Inventory is the second highest cost area of most practices. If it's managed well, it is can be an engine for your practice by helping you to practice quality medicine. If it's not managed well, it will bleed profits from your practice and decrease its value significantly.
In healthier practices, inventory (plus lab and radiology) should be approximately 15%-20% of revenue. If it's higher than that, you should take action to implement sound inventory management practices and reduce its cost as soon as possible. Remember, every percent of revenue that inventory consumes is one percent less profit you lose. And this decrease in profit reduces practice value by 5X to 6X the reduced profitability. Excess inventory is an anchor.
Raise your anchor today. Reduce your inventory costs today.
