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Finding a successful business recipe

Finding the right recipe for the smooth and profitable running of your practice is crucial, says Dr John Couch

Finding the right recipe for the smooth and profitable running of your practice is crucial, says Dr John Couch

My dictionary has several definitions for the word recipe. I feel the most appropriate in a non-culinary sense is ‘a method to achieve a desired end'.

If you look at successful people, whether in business, writing or cooking, there is usually a clear pattern that such individuals follow. Hardly surprising; we all learn from success and failure and follow a recipe that works.

First, establish a protocol for analysing an aspect of your business. It needs to be an effective protocol. Efficiency will rank first. This will be followed closely by reliability and cost-effectiveness.

This week, I would like to look at just one aspect of practice to encourage you to analyse your recipe for success – telephone costs.

Capital costs – hardware and installation – will be an issue if you are replacing your current system. However, most practices will do this at a minimum of 10-year intervals.

Running costs subdivide into maintenance: line rental and call costs.

As I discussed in a recent article, it can be a false economy to sign up for the cheapest maintenance deal. My practice did just this and discovered that the breakdown service was substandard.

So line rental and calls are the obvious targets for cost savings.

Rather like the various providers of gas and electricity, the end product is identical with several competing companies and hence there is potential to save costs.

As well as hunting for good deals, think laterally. The cost of calls can be reduced by more efficient use. You could reduce calls back to patients and cut calls to mobile phones (by getting landline numbers with clear call-back times where possible). You could also police the personal calls your staff make more if this is a problem.

Study the figures. An average practice will spend around £800 per partner per annum on telephone costs. A practice with four partners achieving 10% cost reduction will save around £320. In this case it might be worth picking a member of staff and giving them allotted time to research the market. This may take around 10 hours of their time and cost around £100. Although this reduces the saving to £220 in the first year, or 7%, the saving becomes 10% in year two. Of course you will want to repeat the process after two to three years as the market changes.

You may question if this is worth the effort. But consider this. Expenditure accounts for around 50% of profits, or around £120,000 per GP partner. Imagine saving an average 5% net on all expenditure. This amounts to around £6,000 per partner per annum or £60,000 over 10 years. Most of us would be delighted to achieve this.

Your recipe may not be the same as mine. However, if it works it will become a firm favourite.

Dr John Couch is a GP in Ashford, Middlesex

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