World-renowned leading expert in Myofascial Pain, Electrodiagnosis and the Co-Founder of Hands-On Companies.
The pandemic is an excellent example of how a crisis can quickly come out of nowhere, but sometimes problems come gradually — somewhat like climate change. In my case, back before I founded my company and was simply running my own physical therapy practice, a slow and yet fast calamity occurred between 2002 and 2004, which was the significant decrease in reimbursement in the physical therapy space. That is, Medicare started paying less and less for physical therapy, with reductions expanding from 20% to even 60% of what was paid prior to that time.
It hurt physical therapists across the country terribly. Average profit margins for many went from 20%, a healthy profit margin for a service-related industry, especially one in healthcare, to around 10%.
Now, I’ve rebounded, mostly due to starting a new way of treating patients that became the basis of my physical therapy franchise. But it was then that I learned a hard lesson — you have to plan for the unexpected. And if you can’t do that, you at least need to be able to readjust your business model as fast as possible.
So, if you’re looking for ways to prepare your business for unpleasant surprises, I have a few suggestions.
Make Flexibility Part Of Your Company Culture
Whether it’s a cash flow crunch, an important staff member quitting on you or a pandemic forcing you to adjust how you do business, you aren’t going to get very far if you aren’t willing to make dramatic or fast changes in your business model — and to sometimes take bold and calculated risks.
For instance, investing in your company in times of uncertainty may seem foolish, but it also may be the only way to save your business.
Most of being flexible, for a small-business owner, is a matter of mindset. If you’re a small business, by virtue of being small, you should have the nimbleness to make fast adjustments. But it helps if you — and your staff — have had discussions about making rapid changes to how you do things. If you ever hear somebody in your business say, “But that’s the way we’ve always done it,” you should banish those words from your office.
Make Innovation Part Of Your Company Culture Too
You can’t be flexible if you aren’t willing to try something new, and when the unexpected happens, that’s exactly what you need to do. You need to innovate. You need to try something different, something hopefully better than what you’ve been doing.
In my case, when government regulations threatened my practice. I put an emphasis on incorporating diagnostic testing in my private practice. As luck would have it, it’s a form of testing that actually yields far more accurate results for the patient, and the insurance companies tend to pay more for them. So I was able to find a win-win solution for my patients and my business. That’s what you want — a situation where you can improve the outcome for your patients or customers and advance your own business model, so you can keep helping the people you serve.
For any business, if something is going wrong — perhaps you aren’t finding enough clients or you have a cash flow crunch — there’s probably some solution. But you do have to be willing to try and find it. The changes you need to make may not involve investments in your infrastructure, or that may absolutely be what you need. It may simply be tweaking your training or changing your hours to give you more time with customers. Every business’s situation is going to be different. But, like flexibility, innovation needs to be part of your company’s DNA.
Create A Disaster Plan
It may not be practical to think of every emergency that you could possibly have and develop a contingency plan. But just as many schools now, unfortunately, conduct active shooter drills along with fire alarm drills, businesses would do well to pick three to five likely disasters that could conceivably happen and begin developing plans and having conversations about what should be done if any of them were to come to pass.
The pandemic may continue for a while yet, or another one could come. The economy could have problems down the road that affect your business. Maybe new government regulations will strangle your profits, or some new technology may threaten to make your business obsolete. It isn’t pleasant to consider, but taking the time to plan for the unexpected today could mean far fewer unpleasant surprises tomorrow.