|
Article:
4 Areas Where Your Business is Losing Money by: Jeffrey F. Lee In my 18 years of consulting I have heard it all. Everything from competition to managed care as reasons why it's hard to create the business of your dreams. New customers are needed to keep any business going but it is how you and your staff manage these customers that determines your success in business. In every business that I have gone into over the years, what amazes me most is the amount of lost income from poor handling of the major income generating areas of any business. I will cover four of them. The actual amount of lost income can be calculated. I will describe where you are very likely losing large amounts of money and why. These areas if handled will help you lose less money in your business or in other words, make more money. Where am I losing money in my business? Business owners are always looking for ways to increase revenue but we seldom address the areas where buckets of money may be slipping from your fingers. It is common to look at the cost of handling a situation in your office, but little attention is paid to the fact that not handling a weak area of your business is costing you way more than what it may cost to solve the problem. You need to be able to measure the top basic areas and the way to do it is with statistics. How can you evaluate how close you are getting toward handling any weak area of your business or enhance an area already doing well if you are not using statistics? Operate off of statistics. Most business owners commonly fail to look at what they are currently losing from weak business management and poor training of staff. Here are four of the key areas of lost income within the organization. 1. You can lose money with poor reception control. Ideally, with proper reception control at the front desk, on the phone and certain procedural actions in place you can achieve a higher percentage of closed customers. To the degree that the control at the front desk is missing or the customers are dictating when they will come in or not, you will be losing money. A good receptionist is key to directing the incoming traffic, whether via phone or in person to the proper staff member quickly and with good control. This is quite honestly an easy fix and can improve your bottom line quite markedly. 2. You can lose money from having a poor collections ratio. Depending on your business, once you make the adjustment in your production for other plans such as managed care, etc. you should be collecting 95% of the remainder. Ideally, when calculating your true collection ratio you would use the last six weeks of collections divided by the previous six weeks of production. There are actually eight areas, if fully handled, that will put your collections ratio in a whole new range. 3. You can lose money from having an untrained or poorly trained staff. Take your average weekly collections divided by the number of Full Time Equivalents (FTE). Don't forget to include the owner's hours and if he or she works 60 hours that is a 1.5 FTE. Every staff member has value to the organization, but some are clearly more valuable than others. When you have a staff member that knows what to do, is very efficient in his or her ability to get the job done and somehow motivates others, you know they are worth their weight in gold. What is sometimes difficult to understand is that getting employees to actually do their job with a high degree of productivity IS attainable. Every time you hire someone within your organization you should have a certainty as to how much income per week they should bring to the table through their efforts. The average should be somewhere around $'3
|
