice growth and profitability, staying true to your vision and what is best for the patient increases your chances for satisfaction and success.