Best Practices to Keep Your Practice Economically Buoyant During Uncertain Times
Every business wants to stay afloat during an uncertain and unfavorable time in the economic market. While no business is recession-proof, some are more downturn-tolerant than others. Inelastic industries such as healthcare tend to outperform others when faced with an economic decline. However, healthcare practices are not immune to the effects of a recession, and their growth will depend on how they are run.
The effects of a recession are often, but not always, stronger for a practice smaller in size with typically fewer resources, revenue, and team members. This article focuses on small healthcare practices and what they can do to withstand the effects of a recession and prepare their practice for an economic contraction in the future.
Is a Recession Coming in 2022?
There are a few different ways to measure a recession and multiple factors to consider such as the labor market, consumer and business spending, industrial production, GDP factors, and incomes. Still, the widely-held definition says that a recession is a reduction in GDP over two quarters.
According to The Bureau of Economic Analysis, an economic decline or pullback occurred in the first and second quarters, as of July 28, 2022. Traditionally, this pullback would signify that we are in a recession; however, it is not the entire picture. Other factors like a strong labor market and high consumer spending could support the argument that we are not completely in a recession today but might be close.
What is Recession-Proofing?
Just as a homeowner can bug-proof their home to create a barrier from pests, so can healthcare entrepreneurs create a barrier in their practice to withstand some of the economic impacts of a recession. Recession-proofing is a term used to describe an asset, business, or industry that is believed to be economically resilient to the effects of a recession.
To cut costs, many companies will look to labor, capital spending, marketing, and research. For some larger healthcare companies, the impact of a recession is often less detrimental, and a decline in sales won’t mean the end of the road. Small practices have a much riskier outlook when it comes to a recession, even for essential industries like healthcare. One of the leading factors is that a small practice is often owned by a single individual, and a revenue downturn directly impacts the cash they take home.
Recession Proofing Business at Your Practice
7 Tips to Survive a Recession
1. Understand the economic climate
Economic declines occur from time to time, and it doesn’t mean the end of the world. Preparation is key to planning for the inevitable and staying resilient. Ask yourself, what principles should my practice put into place to retain profit even when we aren’t at our peak?
When a recession finally does hit, don’t panic. Avoid making rash decisions based solely on numbers or media stats you see on the news. Before making any decisions, slow down and get an accurate picture of the economic climate. Keep in mind that your competitors are also facing the same decline. The actions you take or don’t take during this time could give your practice an edge over the competition.
2. Take Control of Your Cash Flow
Taking control of your cash flow means you have an exact idea of your financial health. Create a clear picture of your cash flow and assess where your money is coming in and going out.
How easily your patients can pay their bills is a good indication of your financial health. Invest in software that can automate payments with convenient payment methods like Google Pay, Apple Pay, and Text-to-Pay. This creates cost transparency for your patients and helps your practice get paid faster. To learn more about the benefits of convenient payments, click here.
3. Don’t always cut the most expensive area first
Businesses adopt a more frugal frame of mind during a recession, and so does the general public. Your patients want to spend their money in areas where they see the most return. Examine which areas are adding the most value to your patient’s experience and avoid nixing those costs.
When you start cutting corners to save money, you risk damaging the experience of your most valuable asset-your patients. Consider stopping unnecessary personal spending such as first-class seats on flights, unnecessary trips, expensive meals, and frequent dining out.
4. Create a positive experience worth sharing
When patients are pickier with expenses, creating a positive experience for patients is vital. Impress your patients with automation and engagement tools like two-way texting and appointment reminders. Ask for positive feedback when you believe a patient had a good experience. Use tools to send feedback requests and give patients an easy way to leave a review that doesn’t take much time.
5. Invest in your team
The last thing you need during a recession is high turnover and uncertain staffing. Build a deeper connection with your team with fun work events and team-building exercises, so they enjoy their job. Listen to the feedback they have and take opportunities to ask for it.
Your staff are on the front lines every day and often have insight into how your practice can improve. Invest in tools that organize communication in one central spot and make team collaboration simple. Tools like Team Chat from Weave provide team communication on a single platform.
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6. Create an indispensable experience
At the end of the day, your patients are your practice. They will want to come back if they can count on a positive experience time and time again. Do your patients feel that their experience and service at your practice are absolutely necessary and vital to their well-being and health?
Simple tactics like remembering birthdays, using first names, asking about family, and smiling are free and easy ways to create a positive experience and provide an indispensable experience. Not every patient experience will be positive, but remembering the little things can make a difference.
7. Maintain perspective
Economic declines are always temporary; eventually, the market will start picking up. Patients will have more spending money, sales will increase, and your practice will have more revenue to invest. Maintaining this perspective as you make decisions for your business is important. Continue to make entrepreneurial decisions that will help your business to grow before, during, and after the recession.
How to Make Money in a Recession
The people you serve and employ are the heartbeat of your practice. Your patients want to spend their money wisely and will notice if you start to skimp on quality. Don’t subsidize your quality and worth because of economic pressures. Patients will return to you naturally if they can see the value your practice provides.
Continue to do business as usual and keep asking yourself how you can add true value to your patient’s experience. The money will follow if you continue adding value to your patient’s experience. In the same sense, your team will notice if you cut expenses on tools and operations that help them do their job. When team members are given tools to make their job easier, they can deliver a better experience.
Prepare now and put practices and operations in place to create a more elastic business. Learn from other health professionals about what they did to increase value during economic uncertainty by reading related articles or listening to a podcast.
In Weave’s podcast, the Happy Practice Playbook, dental professionals and office managers break down tips and tricks to maintain an efficient and positive practice. You can learn more about Weave’s podcast here.
Many quote the old business mantra that encourages to “save where you can and spend where you must.” As mentioned earlier, spending in areas that add value to your practice will help to grow your business. Save on unnecessary areas and don’t add value in the long run.
Recession-Proof Jobs in Healthcare
Although no industry is recession-proof, the healthcare industry is quite a bit more elastic than others. According to the American Hospital Association, hospitals and healthcare systems added 2,700 jobs just in February 2022 alone. Jobs in healthcare are some of the most recession-proof because there is always an ongoing need for healthcare. Here are a few of the most recession-proof healthcare jobs ranked by job outlook growth:
- Personal Care Aide
- Home Health Aide
- Diagnostic Medical Sonographer
- Occupational Therapy Assistant
- Physical Therapist Assistant
- Physician Assistant
- Medical Secretary
- Physical Therapist
- Dental Hygienists
- Communication & Engagement Platform
Investing in people, practices, and growth is critical to surviving a recession. These are the most fundamental areas to focus on and will help to add value to your business. Prepare for uncertain economic conditions so your practice can remain buoyant and profitable.
Weave helps small healthcare practices with tools specifically designed for their unique challenges. Don’t risk the consequences of an unfavorable time in the economy because your practice isn’t set up for success with Weave. To receive a free demo and see Weave in action, click here.