Startup urgent care success relies on not running out of money.
Someone once said, “The number one reason that startup businesses fail is that they run out of money.” It sounds profound, but running out of available capital is not actually a “reason” that startup urgent care centers fail. This is akin to saying that the number one reason teams lose baseball games is that they score less runs than the opponent. The real reason for losing baseball games are failure to execute a successful game plan. In the same way, running out of available capital is not a cause; it is the end result and positive proof of failure.
There are multiple reasons that urgent care centers fail, and you can click here to read some startup urgent care reasons for failure.
One reason for failure in a startup urgent care is a failure to monitor just how rapidly you are approaching and how close the urgent care center is to running out of cash. You can do this by making sure that your monitor and control the burn rate of your startup urgent care center. Jeff and Rich Sloan of StartupNation.com recently wrote an article entitled, “Controlling Your Startup Business ‘Burn Rate.’”
The ideas are particularly apropos for the startup urgent care. If you are involved in a startup urgent care you might want to review these ideas to see if they might benefit your startup.
- Carefully monitor your startup burn rate: Every month you want to calculate how much startup cash your urgent care center has burned. Analyze how much of your total investment capital has been burned. Make sure that you are not in danger of running out of capital. If you see that you are in danger of running out of capital, you will want to arrange for additional capital.
- Calculate the burn rate for your startup urgent care: Make sure that you are not suddenly surprised that you have run out of available capital. For example if your center has $500,000 of available capital, has lost a total of $400,000, and after one year is losing an average of $10,000 per month–you are only ten months away from running out of capital. But with your current growth rate and controlling your expenses, you should reach profitability before running out of capital.
- Keep your expenses in check: The burn rate for your urgent care center has two components: cash deposits and expenses. Obviously, you have much more direct control over the expenses than you have over the cash deposits. About expense monitoring, Jeff and Rich Sloan say, “You should be ruthless about it, particularly in the early going. Monitor expenses every day.”
- Watch out for the big startup cash outlays: They say, “Spend your precious cash on what’s critical to producing revenue for your startup business.” You will want to avoid purchasing lab equipment for CBC and CMP, expensive artwork, and plush furniture for your urgent care center. Instead, your capital outlays should be for critical components of your startup urgent care, including x-ray equipment, billing and charting software, signage, and advertising.
The Sloans conclude: “Controlling your burn rate can give you the confidence and resources to ramp up your startup business the way you want. Squeezing expenses in that new business is the best way to do it. If you don’t, you’ll learn just how unforgiving the marketplace can be.”