Do You Have A War Chest of Cash? Lessons for Success
Dear past self,
In the last 4 years, I have had to help clients navigate through two absolutely massive events that were completely out of their hands and could have been detrimental to the point of going out of business. We never know when one of these events is going to happen but we can be certain that at some point it will happen. How do you and your business survive world changing events? Financial Preparation!
1. COVID 2020.
What a surreal experience that was? We heard about this from a distance for a while, we knew it was probably coming. But we were absolutely clueless on what it would bring. Chaos and panic. Complete shutdowns of society. “Essential Workers”. Inability to purchase supplies and products. Shortage of employees available. Inflation of nearly all business expenses.
Doctors were unable to perform surgeries. Our patient volumes absolutely tanked. Those were scary times! We had to learn a lot on the fly and be creative. And the reality is that some of the things that we needed done were too late. Those were things that should have been done before the event occurred in the first place.
2. The Hacking of Change Healthcare in February 2024.
They are a massive clearing house, the impact on businesses nationwide was profound and still is. Suddenly overnight we lost the ability to send claims out and to get paid. Our liabilities certainly didn’t go away, but revenue did. I have clients who are just now starting to see payments return to normal, it’s been 3 months! I have a new client who opened a brand-new clinic on April 1st of 2024. EDI agreements still can’t get setup in his PM software to get paid, and there are very few payers that we can get paid without those. And there is nothing we can do about it! Fortunately, we have a good team and we have been able to work with our clients to successfully navigate the chaos.
Prepare Prepare Prepare
Sometimes things happen that are within your businesses control, sometimes things happen that aren’t within your control. And it is your responsibility as owners and decision makers of a business to be prepared for those situations either way. To help you prep for these situations it helps to ask yourself these questions:
Does your business have enough cash in reserves to be able to survive if something like this occurs? Do you have an established line of credit to pull from in the event that it’s needed? Do you have processes and systems in place that would allow your business operations to continue and support your staff in the event something occurs again? Or do you maybe need to think of a new goal to start working towards today?
Win the War
These can be complicated situations to prepare for successfully. It often takes a financial professional who can help you to effectively grow your “War Chest of Cash” in a manner that is manageable for the business financially, can be agreed to by the various stakeholders within the business, and still puts that cash to good use. Just as the title says a “War Chest of Cash” is there for your business when things start to get bad. Having that money set aside to use in times of need is one of the only ways that you can truly protect yourself in the future.
As recent history has taught us, it is vital to have these conversations and be prepared to handle these types of incidents effectively. Planning now may determine whether or not your business survives the chaos that will eventually hit you. I encourage you to find someone to help you prepare for the these types of situations before it is too late.
Sincerely,
Future Self
This is the second article in the series titled Lessons for Success that are a collection of letters from our CEO Tyson Hatch. In his many years working in the healthcare industry he has learned a lot and these letters are some of the insights that he wished he could have received much earlier in his career. He hopes that as others are able to read the words he wishes he could tell his past self that they can benefit the same way that he knows that he would have. If you have questions of found this advice to be useful, contact us about how we can help your practice surpass its goals
