Why should you consider a budget for your practice?
In order for your practice to achieve maximum success, dependable budgets are necessary for sound planning. Budgets help to define and predict production and revenue information and dollar requirements for areas such as labor (hiring, raises, etc.), clerical and clinical supplies, laboratory costs, rent or mortgage expenses, capital expenses (equipment and maintenance, etc.), communications, administration, marketing, the development of new products and services and/or changes proposed for existing products or services, leasehold improvements and servicing debt
Why some practices avoid budgeting …
- Many doctors are comfortable with status quo and see no value in spending time preparing budgets.
- Owners accept fate and hope for the best.
- Owners lack the expertise necessary to prepare a budget.
- Someone tells the owner/doctor that budgets will not be necessary.
The importance of detailed budgets …
Business owners need to carefully analyze how their actions (price setting for services, purchasing supplies and equipment, hiring employees, etc.) might impact profit before making final decisions. Understand that each decision carries numerous ancillary consequences with it.