The EntreMD Podcast

5 Mistakes Sucking the Profit Out of Your Medical Practice

August 05, 2024 • Dr. Una • Episode 430

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Are you always on the hunt for new clients?

I know the struggle–it can be exhausting and expensive.

But what if I told you there’s a hidden goldmine right within your existing client base?

Let me introduce you to the concept of “second generation revenue”.

Today, you’ll learn how focusing on your current clients can dramatically improve your profitability. I’ll reveal the five common business mistakes driving away this second generation revenue and how to fix them.

So, if you’re a physician entrepreneur looking to build a more profitable, sustainable, and scalable business without constantly seeking new clients, this episode is for you.

Let’s dive in!

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Key Takeaways: 

  • 00:00 Intro
  • 00:45 The second generation revenue explained
  • 03:38 What happens when you lack integrity
  • 06:49 Don’t forget the basics of customer service 
  • 08:46 Minimize errors in your business
  • 14:18 Impact of poor packaging 
  • 15:43 Avoid long response time
  • 19:19 Quick recap
  • 20:57 Effects of solving these five practices
  • 21:43 Outro

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Additional Resources:


When you are ready to work with us, here are three ways:

  • EntreMD Business School Accelerator - If you are looking to make a 180 turnaround in your business in 90 days, this is the program for you.
  • EntreMD Business School Grow - This is our year-long program with a track record of producing physician entrepreneurs who are building 6, 7 and 7+ figure businesses. They do this while building their dream lives!
  • EntreMD Business School Scale - This is our high-level mastermind for physicians who have crossed the seven figure milestone and want to build their businesses to be well oiled machines that can run without them.

To get on a call with my team to determine your next best step, go here ...

Speaker 1:

You're so focused on the process that you forget about the customer experience. We have to be thinking about both things. So the process makes it. It's a win in the sense that, okay, if we work on our times, the times are better, but if you take away all the warmth and friendliness and all of that, then the experience is still not there. Yeah, they got out on time, but the experience is not a good experience.

Speaker 1:

Hi docs, welcome to the EntreMD podcast, where it's all about helping amazing physicians just like you embrace entrepreneurship so you can have the freedom to live life and practice medicine on your terms. I'm your host. There is a hidden pocket of money that exists in every single business that most entrepreneurs don't look at at all. Most entrepreneurs are concerned with bringing in new people, and so how do I get new people to work with me? How do I get new people to work with me? But it's so much harder to get new people and it's so much more expensive to get new people compared to having the people who already work with you continue to work with you, work with you in a higher capacity and invite other people to work with you. All right, and so we call that in the Entremet world second generation revenue. So your first generation revenue is revenue you get from new patients, new clients and all of that, and your second generation revenue is the revenue created from the people who already work with you. Okay, so this is a bucket that usually gets ignored and I will tell you, in our biggest quarter ever, biggest quarter ever, most of our revenue came from second generation revenue. Second generation it wasn't from the front door. So this is the deal I want to talk to you about what you need to do, the things that set the stage for second generation revenue, and these things I'm going to position a little differently, but you'll hear it as we go through it, because these are literally five ways. I'm going to give you five of them, five ways, that five. But these habits cost us money every, every single day, because what they do is they abort the whole process of your second generation revenue, which, if you're going to build a company that is sustainable, you're going to build a company that is very profitable. You grow a company that can scale You're going to need to master this second generation revenue thing. Okay, all right. So let's look at these things Now.

Speaker 1:

Before I get into that, I want to start with this because I know, I know how it is. We want to do a really great job as entrepreneurs, but this is the deal as we go through this. The goal is not perfection. So I'm not looking for you to look at this and score yourself and say I suck because I'm at 30% or 50% or whatever. That's not the issue at all. I want you to look at this like oh my goodness, look at all the opportunity I have, all the opportunity I have to make my business better. So the more you listen to this even if you're like, oh, these are not things that I really focus on I want you to think of it in terms of wow, so if my business is already this way, if I focus on these things, what's going to happen to my business next? This is the way I want you to think about it. Okay, all right, so let's go in. All right. So, observation no judgment. Okay, this is a judgment-free zone. You're not to judge yourself at all. You're just to observe and make steps to correct things.

Speaker 1:

So, number one number one is a lack of integrity. Number one is a lack of integrity. It's a lack of integrity. What does integrity mean? It means you and your word are one in a simple way. That's my definition. Anyway, you and your word are one. What you say is what you do, right? Okay, what this does is it erodes trust. And remember why do people work with you? The know like and trust factor. And remember, why do people work with you? The know like and trust factor.

