Can healthcare business owners save cash with consultants?
Healthcare entrepreneurs may want to keep close counsel – and keep outside experts at arm’s length – but they do so at their own financial peril.
That’s the conclusion of a new study by the University of Cincinnati’s Jeremy Woods, a doctoral student at the university’s school of business. Woods dug deep into the Panel Study of Entrepreneurial Dynamics, a national questionnaire of 1,200 startup business owners across the United States, to back up his data.
Woods, a small business owner himself (he once owned a licensing business in the music and entertainment industry), says today’s entrepreneurs are increasingly embracing Albert Einstein’s definition of insanity – doing the same thing over and over again, but expecting a different result.
Entrepreneurs, Woods claims, often make bad decisions (particularly financial ones) but stubbornly refuse to admit their analysis was off base. Eventually, the bad decision catches up with the owner (and his or her company), and can cause significant damage to the business.
Pride, Woods concludes, comes well ahead of the fall in such situations – situations he believes are easily avoidable.
“Small business owners continue to pursue failing ventures simply to prove that they were right,” says Woods, “We’ve all had the ‘I’m going to make this work’ feeling, but sometimes the best decision is to walk away – an action that doesn’t come easy for driven and determined entrepreneurs.”
Woods says he has a good answer for healthcare entrepreneurs who want to avoid such a fate – get good feedback from reputable outside advisors.
“Consultation with outside advisors can bring more information and fresh perspectives into the decision-making process and convince business owners to pursue alternative options,” says Woods.
Woods isn’t as clear on the subject of entrepreneurs actually paying professional consultants for good business advice (after all, respected colleagues could mean a former business school professor or a fellow healthcare business owner). But a decent healthcare consultant doesn’t come cheap – the best ones earn up to $174,000 annually.
Either way, the advice is sound. If you’re about to make a big business decision, hold that thought, pick up the phone, and run that thought by a trusted advisor.
To paraphrase that old Fram oil filter commercial, you can pay a little for that advice now, or go it alone and really pay for it later.