business 101

Repair Checklist…Don’t Let Profit Leaks Drain Your Bottom Line

William J. Lynott

Increasing revenue is not always the road to increasing profits. In fact, invisible profit leaks could convert more revenue into less profit.

Here, a checklist of 10 profit robbers and what to do about them.

ELECTRICITY

√ Wherever possible, switch out regular incandescents for low-energy CFLs or LEDs. Despite the higher initial cost for the bulbs, they can provide big savings over the projected 10-year life of the bulbs. If you’re in one of the states in which the industry is deregulated, making the switch might save you as much as five to 10 percent of your total electric bill.

Also, schedule an annual inspection to make sure that your HVAC system is operating at top efficiency. Leaking ducts could reduce energy efficiency by as much as 20 percent, according to Ronnie Kweller of the Alliance to Save Energy.

COMMUNICATIONS

√ Contact your primary provider to see what bundled plans are available in your area. If you are already giving all of your business to one communications company, call and ask for an analysis of your account.

Companies are constantly coming up with new bundling plans, and one of them might save you a bundle. But don’t expect them to come looking for you; you’ll have to ask.

BILLS

√ Most banks offer free online bill paying. Once you sign up and choose a password, you log on to the bank’s website and enter the payee’s name and address, phone number, and the amount to be paid. The bank takes over from there, either by mailing a check to the payee or by making an electronic transfer of the money.

You only need to enter the name and address of a payee once; the bank will store the information for future payments. The next time you have to make a payment, simply click on the payee’s name and enter the amount. The system will enter the rest of the needed information.

PAPER

√ Organizing guru Maria Gracia (getorganizednow.com) suggests ways to end the nightmare of out-of-control paper.

■ The four Ds: Do it, delay it (file it in an action or archive file), delegate it, and dump it.

■ WASTEBASKET. Immediately get rid of mail you don’t need, then use the four-D system on what’s left.

■ INSURANCE. Cut through the smog generated by the insurance industry. In addition to business liability and fire insurance, there are only five types that you must have: life, health, disability (as long as you’re working), homeowner’s, and auto. For most people, the rest are a waste of money.

Once you’ve pared down your list, consider consolidating some of the remaining policies with one company. Bundling policies can save money.

EMPLOYEES

√ Sally Mounts, PhD, president of Auctus Consulting Group,Washington, PA, says, “Successful owners know that their most valuable resource is the people they employ. They reward them liberally, encourage their growth, and look for ways to affirm their value to the company through personal attention and acknowledgement. The result is employees who stay with the company, saving hundreds of thousands of dollars in training a succession of new hires.”

INTERNET

√ The Internet is often the first place customers go when they are unhappy about you. Doing your best to encourage positive feedback can help to protect against a nasty profit leak. Equally important is responding to a negative comment in a helpful way.

COMPETITION

√ Patients are ready and willing to switch to a competitor for the least of reasons.Your job is to make certain that you don’t give them that reason.

PROMISES

√ Broken promises are among the most prominent reasons why customers abandon a business. Should you have to break a promise to a patient—any promise, no matter how seemingly harmless—always contact the customer as soon as you learn about the problem. An early explanation and a sincere apology will go a long way toward easing patient frustration.

It’s the same way with employees. “The workplace is full of unwritten psychological contracts,” says Mounts.

“One is that bosses must act with integrity and keep their word. A boss who breaks this vital precept will never be viewed in the same way; the damage to the work relationship is virtually irreversible. Don’t fall into that trap.”

PUBLICITY

√ Most prospective patients will be far more receptive to a simple news item about your practice than a typical advertisement.

How do you go about getting a piece of the free publicity pie? First, you need to learn what makes a good story. Then, you need to learn how to sell it as “newsworthy” to local media outlets.

That simply means there is something about you or your practice that the public might find interesting. Even simple things like interesting news about you or an employee, changes in your practice, or your own hobbies, activities, or accomplishments can be the seed from which you can get noticed. To get free publicity, you have to actively seek it out—and a contact in the local press.

While banishing these harmful profit leaks won’t solve all of your operating problems, it will help to boost both your bottom line and business reputation. EB

William Lynott is an Abington, PA-based business writer.