Speaker 1:

Every time we do something that is out of integrity, then people are like man, I don't know if I can trust this person. They don't do what they say. They told me this. They didn't do that. I don't know if I can trust them. Maybe I need to look for somebody else that I can trust. There goes your second generation revenue. Maybe I'm not going to refer to my friends, to them, because I don't know what experience they'll get. You see, the trust is going away, that your second generation revenue is going away. So lack of integrity is such an expensive business habit, it is such an expensive business practice and it's something we want to drop right away.

Speaker 1:

So, for instance, if you tell somebody that if you drop off this form so private practice somebody needs some kind of form done. You'll get it back in three days, then you want to keep your word. You want to keep your word. Okay, if you tell somebody that when you come into this arrangement, these are the things you get, you want to keep your word. People need to be able to set a clock by the word you stated. Now are there times that things will happen and you can't keep your word? Yes, and you're going to communicate that.

Speaker 1:

But this should be the exception rather than the rule. There should be no frequency to this at all, rather, the role. There should be no frequency to this at all. Okay. So, for instance, people come into the EntreMD Business School and they know they get a mentoring call every Wednesday at 7 pm. They can set their clocks by it, because 7 pm we will be there, live, doing what we said that we were going to do.

Speaker 1:

Right, when they show up for our in-person events, I tell them this is going to be the best one you've ever had. And when they look, they will see all the effort we put into it to up-level the experience, to up-level the content, to up-level the wins we can create. They can feel it, they can sense it. They know, right, they know what is that? It's integrity, right? So you want your word, right when you're promoting your word, when you're telling people this is what they'll get your word and your do to be the same. The more it's the same, the more people know, like and trust you. The more they trust you, the more they'll work with you. The more they'll continue to work with you, the more they'll invite other people to work with you, which is a win-win-win for your business Like, win-win-win-win-win, okay. So I want you to think about it right in this moment. Where is an area where we act out of integrity? Remember no judgment, just observe and say, oh, that's an opportunity to make stuff better and make our no like and trust factor better and make our second generation revenue better, okay, okay.

Speaker 1:

The second thing is a lack of basic customer service. Okay, basic customer service. Now, I bring this up because you know, after you've worked on your business for a while, you start seeing your business as the construction site it is. You're working on the processes, you're working on the systems, you're working to make things better. Maybe you know one of the things we did in my private practice we're really big on how can we make our turnaround times an hour less, right? So you know, things are happening in a timely manner and all of those things. But you can work on that Say, for instance, building your turnaround times to be an hour less, so much so that you're so focused on the process that you forget about the customer experience. We have to be thinking about both things, so the process makes it.

Speaker 1:

It's a win in the sense that, okay, if we work on our times, the times are better, but if you take away all the warmth and friendliness and all of that, then the experience is still not. Yeah, they got out on time, but the experience is not a good experience, right? So basic, basic customer service. And you're like why are you talking about this? Because it's basic and it's human nature to forget the basics, right? So things that are as simple as smiling when you look at people and you're talking to them, addressing them by name, when you look at them and you're talking to them, addressing them by name. When you look at them and you're talking to them, complimenting people not making it up, but actually complimenting them If you're a coach and stuff like your onboarding experience. What is that? What are the touch points and all of those things? Again, no judgment, just observation. How can I make this better? How can I make it a better customer experience Because, again, the better the experience is, the more they will say yes to working with you, the more they will continue to work with you, the more they invite others to work with you because they know you will take care of them.

Speaker 1:

Basic customer service being in communication, right? Basic customer service, okay. Number three. Number three is errors. Now are you going to make errors in your business, absolutely. When are you going to outgrow them? Maybe never, right, but at least we can make new errors, right? Or we can make very infrequent errors, like rare errors, right? Okay. So this is a deal, right? So let's look at private practice. So you send out the wrong prescription, right? You send out the wrong prescription, you mix up the appointments, you upload somebody else's information to another person's charts these kind of errors they scream don't trust me, we're disorganized, we don't know what we're doing, we can't get the job done, we're not competent and you don't want to say any of those things and you don't want to communicate those things, right? So this is a good opportunity to stop, because this is the deal.

Speaker 1:

I always use the iPhone as an example. Apple has never tried to make a perfect phone and I don't try to have a perfect business. I try to have an excellent business, which means I'm doing the absolute best with the stage of business I'm in. And I try to have a better business, which means that this month we're better than we were last month and next month we're going to be better than we are this month. Perfection is not something you attain. Okay, you perfect, verb, you continue to perfect, but you don't achieve perfection.

Speaker 1:

Okay, so are there going to be errors? Yes, but this is the way I approach it. I would often, you know, pull out like door to door what is the experience of the people in my private practice? And I say, okay, where are we having errors? Where are we having longer wait times? Where are we having bottlenecks? Where are we having all of those? And then we pick the biggest one, the one that will give us the biggest bang for our buck if we fix. And then we fix that, knowing that next time we're going to look and we're going to see something else and we fix that. But the thing is, you want to be in a position where your goal is you're continually getting better. Your goal is to continually get better and you keep pushing it and keep pushing it, and you keep pushing it because you don't want those errors to be there. And when there are errors, one of the best things we can do is communicate and say, hey, we were supposed to do this, we didn't quite get to it, this is what we've done to fix it.

