What math are you using to figure out the relative value of your medical practice? If you are like most physicians you are probably using traditional methods to determine the value; i.e., revenue, profit and market conditions. If this is the type of math you are using it is fairly safe to assume that you are focusing on the number of patient encounters you have each month. This is fine if you are content with traditional valuing methods. After all, this method is consistent with the traditional sales approach. Generally speaking, the greater the number of sales, the greater your return on investment for that particular month, quarter or year.
But What if You Want More?
If you want more, then you will need to learn a new math. Focusing on brand development will make traditional valuation methods worthless. If you have created an online brand then you have likely carved out a niche within your particular practice area. Therefore, your total net value is worth far more than the number of patient encounters you have on any given day.
Presumably, at some point, you will want to sell your medical practice. The time to start planning for that day is now.
Have you Created a Brand for Your Medical Office?
Creating a brand requires a marketing strategy; however, once implemented you will find that your efforts have made your medical practice a valuable asset, one that cannot be measured by traditional valuation methods.
To determine whether you have successfully created a brand consider the following four questions:
- What does the market, your market, think about your medical practice?
- How, when and where is the market talking about you or your medical office?
- What is the experience the market has with your medical office?
- Is your brand dependent on you?
Keep in mind the fourth question is paramount. If your brand is dependent on you then you haven’t created residual value. Why? Because the value cannot be replicated by a new owner. So how do you create a brand in a medical practice that is not dependent on you, the physician? After all, you are the one who ultimately renders the services. The key is to develop systems.
An Online Marketing Strategy is Key to Increasing the Value of Your Medical Practice
If you are building your practice much the same way you would read a book or watch a movie, then you haven’t created systems; i.e., you have no idea of how the story will unfold. Meaning if you have no idea of how or when you will sell your practice then you are passively engaging in the practice of medicine without a real plan. You need to start creating your exit strategy now and it doesn’t matter whether you plan on retiring in 1 year, 5 years or 10 years. The key is to start developing your marketing strategy now.
If you create a brand that allows any physician or group to simply take over where you left off then you will have created a valuable asset. If you have incorporated online branding and reputation management then you will need to go beyond traditional accounting to recognize the full value of your medical practice.
Have you created systems to brand yourself? Have you created systems to measure your online efforts? If so, please share in the comments so our community can gain through your experiences.