If you’re running a profitable business, that means you have money left in your practice after you have paid all your expenses. That also means you have a choice: You can either take home some of that money and put it in the markets or you could reinvest that money into your business.

Being that the markets are unpredictable, let’s focus our example on the power of those dollars in your practice. First, we’re going to need to know a few metrics: 

• Average Number of new patients per month (to give us a baseline)
• Acquisition Cost per New Patient
• Average Revenue per Patient

We will use sample numbers, but I encourage you to get familiar with each of these KPIs in your practice if you're not already. 

Let’s say you have $50,000 in your practice that you're willing to spend. And we’re going to throw it all in to marketing to buy you new patients. 

The average acquisition cost per new patient should be about $120. 

If your number is significantly higher or lower than that, it may mean your marketing isn’t very effective, or that you aren’t marketing enough. 

$50,000 in marketing spend divided by $120 per new patient will get you about 416 new patients. 

The average revenue per new patient is about $1,800 to $2,000. 

416 patients multiplied by $2,000 is $832,000. That is $832,000 of new revenue, and you spent $50,000 to get it. 

Now of course that isn’t all profit, and you shouldn’t ever suck ALL the cash out of your business, so let’s just say you have a 20% take-home margin on that new revenue. That means, with spending only $50,000 (that is TAX DEDUCTIBLE by the way) you generated $166,400 dollars of income for yourself. 

That’s a rate of return of over 300%. Your business is a better bet than wall street. If that weren’t the case, DSOs would not exist. 

So where are you going to put your money now?