Speaker 1:

And people are usually very sympathetic towards errors that are made by companies when we own up to them, right towards errors that are made by companies when we own up to them. Right. But you want to look at those errors, right? You're a coach, you had a call that was scheduled and you didn't show up for the call the first time. It's like, oh, my goodness, what happened? And there's communication, that's okay. But then again and again and again, what you're telling people is don't work with me and whatever you do, do not send your friends to me, and it's so expensive, okay.

Speaker 1:

Let me give you an example. Let's say let's use a coach here. So let's say that you're a coach and you work with people and you have a $10,000 package Okay. So let's say you have a $10,000 package and you have 10 clients and you make a lot of errors Okay. So there are a lot of errors and what ends up happening is, when it was time to renew, three people renewed. Seven didn't. Okay. So I want you to think about that. That's $70,000, that's gone, okay. And of the seven that left, they had the potential to bring you one client each. So that's another 70,000, that's gone.

Speaker 1:

Of the three that stayed, they love what you do, but they're like, but there are errors and it's not quite together and all that stuff. So, even though they've stayed on to work with you, they're not referring anybody to you. So that's another. And they could have given you one person each. That's another $30,000. So 70,000 plus 70,000 is 140,000 plus another 30,000, that's 170,000. So, just because of the errors that have not been caught and fixed and corrected and all of those things, because you don't have a goal of getting better, so it's the same things happening over and over again you lost $170,000 without knowing it, and it would have been much easier $170,000 than bringing in 17 new clients, because these are people who've already worked with you and they work with you again. Or these people have worked with you and they tell their friends about you, who are more likely to say yes because they are their friends. So do you see how expensive, that is Okay. Now does this mean woe is me? No, remember, we're observing and so you're like what are the errors that come up a lot? What system can I put in place? What automation can I put in place? What framework can I put in place so this becomes a historical fact? Okay, all right. So that's that one right.

Speaker 1:

It could be like your private practice and you have a referral source and in sending back documentation, the errors or the patients keep coming back to them and say you know they messed up my appointment and you know they told me my appointment was at one, I went there at one. They're like no, it was, it was three o'clock, so I had to wait two hours. And they keep saying that. And after the person hears the fifth or sixth or seventh one, they're like man, I'm not referring to them anymore. If they sent you five patients a month and the annual value of a patient say they came to you four times, so let's make it easy, let's say it's $500. Then all of a sudden they're sending you five patients a month, then that means that $2,500 a month is just gone. It's gone, right. So it's expensive, right, all right.

Speaker 1:

Fourth business practice is poor packaging. Poor packaging can look like office is dirty, office looks disorganized, there's papers everywhere, you know the team. There's no process in place. So when you walk in the door you know like the waiting room looks kind of weird, all of those kinds of things. Or if you're a coach and things like that, it could be like whatever your assets are when you onboard people, what those materials look like and all of that.

Speaker 1:

It's packaging right, and you might say but the product is good. But here's the deal. If you look in nature, our fruits are like water, vitamins, all of those kinds of things, that's what they have in them. But if they're just water, vitamins, all of those kinds of things, that's what they have in them. But if they're just water and vitamins, we won't want to eat them. You know what I mean. Like we won't want to eat them. But they're beautiful. Like, look at the orange, look at the apple, look at the grapes, look at the strawberries and all of that. All that variety, all that creativity, all that packaging is to make something that's already good really, really desirable. And that's what we do with our businesses as well.

Speaker 1:

Am I saying empty the bank and do what for your stage of business you can't do. No, remember, we talk about excellence here. Excellence is doing the best with what you have now. So, with what you have now, what is the best version of it you can create right? So poor packaging, so location, resources, all those things. Think about that.

Speaker 1:

And then the fifth one. The fifth one is a long response time. A long response time. So think about it this way how long does it take to answer your phones? How long does it take for you know, like you know, paperwork that was turned in to be filled out and returned back? How long does it take for an email that you know somebody sends you know, to be responded to? How long does it take? Now, if you run a big business, chances are there are places where it's long and places where it's short, and again, there's no judgment. You go like, okay, which is the next one I can fix? Which is the next one I can fix? So this is amazing.

