All the Cash You Cannot See

I like to think of myself generally as a pretty brave person. I’ve climbed to the top of mountains other people have died attempting. I’ve many times gone SCUBA diving with sharks that have been known to attack and kill people – with no cage. I have launched myself into space hanging from nothing but a large sheet of ripstop nylon and sitting in a glorified lawn chair. I once told my mom I thought her meatloaf was pretty dry.

You may disagree and think these things don’t represent bravery but rather stupidity. You may be right. I faced fears and powered through and did these things anyway, so I’m going to call them brave, but you may also have a point.

There is a particular issue though where I would agree I’m probably just being stupid by not facing my fears and powering through and that is about getting a colonoscopy. Unfortunately, I’ve reached the age where it’s recommended to have one. Actually, I reached that age a few years back but I have been avoiding it. Intellectually, I perfectly understand the reason to get one and the benefits. But my lizard brain keeps saying nope, I’m not laying down for that.

I know many people who would do none of the things in my “brave” list who have still had the courage to get their colonoscopy done and in a few cases, it has even led to significant findings and potentially life-saving preventative care. So you’d think I would just get on board already.

But as I recently heard on a podcast, I am not alone here. The story was about a doctor whose practice specialized in performing this procedure and it had grown quite large with over 15 doctors on staff and doing over $10M in annual revenue. The business challenge this doctor faced was how to continue to grow the practice further but as it turns out this was not really where he should have been looking.

In order to get a colonoscopy done, the owner doctor needed to reserve a room, two nurses, an anesthesiologist, and the doctor performing the actual procedure, whether himself or one of his staff docs. They also needed to send the patient a supply of pre-procedure meds and do a good amount of paperwork.

The problem was, only 60% of patients with a scheduled procedure actually showed up. My people!

Well, actually, I am respectful enough to not even have ever scheduled one, because I do recognize the high cost to the practice of getting everyone ready only to fail to show. But a lot of people chicken out (to be fair, I’m sure there are some legit cancellations) after they’ve gotten far enough along that the doctor has to commit but before things actually get done and become billable.

Here’s the problem – the doctor and his team were focused on trying to grow sales and assuming the path to more revenue was more leads, more appointments, and more completed procedures. They were focused on what they could see – the top line, profit, and the costs they had. But they weren’t looking at what wasn’t there – all the revenue from the procedures they never did!

The solution to growth for the doctor was as much in getting that cancellation rate down as it was in anything else. He was already spending nearly as much in expenses on procedures not performed as he was from ones he did. He just wasn’t getting the revenue. Figuring out how to reduce the cancellation rate would be the single most lucrative thing he could do to help his business grow.

So how do you figure out what you are missing in your business that you can’t see just by looking at your existing revenue and profit numbers? Just make a list of all the places you aren’t performing as well as you could:

  • Leads that didn’t convert to sales calls
  • Sales calls that didn’t convert to sales
  • Customers who bought but didn’t spend as much as your top-spending customers
  • Services you could offer but don’t
  • Products you could sell but don’t offer
  • Upsells or cross-sells you didn’t make
  • Premium pricing you didn’t charge
  • Partnerships you’d like to add but didn’t land

Of course, what this looks like in practice depends on the kind of business you have, but every business is going to have some version of some of the above if not nearly all. For example, suppose I was talking about an auto repair place. I’d look at:

  • How many times did the phone ring we didn’t answer (a shocking lot for so many small businesses!)
  • How many calls did we answer where we didn’t get the potential customer to come in (why not and how do we improve that)
  • How often did the customer take the cheapest fix versus the best fix (how do we do a better job of improving that)
  • How often did they just get basic service when we could have offered more (tune-up, oil change, brakes, tires, detailing, etc)
  • Did we offer a warranty or schedule a return visit (why not)
  • Did we offer a premium version of the product (basic brake pads or high heat long life pads)
  • What about partnering with the muffler place, transmission place, used car dealer, etc. for more referrals and leads for complimentary services?

If you just look at the sales and the profit and both look OK then most business owners think the single path to growth from there is just getting more customers. And it can be that.

But chances are there is also a ton of added sales and profit you can’t see because you currently aren’t getting it out of what you already have.

Take a look at your business, make a list, and then prioritize adding those things from easiest to add to hardest. You could be improving your business significantly before the weekend even hits if you get on this today.

Now if you’ll excuse me, I have an appointment to go put off for another year! 😊

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