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Enterprise Profitability for the Medical Professional

I recently attended a seminar on profitability. This particular seminar concentrated on helping medical professionals fine tune their expertise with regards to the business aspect of their business.



Why is that important? Many businesses, including medical services, are started because someone is passionate about their skill or craft. They have a knack for working with people and figuring out how to fix them. So, a business is born; and with it, all the paperwork.



In my line of work, I find a lot of medical providers/businesses want to expand, but do not know how to make it happen. For example, as a sole propietor of a dental office, they do everything: see patients, deal with employees, etc. A secretary/office manager is typically in the office greeting patients, filing; but s/he does not really have any decision making authority. And if she does, she probably does it all without any internal controls.


So, how does the dentist, who works long hours with patients, step back and take an overview look at their practice.



Well, Enterprise Profitability is a great way to take a boring topic, personalize it and learn how to take the necessary steps in growing your business. The biggest take away is that profit is an illusion and does not mean anything until you get paid. In the medical services world, getting paid is difficult, given the current payer system. Nevertheless, there are strategies that can be utilized in order to optimize the revenue stream.




Laura McAdam, MSOD, CPS, CIA moderates the sessions.

Give her a call at 630-530-1171 or email: lauramcadam@comcast.net.

The next General Business Session for Enterprise Profitability is December 9, 2009. You will take away at least 3 easy steps that you can implement the following day in your business. It's that simple.

Business as Usual

We have all watched and read the news nervously the past few months as Wall Street and the White House best decide how to handle the country’s newest financial crisis. But what few people, especially business owners, ask themselves is, ‘What does this really mean for me?’

The answer: Re-evaluation of the coming year’s business plan, some forecasting adjustment, and in the end, not much .

This newest economic slowdown can be interpreted as part of the economic cycle. We, as a country, have been through numerous recessions and stagflations through the years. The recent failures of Wall Street giants do not necessarily mean the business owner is going to shut down.

All business owner should re-evaluate expenses to make sure spending aligns with the overall business plan; however, growth and maintenance of any company relies upon continuing to operate in a manner consistent with the company’s overall vision.

Many in the business world view this current crisis as an industry-specific recession; affecting those companies associated with the financing and banking industries. According to Jim Elsener, business writer for The Business Ledger, “You have to separate what is bad business from a recessionary trend.”

Getting credit is more difficult. Nevertheless, a company or individual who has a good credit history, as well as cash collateral are able to find financing. Banks are not freezing loans, just being more responsible to whom they lend money. The current state of affairs does not allow risks to be taken as loosely; lending institutions are being more selective in their lending practices.

When a company has something of intrinsic value to sell, there are buyers. The overall quantity of bids may be low; quality of bids, however, should remain high.

The bottom line is…business as usual. Our economy needs companies of all sizes to continue selling and buying.

To read more from Jim Elsener’s article, please click here.

Strategic Planning Crucial in Real Estate

Anytime decisions are made regarding the allocation of a company’s assets, the decision makers generally consult the company’s overall business strategy. Such actions as hiring and firing, purchasing equipment, and production demand knowledge of a company’s strategy in order to execute the plan appropriately.

However, many business owners do not fully realize that real estate decisions also need to be tied directly to the company’s overall business plan.

Without this type of executive planning, companies run the risk of getting themselves into difficult real estate transactions. Defining a company's real estate investment leads to positive productivity and growth, rather than negatively impacting the company's pocket book

In an article written in the Journal of Real Estate Research, authors Hugh O. Nourse and Stepehen E. Roulac provide rationale for incorporating a company’s real estate needs into its overall corporate strategy. Some topics that warrant consideration before any real estate transaction should occur include:

• What value does the new real estate add to the company?
• Is real estate essential to the success or failure of a firm’s product distribution, or an auxiliary factor of production?
• How important is geographic location to the business?
• Are workers impacted by a specific office or building design; specifically regarding job performance?
• Is there a plan in place should the company need to upgrade facilities in the future?

Surprisingly, many business owners do not give proper thought to incorporating, or even designing, a real estate strategy that fits into the overall business strategy of an organization. There needs to be a plan for action should an organization require real estate now or in the future.

Furthermore, many businesses focus in on “let’s make a deal” approach in securing real estate. Shopping around and performing due diligence is always recommended, however, price should not be the ultimate factor in making a real estate decision. The most important decision making factor should be whether the property connects with and supports the company’s overall business strategy.

In conclusion, tying real estate decisions to a company’s overall business strategy is crucial for any firm. Real estate decisions are just as important as those affecting personnel, production, or operations. Otherwise, it is possible that corporate real estate decisions “may be made that are unrelated to or even in conflict with the enterprise’s overall business strategy rather than being consistent with the real estate strategy and thereby reinforcing the overall business strategy” (Nourse 488).

To read the entire article, please click here.

Nourse, Hugh O. and Roulac, Stephen E. “Linking Real Estate Decisions to Corportae Strategy.” Journal of
Real Estate Reasearch. Volume 8, Number 4. 1993: Pages 475-494. 30 September 2008.

When does the business owner engage with a Commercial Real Estate Broker?

As a business owner, there are so many details on an ongoing basis. Operations, profitability, growth are just some of the big ideas that need to be addressed in a business. So, when do you start thinking about your business' space requirements? And when do you engage a Commercial Real Estate Broker to look out for your interests? It may be necessary to have your space before you even chat with a customer. Or, you may be 8 years into a home office and realize that in order to grow you need some space where your employees aren't walking through your home.

No matter if its the grand opening of your business or just a need for expansion, a business plan with a sound financial strategy is a must have. Some business owners have trouble with business planning. No worries. There are consultants out there that will assist and bring value to your business endeavor. They will help strategize as to the best course of action to take. It's not worth wasting your time and your potential Broker's time with ideas that are logistically difficult to implement.

Collective Bargaining

As a small business owner, I believe its very important to focus in on the economies of scale, especially when it comes to office space. Let's say you are a company of 3 people that requires two offices, large work area, small reception and a coffee bar (would be a nice perk). At the same time, you know of one to three more people that would like to become your office mates.

In this situation collective bargaining may be a great way to go. You are sharing space without paying a premium to the executive suite centers. By going to larger space you have an opportunity to share come area expenses, copy machine, phones, fax, etc.

Nevertheless, one has to pay attention to the structure of the lease. Is one company going to sign and have separate agreements with the other office mates; or do all sign the lease? The situation can become tricky and should be worked through with someone that has knowledge in this area of lease negotiation.

Is green the way to go?

Green is the hot new trend. GE has coined ecomagination as their way of solving environmental problems. The waste management company at my office recently instituted recycling. The phone guy I met the other day recycles every piece of the old phones he uninstalls, including the cable.

So, how can the typical business owner add a little green to the real estate acquisition process? From a macro thought process, one can look for buildings that are LEED certified. This means that the building has met environmentally friendly standards. This is great with new construction, as commercial developers are jumping on the environmentally friendly bandwagon.

Yet, not every business owner has the ability to take adavantage of a LEED certified building. Simpler green ideas include energy efficient light bulbs, use of eco-friendly modular carpet tiles, recycling as part of the janitorial service. All of this comes down to the idea of "sustainability".

According to the Environmental Protection Agency (EPA) the "concept of sustainability encompasses ideas, aspirations and values that continue to inspire public and private organizations to become better stewards of the environment and that promote positive economic growth and social objectives."

I think that all business owners can incorporate sustainability in their real estate acquisition process. It's just a matter of asking the green questions.