It’s no secret why the old adage, “time flies” is so commonly used when another year has nearly gone by in a flash! As a business owner, you’re taxed at the beginning of every year with implementing new budgets and processes for the year ahead. Before you know it, tax prep is in full effect, and summer plans start to creep in. Once you’ve returned from a quick break (which some of us may not even get), school and businesses are back in action and that light at the end of the year is right around the corner. It all happens so quickly that many of us have little to no time to consider the things that will impact our businesses the most before the ball drops on December 31st. As such, we’ve put together a list of five things every medspa or medical practice should consider to close this year on a high note and kick-start your business on January 1st!
Consult with your Tax Advisor
While this seems like a no-brainer, many business owners tend to wait a little too long before they defer to the wisdom of their tax advisors. Options for saving money may come in the form of valuable tax write-offs like Bonus Depreciation or Section 179. Section 179 of the IRC (Internal Revenue Code) allows businesses to take an immediate deduction for business expenses related to depreciable assets such as equipment, vehicles, and software (think lasers and EHRs). This allows businesses to lower their current-year tax liability rather than capitalizing an asset and depreciating it over time in future tax years. If you’re considering adding new equipment to your practice, Section 179 may mean now is the time! Your Tax Advisor will know which options are best for you!
Prepare your Financials
Unless you’re an Accountant or finance major, the thought of end-of-year financials may make you cringe, but they can be invaluable in helping you be more proactive with your business! Start preparing your financials to better understand some key elements of your business, like what programs, products, or services worked and what didn’t. Take the opportunity to determine where your money has been coming from and what your cash flow looks like. Having clarity on these questions will help you determine what you can consider for next year’s budget, reasonably and responsibly!
Assess your Employees
How often do you do an employee review? Every quarter, six months, or maybe even annually? If you’re not taking a deeper dive into the mindset of your employees, how can you predict if they’re going to continue with you in the new year? The answer is, you can’t...and you shouldn’t have to (you should already know)! By taking an assessment of your employees before the end of the year, you can learn a lot about the health of your business. Review your turnover and attrition to see how long your employees are sticking around – this is a good indicator of their satisfaction levels. Discover who your top producers are and review how you reward them –a little incentive or recognition goes a long way. Ask yourself about the morale in your business and consider an event or holiday party that fosters a team environment. Happy, productive employees can make or break your business!
New Year Planning
If you’ve followed the list closely, you’ll realize that you’re fully prepared to tackle new year planning if you’ve made it past preparing your financials. This should be a breeze! After you’ve determined your cash flow, how you make your money, and what worked or didn’t this year, you should be able to build a strategy for your most profitable product/service mix in the new year. With this, you’ll need to consider marketing (another investment that will likely require cash flow planning) and whether you’ll need to take on debt to support it. This is also a good time to consider investments that might make sense this year, like capital equipment, or those that require more intensive consideration, like new office staff or medical providers.
Review your Purchasing (and Purchasing Power)
Many business owners know that once you’ve settled on purchasing from specific manufacturers or vendors, it can be difficult to change, especially since the cost sometimes outweighs the benefits. For a medical practice, something as simple as switching the needles or saline you purchase can impact your pricing, your support, and sometimes even your ability to access those items (especially if they’re on allocation). Regardless of whether you can or want to make these changes, it’s always beneficial to review your major cost centers on an annual basis. Start by looking at your cost of goods and determining what you purchase the most. Source other manufacturers and group purchasing organizations to access comparative pricing (most will want to view your purchases and provide you with a cost- analysis). Once you determine whether you can save, consider renegotiating with your existing manufacturer(s)! Keep in mind that some reps of major manufacturers have pricing autonomy based on volume and your location – use this to your advantage to cut costs and maximize your resources going into the new year! If you follow even one of these tips before year-end, you’ll be better prepared to tackle time before it flies away next year!