As we see the opening of businesses and return to the new normal what can we do to position ourselves for the future?
In these first few months, it is paramount to protect cash! The old adage of cash is king is certainly true in the current climate. Whilst nobody knows exactly what the future has to install for us we must be aware that the furlough scheme is coming to an end in October. For those of you who have clinics who have staff, we need to consider the impending cost this will have on our businesses and also the potential for a rise in unemployment which ultimately leads to less money for a patient in turn potentially fewer treatments purchased.
It is not all doom and gloom however this is a great time to niche and focus upon the delivery of treatments to that niche. Focus upon those people and treatment types that you can deliver cost-effectively and to the type of people less likely to be affected by the current changes. For example, I am a member of a private club and the majority of the membership is affluent and retired and has continued paying the subscriptions regardless.
What does your ideal client look like? Where do they hang out (what social media groups are they part of for example) what can you do to help and support them such as treatment plans, direct debits to spread costs whilst creating a cashflow for yourselves at the same time is a fantastic way of working together? Can you look to introduce some subscription type support package, eg monthly skin clinic for a small fee and secure the confidence in spending from your patients and clients?
Also remember that other businesses will be in similar positions, Look to approach these and discuss options of cross-promoting each other services, treatments, etc. Any area to focus upon is the safety side as well as demonstrate through any means possible that treatments can be delivered safely. People are still nervous in certain environments and it will take time for the confidence to return both from a financial spending point of view but also consider people’s reflections within lockdown and new spending habits. Many gym memberships have been canceled with a focus on home-based health activity.
Your financials and the management of these are going to be paramount in the coming months. As I mentioned previously Cash is king so wherever possible hold onto the money in the bank. Some immediate things to consider are your current spending as it is often far easier to save money therefore increasing your profit than to generate new turnover and increase profits that way. Take a look at your monthly outgoings and ask the question if it is vital to the operation of the business? Currently? For example, waiting rooms do you really need the magazine subscriptions for the waiting rooms that you patients cannot take advantage of? This is a small start and example but quite literally go through your whole business and strip away any unnecessary costs that you may have. The other end of the scale is do you actually need that space? Could you possibly move to smaller premises? Renegotiate the conditions of the lease / rental agreement that you have (if you don’t own your own premises) or even look to sublet some of the space out to complimentary service providers. All helping to either decrease your monthly spending or increase your income.
As a landlord myself it is far better for me to agree to work with my current tenant to help them through the current situation than to have a vacant property and be looking for new tenants in the upcoming times. So don’t be afraid to ask as they say you don’t get if you don’t ask!
The same can be said with your suppliers, is it possible to extend the payment window from say 30 to 60 days, etc. This may not be currently necessary however if you have already had the discussions in advance it will give you options for the future if needs be.
From my position as a clinic owner and Finance broker, I secure lending for many different peoples businesses across a number of different products. But the one constant is affordability the ability to demonstrate that you can afford to repay the loan, we have secured numerous finance packages throughout lockdown even with the position being that once you can demonstrate that the clinic is open again the funds can be released. The later element is in the regard that the lenders have to operate responsibly however it shows a clear desire for the lenders to lend. So going back to the cash is king scenario if you have assets that you are paying off it is always worth considering a discussion of refinancing these and extending the term to reduce your monthly outgoings, or alternatively if you have machines, assets, etc that you have cash tied up in speak with either me or another broker as to the option of lending against this asset and releasing cash capital that you have tied up.
The fundamental point to take away from this if you only take one single point is to communicate with those around you! Remember that your not the only one facing uncertainty and to discuss options with your suppliers, staff can open surprisingly new opportunities. Similarly, keep up a strong communication channel with your patients and clients. Let them know your open for business, safe to treat them and it’s a great time to try something new!