Hiring revenue-generating providers is one the fastest ways to grow your practice, but how do you know when (or if) it is feasible to hire? Whether a candidate has appeared at your door, or if you cannot keep up with patient demand, there are things to consider before pulling the trigger. Here are a few questions you can ask yourself to see if your business has the bandwidth, and budget, to incorporate an additional provider.
Are my current providers fully maxed out?
Truthfully, you should not even consider bringing on a new provider until your existing providers are all full (or near full)! Now we are not saying you have to overwork your current staff to the point where you are desperate for some added help, but you will definitely need enough patients and work to support any new providers who come onboard.
A good way to tell if you are ready to consider hiring someone new is to check your schedule. Is your practice schedule fully booked out two or more weeks in advance? If so, this is a telling sign that your providers are maxed out, so you are ready to consider bringing on a new provider. If prospective patients need to wait three or four weeks to receive treatment, you have the demand necessary to justify a new provider. Ideally, you should be able to schedule new patients within one to two weeks, but anything more than that is a sign that you are ready to hire.
Ok so you’re ready to hire, but do I have enough working capital?
The rule of thumb is every new provider you bring onboard should strive to generate 2-3 x their annual salary (including bonuses) in production, but how long it takes them to reach that point is the elephant in the room.
From a budgeting perspective, you should plan to pay for at least 3 months of little-to-no production from a new provider before pulling the trigger on hiring. If your new provider will earn $100,000/year (including salary, bonuses, etc.), you should have at least $25,000 in excess cash (in addition to your monthly average overhead costs) to cover the cost of this new employee while they ramp up.
Now if the provider is really experienced, regularly generates above average revenue per hour, and/or is joining your practice with patients that are following suit, you can sometimes justify breaking this rule, but to be safe, we would really encourage you to consider the ‘three month rule’ for new hires.
If your practice is currently strapped for cash and cannot afford three months salary for this new employee, you might need to make room in your budget or work longer hours in order to save enough to hire someone new.
Are there other ways to grow revenue?
While bringing on new providers can certainly add a ton of revenue to your practice relatively quickly, there are still other options that might be more appropriate to consider first. For example, providing continuing education for your existing staff can be an effective way to improve efficiencies or increase case acceptance rates, so you earn more revenue from your existing patient base without bringing in anyone new. Likewise, extending office hours or asking existing employees to take on another day or two might be a feasible option for increasing revenue with the same team.
Is my practice ready for a new provider?
Last but not least, we want to consider your existing practice’s current culture and processes when determining whether or not to hire someone new.
If you recently went through a lot of changes and your team does not seem to be getting along with one another, this might be a tumultuous time that would not benefit from bringing in anyone new.
Likewise, if you are looking for a new provider but do not have the necessary patient rooms, equipment, etc. that the provider will need to provide their services, you are shooting yourself in the foot. Make sure you have the necessary inventory, equipment, space, and processes in place before hiring someone new to maximize their chance for success and help you recoup the investment in a new provider as quickly as possible.
Don’t forget, hiring a new provider will also require training and onboarding. This is going to take a good amount of time and effort on your team’s part to train this new employee, so making sure you have either cleared room in the schedule or brought in reinforcements to help during their onboarding will be key. We advise delegating onboarding tasks across team members to save you time, and to help them get better acquainted with the new hire. The goal is to get them up and running as soon as possible, and that means making sure your team, your office, and your new hire are set up for success.
If you’re wondering where to begin or need reassurance that you are ready to hire someone new, Maven can help set you up for success. While you focus on candidate applications or onboarding a new provider, we can ensure your finances are prepared for this new growth.
As experienced dental and aesthetic CFO providers, everyone at Maven has the tools to help you hit the ground running. Nothing makes us happier than seeing our clients grow their businesses! If you’re ready to expand your team, reach out to us at firstname.lastname@example.org.