The topic of "Overhead" can be a tricky one.
Certain big decisions - e.g. real estate - can have long-lasting financial impacts as can practice style and preferred staffing model.
Mature practices - particularly those inside of ~5 years until retirement - tend to drift into the glidepath of profit maximization mode.
This mode can include elements such as:
- refining the insurance strategy - i.e. shedding participation in lower reimbursement plans
- refining the staffing model - reducing the team down to a tenured core, no growth-related hires
- limiting marketing investments to drive new patient flow
- limiting new patients - in general or individuals with specific insurances
These are all proven methods to improve run-rate margins.
These are also proven methods to negatively impact the valuation of the practice from a buyer's perspective.
Said differently, the same choices that might generate that Nth dollar of profit are also likely to offset the health and growth prospects of the very same practice.
It can take a lot of curiosity and perseverance to identify the right balance - especially as you move through career phases!
Best,
Sean