Living thorough and surviving an economic sea change

LIVING THROUGH AND SURVIVING AN ECONOMIC SEA CHANGE

Sonya Nightingale MCSP ACPAT Cat A

The last eighteen months have been an extremely challenging time for many of us. The economic climate has battered our clients and they in turn have sought to reduce their costs and outgoings. This has an obvious consequence for us as service providers. In addition many insurance companies are looking ever more closely at how much and to whom they pay out; they have their own battles with falling revenue and tighter margins. With a dwindling pot of money the competition between practitioners sharpens and professionals will seek to protect their own income stream more fiercely.

Throwing your hands in the air and saying it’s not fair, or that you don’t like it will receive little or no sympathy, it is, after all, just change. As practitioners we have to manage and adapt to this change and seek new opportunities while consolidating old ones. Very few people enjoy change but we adapt and change or sink without trace!

It also helps to try and consider the problem from all angles, in other words put yourself in the purchaser’s shoes. Why should they choose an ACPAT physiotherapist? Why should they choose you? What makes you the obvious choice, and make sure that you can justify it! We are actually very fortunate in the current situation. Physiotherapy for animals is very much the trendy option at the moment. Owners are keen on it and vets and insurance companies are waking up to this. From the owners and insurance companies’ point of view it is also often seen as a slightly ‘cheaper’ option with a high quality outcome. However from the vets point of view it could be seen as a severe threat to their own income, with little real evidence to back it up and a confusing variety of practitioners. Many other sectors have already gone through many similar changes, accountants and lawyers are just two examples, private human physiotherapists are also facing similar challenges albeit without the confusion caused by lack of protection of title. It is no longer enough to put up your brass plaque and be good at what you do, although it helps, you must be astute, business minded and adaptable as well!

Business Fundamentals

Each practice is unique therefore no solution is universal. This means following some basic business fundamentals and adapting them to individual market forces. The basic fundamentals are:

Business Planning- creating a business plan and understanding how it works saves huge amounts of time and effort. The element of trial and error is greatly reduced so that a cost effective and efficient approach can be adopted.

Marketing- this is about understanding your customers and analysing them, not about slogans and pretty adverts. Why do they choose you, what motivates them, how far do they travel, why your business and not another. Equally what is the competition up to and why do people choose them? Analysing this data allows you to plan and devise intelligent marketing strategies individual to you. These can then be tested, modified and refined until they succeed.

Organisation development - you may not think of yourself as an organisation, but in business terms you are, albeit a small one. Organisations grow and develop in very predictable ways and often face the same very predictable challenges. This process can be taught and once understood makes adapting to market changes a much easier and less stressful process. This may include completely changing the way you work from being a small one man band to selling out to a large group practice. These changes can be good and bad for both sides but preparation reduces the chance of disaster.

Group Fundamentals

ACPAT as an organisation is your group or trade association. This gives some power but also has its limitations from a business point of view. As an organisation we can support each other, compare notes and aid training. However there are rules enshrined in law that prevent united group action to reduce competition.

Think about it from the other side, if businesses from a particular sector were allowed to unite and coordinate their actions to see off competition, then competition and therefore consumer choice would be restricted, innovation would reduce and prices would rise. Can you imagine what would happen to food prices if Tesco, Sainsbury’s and ASDA decided to work together until all the small chains folded? British Airways got into severe trouble a couple of years ago for trying to attempt price fixing with Virgin.

In the UK this legislation is known as the Competition Act. There is no way around it, however much we may wish it. As a group the power comes from education and information to allow members to become more entrepreneurial and not from trying to kill off the competition.

The Future?

Now that is the question! Of course no one really knows but here are some well informed guesses.

Well informed customers - both the clients themselves and ‘customers’ such as insurance companies and vets will become increasingly well informed about what we do. They will therefore feel much freer to scrutinise and challenge what we do. This will mean that as professionals we will need to listen carefully and be able to respond in an informed and articulate way.

The internet- this will develop as an ever more sophisticated tool for advertising and marketing but will also be a challenge as customers seek a more rewarding and informative service. For instance customers may demand a more interactive on line service, the ability to question you prior to parting with any money! Practitioners may use other promotions such as Yellow Pages to direct customers to their website and this may become the preferred way for customers to assess whether or not your practice is the one for them. Your web presence or lack of it, and its sophistication could seriously affect your turnover.

Information gathering- gathering data for your business and in the form of research for clinical work may become imperative. Business data will allow you to evaluate your performance in relation to your competitors and enable you to justify your approach/prices by ‘giving’ this to your customers. Research data will be used similarly to evaluate and justify your place in the market and the quality of service which you provide. ‘Giving’ this research information to customers enables you to show that you are up to date. ‘Getting’ this information may be dependent on the amount you ‘give’ to professional organisations. In an easy economic era with little competition it is easy to be apathetic but as the competition hots up ‘getting’ or achieving your aims may well only be possible by ‘giving’ information and participating.

Active professional involvement- ‘knowledge is power’ is an old adage but very applicable in a modern world. In a competitive market therefore organisations must guard their knowledge and release it with care. Therefore members of organisations who participate more and ‘give’ knowledge will have better access to knowledge in return. It will no longer be enough just to be a member and expect to be ‘given’ all information freely, especially when an organisation is run by volunteers. This would give the false impression that it is the organisations ‘job’ to deliver and the members ‘job’ to receive. Huge amounts of sector information runs through the committees who run professional organisations and access to this becomes an increasingly valuable resource. In the legal field they already have hotly contested elections to committee instead of arm twisting and ‘persuasion’. Also attendance at, and participation in, regional meetings should become an essential means of networking and gathering business information and data. Failure to regularly attend may well compromise knowledge and therefore business efficiency.

Conclusion

These are not easy times and they won’t get any easier in the short term, however there are huge opportunities for those who put the effort in. Enrolment on business courses will become more necessary and ACPAT are already in the process of setting these up. Physio First has also started an MSc in Private Practice, which has a huge business component, which may interest some of our members. Overall though the message is network, participate, join in, help and communicate. This will help you and your business to survive and thrive.

Acknowledgements: Many thanks to Eric Lewis MSc MCSP, whose article ‘Private Practitioner Market Place: living through a universal change’ In Touch Autumn Issue 2009 No. 128 was the inspiration for this, for his permission to use and adapt the original.