I had a very interesting conversation with a patient of mine recently. His name is Gary and he is a turnaround expert for a Fortune 100
company. Most large companies keep a roster of smaller companies that they may want to buy. It’s a growth and diversification strategy that allows them to easily acquire more customers and gain access to a related market niche. Nestle, Coke and Pepsi use this strategy to diversify their product offerings. American Airlines used it to buy Travelocity, to ensure their flights got preferential positioning in the online search for affordable travel. General Motors used it to acquire what is now GMAC, a company that offers auto financing, commercial credit lines and mortgages.
I asked Gary about how his team works to raise the revenue of companies by a factor of 5-10 times. He shared something that I believe is worth
repeating. He said most companies that bring in $1 million a year operate entirely differently than companies that bring in $10 million. And those companies act very differently from others that earn $50 million. Your company (or in this case your practice) matures to a certain level and then gets stuck. It can crank out $1 million a year but it can’t possibly generate $10 million. It can’t do that, unless someone with a big picture focus takes over and makes the moves necessary to grow the revenue.
Gary went on to say that lots of time growth is a simple matter of bringing in technical efficiencies, opening up new markets, and using
pre-existing strategic relationships to grow the newly acquired company. It’s easy for Gary but next to impossible for the people who grew the business from scratch. They can’t see it any different than where it is now. Gary doesn’t fall in love with the product or the people who make it, and he is unbiased to the results of new strategies undertaken. He is charged with one overall objective: grow the revenue. Very little else matters.
David Zahaluk, MD is a revenue enhancement specialist for doctors and the author of “The Ultimate Practice Building Book.”