What is an Economic Recession?
According to Ivestopedia.com, a recession is a significant, widespread, and prolonged downturn in economic activity. Because recessions often last six months or more, one popular rule of thumb is that two consecutive quarters of decline in a country’s Gross Domestic Product (GDP) constitute a recession.
Some factors for a recession include:
- Falling interest rates
- Rises in bankruptcies, defaults, foreclosures
- Falling assets and dip in stock market
- Reduced wages and rising in unemployment
- Reduced consumer spending and confidence
We are in for potentially the biggest recession of our lifetimes and it’s not if it will affect you, but how you can prepare for it. Here is the CEO of You® Formula that you can use to recession proof your practice.
1. Adopt a Winning Mindset
The greatest challenge you will face in any crisis is not the crisis itself, but your fears about potential catastrophic outcomes. Fear is a powerful emotion, it tells us something is amiss. But due to it’s absolute lack of logic, it can create more catastrophe than the actual crisis.
When you are facing a crisis, take a minute to honor the fear, write about it if so inspired, and question it. Ask yourself what you are really afraid of, look at what the fear is telling you. Feel it in every sense of your body. Be friendly with it. See where it resides. Honor it. Thank it for informing you of potential dangers, then release it. Don’t let it take hold of you. Feel it exit. Wish it well on its way out. And get yourself back to a positive emotional state.
Take some time and review the pillars of a winning mindset listed below to position yourself with the clarity you need to create a winning strategy.
- Identify your core beliefs
- Identify your core values
- Review your mission, vision & purpose
2. Create a Winning Strategy
If there’s anything we’ve learned in the last two years, it’s the importance of adaptability. Change is inevitable, so the ability to pivot and be flexible is key to surviving any recession.
Now, more than ever you need to be flexible with your success strategy. The services or products that worked before may be obsolete in this season. You’ve got to be willing to try everything you can, see what works, and pivot accordingly.
Work as hard as you can is not a strategy. You must understand key issues at your practice like your fixed expenses, cash flow, projected earnings, and the options available to manage them. Use the pillars of a winning strategy listed below to help you pivot:
- Leadership – Perhaps the most essential element of crisis leadership is clear and trustworthy communication. Best practices for crisis communication, established through years of psychological and organizational research, include transparency, honesty and empathy.
- Look into the Administration of your practice. When earnings are restricted by market conditions, it’s more important than ever to keep more of every dollar you earn. Identify areas of loss or leakage in your practice, such as those due to billing and coding, collections, and reducible expenses, and act on them.
- Consider temporarily holding on any significant purchases or capital outlay that won’t produce income or significant long-term savings. If such purchases are necessary, think about how and if any such investment is protected. Having cash reserves available to help sustain key fixed expenses is key to the survival of many practices during a recession. Know how long you would be able to meet your current business and personal overhead if your cash flow was suddenly stopped or significantly decreased.
- Your Administrative department should manage five key areas of your practice, but in crisis the 3 listed below are most crucial to the success of your strategy.
- Metrics, KPI’s and Benchmarking
- Business Protection
- Human Resources and Payroll
The term Operations describes the processes and resources that you use to produce the highest quality products and services as efficiently as possible. A Standard Operating Procedure (SOP) manual is the guiding document for the systems of your practice. Be sure to review and update your SOP manual with new policies and procedures that will help you pivot.
Promotions – Your practice is a business and as such, it is in a competitive space, and your market position and growth need to be protected like your cashflow. In crisis, don’t stop marketing your business. Instead, think of ways to make it easy for patients and other providers to find you and work with you. Your Optometry practice is a service business that needs to compete on the best service, value, and care. If you have build a great reputation for quality care, now is the time to leverage that fact in your marketing.
- Sales – Review the balance of high and low profit services your practice provides and look at new revenue opportunities and potential practice areas. Consider making your premium package your new economy package. This will automatically increase your revenue per patient and if priced right, will also give you a generous margin.
3. Assemble a Winning Team
A winning team is indispensable, especially in times of crisis. According to the CEO of You® formula, your team will comprise of professional advisors/mentors, employees, and vendors.
Professional advisors will navigate your success plan with you while helping you avoid the common mistakes people make during times of uncertainty. Your employees should have a clear understanding of your MVP and help you look for ways to increase efficiency and revenue daily. Don’t forget to enlist the help of your industry vendors. They are a valuable part of your winning team and can bring invaluable insight and support.
Your team will determine the quality of your success. An outstanding team will give outstanding performance and success, a mediocre team will give a mediocre results. Now, more than ever, you need to do an audit of your team and get rid of dead weight so you can navigate change successfully.
We may potentially be on the verge of the biggest recession of our lifetimes, but you don’t have to panic. You can thrive in any season if you have the right formula. The CEO of You® Formula I described above, will help you recession proof your practice.
If you would like help to implement this formula, become a CEO Diva and join other women ODs like yourself who are using this formula to create the freedom to live life on their own terms. Click HERE to join. If you are an Elite Diva, you can start by joining us in our upcoming masterclass on this topic. Click on the event image below to RSVP.
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We are in for potentially the biggest recession of our lifetimes and it’s not if it will affect you, but how you can prepare for it. This masterclass will review the CEO of You® Formula that you can use to recession proof your practice. This masterclass is for Elite Divas only. Please log into your account to RSVP.