- 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.”