Determine a goal return on investment (ROI) factor for your marketing efforts.“Remember, this number will be ‘real growth,’ which is harder to achieve than the ‘natural growth’ you have been experiencing until now.” The result will be your incremental collections goal. Establish a collections goal, “taking into account your capacity, willingness to add capacity if necessary, your lifestyle goals, etc.”.“Remember,” the author advises, “This number should be conservative, and only collections will count.” This makes the assumption of no additional marketing-and really, nothing new at all. Determine your conservative 12-month collection trend, or predicted revenue.Route #2: ObjectiveĪccording to, determining budgets based on percentages is paradoxical: “How much I spend depends on how much I make… which depends on how much I spend… which depends on how much I make.” So they recommend calculating your marketing budget based on objectives. To see Deutsch’s logic for these calculations, check out his full post here. If your current efforts are working (i.e., producing a positive ROI), consider ramping up your marketing spending to further augment your ROI.Add 2% if you are “losing market share to another business in your area.”.Add 1% if you are “located in or near a major metropolitan area.”.Add 5% if you have “recently introduced new high-profit products/services such as aesthetics, concierge, diagnostics, or nutraceuticals.”.Add 2% if “you have any high-profit or cash-pay products/services.”.Subtract 2% if “you receive the majority of your patients through physician referrals.”.
He recommends starting with 5% and then adding or subtracting percentages as follows: On, John Deutsch takes that advice and tweaks it for private practice healthcare. This budget should be split between 1) brand development costs (which includes all the channels you use to promote your brand such as your website, blogs, sales collateral, etc.), and 2) the costs of promoting your business (campaigns, advertising, events, etc.),” Beesley said on SBA.gov. “As a general rule, small businesses with revenues less than $5 million should allocate 7-8 percent of their revenues to marketing. But as Caron Beesley explains in an article on SBA.gov, “.the allocation actually depends on several factors: the industry you’re in, the size of your business, and its growth stage.” However, challenges that notion, suggesting that private practices should calculate budgets based on objectives. Looking around online, you’ll see percentages ranging from two to twelve. Traditionally, businesses allocate a percentage of revenue-whether that’s actual or gross-to their marketing budget. Again, think in percentages and priorities. Figure out which marketing initiatives deserve your dollars. This where that aforementioned marketing plan comes in handy. 3.) Determine where you’ll spend your marketing dollars. As you’re considering how to divide your funds, do so in terms of percentages or order of importance rather than specific dollar amounts.
Where does your money need to go to achieve the desired result? For example, if your primary goal is attracting new direct access patients, then you know your marketing budget takes precedence over other items, such as acquiring new equipment or hiring a second front office employee. So, examine all aspects of your business as well as your goals to determine how you should divvy up your budget. Marketing is just one piece of the pie, and when you’re running a business, you can’t be singularly focused. Although income can vary significantly throughout the year, you must organize the information based on reliable revenue,” or the minimum amount your practices makes monthly. As Dave Lavinsky explains in this Forbes article, “You need to know how much money your company makes on a monthly basis and the variations that might exist. In order to properly budget, well, anything, you must first understand where you’re at financially. Here’s how: Budgeting Dollars 1.) Organize your finances. And I’m not talking about plucking a number out of thin air-even though, according to, “that’s precisely what about 80% of private practitioners and small business owners do.” To make your marketing dreams a successful reality, you must craft a detailed budget that’s appropriate for your practice and its goals. That’s where a budget-at least for the monetary portion-comes in. You may have some brilliant marketing ideas-and hopefully, a marketing plan-for your PT, OT, or SLP private practice, but it’s hard to bring them to fruition when you’re unsure about means and resources. A lot of small business owners approach their marketing efforts with a great deal of hesitation.