There are few activities in managing your practice that will make you more money than adjusting fees. Every transaction involves your fees. If your fees are set at a level that undervalues or discounts your services, it is very difficult to make up for that undervaluation by seeing more patients.
For example, if your fees are undervalued by 10%, and your gross profit margin is 40%, then you will need to see 33% more in sales revenue in order to make the same profit. Yes, that is correct. You will have to see a third more patients, generate a third more revenue to make up for your fees being 10% lower than they should be.
Let's put numbers to this. If your revenues are $2 million per year, and your gross profit margin is 40%, and your fees are 10% lower than they should be (or you discount 10%), then you will need to generate $2,666,666 in revenues to earn the same profit you would with $2 million in revenue and fees set properly.
Don't suffer the effects of indiscriminate discounting or fees that are set too low. Review your fees today and set them at a level that earns the profits you establish as a goal for your practice.
