ATLANTA — Rob Benedetti, MBA, discussed ways for the O&P practitioner to exercise fiscal responsibility and create an entrepreneurial niche for their practice at the American Academy of Orthotists and Prosthetists Annual Meeting and Scientific Symposium, here.
He suggested that disciplined cash management entails that practitioners borrow only when absolutely necessary, pay off debt quickly, avoid too rapid expansion and build a cash reserve. He suggested a 4% cash reserve based on top-line revenue.
“At some point, the company could have a crisis. With small businesses, that could happen. You could get a health insurance renewal that is through the roof,” he explained of the need for a large cash reserve.
He advised not to borrow against business revenue or cash reserves for personal expenses.
“Don’t let your personal life intertwine with your corporate life,” he said.
Cutting costs is one way to create more revenue, Benedetti said. Another way is to decide what your company does well and use that to create a niche in the O&P community. Some ways to do this include:
- Determine who on your staff has unique or specialized skills;
- Determine if there is a market and potential customers for your niche in the community;
- Determine your business’ break-even point;
- Be willing to invest time to market your specialty niche;
- Visit referral sources;
- Offer educational seminars;
- Offer stock and bill option;
- Stay current with new products and technology;
- Partner with an orthopedic practice;
- Offer superlative customer service.
Growing your business and gaining market share in a mature market requires a sensitive approach, Benedetti said.
“You must understand what you’re good at, and then get better at it. Know your core competencies,” he said. “Don’t add new customers at the expense of losing loyal ones.”
He stressed the importance of respecting existing competition. Also, mature doesn’t mean meager, he said.
“Ask yourself if you’re doing all you can to leverage your existing footprint,” he said. “If you’re trying to get into a market and you have to carry more inventory, sometimes it doesn’t make sense,” he said.
Benedetti R. What’s in your wallet? Staying profitable in the world of O&P. Presented at the American Academy of Orthotists and Prosthetists Annual Meeting and Scientific Symposium. March 21-24. Atlanta.