Speaker 1:

We had a physical therapist who sent us a bunch of kids and they will send us, you know, like things that they needed signed all through the week and all these kinds of things, and they'll call back and say the thing wasn't sent and all of that and we know what it is right. That's creating a whole other level of dissatisfaction. And they sent us you know, we sent them a lot of kids, and they sent us kids too. And so we said you know what? How about we do it this way Every Wednesday? Send your person over, because they were literally a five minute walk from us. Send your person over with all the things you need signed. We've blocked off the space in a doctor's calendar. We'll sit down, get everything done and give it right back to you. And so that's what we did. Guess what happens to the satisfaction through the roof and all those things.

Speaker 1:

It's a simple example of something you can do, right? So you want to think in those kinds of terms that, what can I do? Sometimes it's an automation, sometimes it's just a simple system that you have to put in place. And then it fixed something that used to be a problem Our phones. There was a time we were getting 3,000 calls a month. I'm like, golly, like. Even Delta tells people, like you know, the next available agent will be with you in two hours, right? So I knew staffing the phones was not necessarily going to be the only answer, because even if I put four people on the phones.

Speaker 1:

People still call and people still wait, and so we had to then go in and say okay, what are they calling for? What are the top reasons they're calling for? They're calling for appointments. They're calling because there's paperwork that they want done. They're calling because they want to know when their next appointment is. They're calling things like that. And so we were like you know, they're calling because they had questions about our ear piercing service. I was like this is wonderful. And so what we did is we took all the questions they would ask about the ear piercing. We made that into a frequently asked questions on the website. Those calls disappeared For the appointments we made it possible.

Speaker 1:

For we made a new thing where send us a portal message. We have somebody manning the portal and we will get you in. Because we did have somebody manning the portal, right, and it was so much faster to do it that way than to get to the phones for everybody, and so we did it that way. So a lot of those phone calls disappeared. We did this whole campaign to have everybody up on the portal. So they stopped calling us to say when is my next appointment, because they can just look in the portal and find it for themselves, right? And then we said, okay, what do we need to do? So when people send us documents they need signed or filled out or whatever, they don't have to call us back Again. It came back to the portal and so we get it and we're like awesome, it will be in your portal within 72 hours or whatever the timeline was for that particular thing. And so our phone volume dropped significantly and the people who chose to call anyway understood that we had a faster way of doing this, but they were just like I'll wait anyway. So they were okay waiting because they were going to wait.

Speaker 1:

Do you see how you can do that? And then now your response times are so much better. People know I can trust you better and it leads to more people saying yes to working with you, more people continue to work with you and more people referring their friends to you. So these five habits, they are so expensive, these five practices, they are so expensive that I want to invite you to make a commitment to end them immediately. Now, when I say end them immediately, it's a process and you're never going to outgrow it. You're going to keep doing it. Okay, you're going to keep working on it because they're going to be new problems. This is just the way entrepreneurship is. If you understand that this is a marathon of solving problems, you will enjoy your journey.

Speaker 1:

Okay, so what are those practices? Number one lack of integrity. We're going to stop that. We're going to think about what we say and we're going to do what we say. Number two lack of basic customer service. We're going to go back, we're going to experience our products for ourselves and go like what could I make better, what could be more pleasant to the person who's on the other side of this? What could make it a better experience? And that doesn't mean pulling out all the bells and whistles. Sometimes it's very simple things, very simple things, things you probably used to do before, in the beginning of your business. As your business started growing, you stopped doing them, okay.

Speaker 1:

Number three errors. We're going to look what are the top three errors that are happening here with any kind of frequency and we're like, okay, what do we need to do so we stop making those errors? Four poor packaging. We want to take a look and remember excellence over perfection, doing the best with what we have. Like how can we raise the positioning of our offering. How can we raise the position of our practice? By up-leveling our packaging. Okay, number five long response time. Where do we have long response times? What can we do? What can we? Do you run an audit? What can we do to make it better?

Speaker 1:

If you will do these five things, fix these five things what will happen is you put yourself in a position where people know you more, like you more, trust you more, and the real magic, the compounding magic of second generation revenue, will start happening in your business. Because what will happen is people who work with you will continue to work with you. They will continue to work with you at higher capacity, as you make it available, and they will continue to tell their friends and family about you. And you would have so many new people coming in and so many people staying that your business becomes so much more sustainable coming in and so many people staying that your business becomes so much more sustainable, so much more profitable, and the pressure to constantly be on the grind to get new people in is reduced. That doesn't mean you don't work to get new people. The second you decide I no longer want to get new people, the business begins to die. But now the revenue is not only coming from the new people, it's coming from your second generation resources as well.

Speaker 1:

Okay, all right, so go apply this. You can meet with your team and listen to this together and figure out how you're going to implement it, but I tell you this it will dramatically change the profitability of your business, the sustainability of your business, and it'll make it a much lighter lift, and I can't wait to hear all about it. So go do it. So go do it. Share this with another doctor in your world, and I'll see you on the next episode of the Entrepreneur Podcast.