Putting all of your eggs into one basket

We were so busy that I never had time to look for new referral sources or the capacity to take on any more work”.

This was part of the conversation I recently had with one of my professional colleagues when we recently met for coffee. She had been having a tough time. Not only had she had a down-turn that many of us experienced during Covid lockdowns, but she had also lost work from her most important referrer.

There had been a change in personnel in the referring company after many years. The new manager had their own ideas and had their own preferred providers. Despite a history of excellent service and outcomes, the work dried up practically overnight. As I sat and listened to the impacts that this had on her team, her business and the deep feelings of injustice and hit to self-esteem, I heard that she had done everything within her ability to nurture a relationship with the new manager. There was little more that she could do other than put her situation down to the fickleness of the industry and to hope that when it does not work out well with other providers that they will come back.  

My colleague is now paddling madly like a new player in the market, looking for new referral sources. I am sure that if anyone is okay after experiencing a situation like this, it will be her. She has many years of experience, is empathetic and wise and is a good communicator. She has some great ideas, but it all understandably feels like very hard work. There is perhaps one leadership skill that she has been lacking, strategy and risk management.

It is easy to see how this could happen to any health business owner based on her response. This scenario, it seems, is not unusual in allied health businesses.

Another colleague with a long-established physiotherapy practice (15 years) was collocated with a GP who owned the building. Beyond word-of-mouth referrals, the GP was the primary source of new referrals into the practice. The relationship soured after a dispute about the tenancy agreement. The referrals dried up. To add insult to injury, another practice had just started up in the suburb. They took all of the referrals plus others,  from medical practices who had probably been looking for a place to send their patients for Physiotherapy but had never been approached.

 There is an inherent risk of being dependent on one referral source. Whilst good referrer relationships are the key to business success; this can also be a weakness if the relationship is just with one source.

Do you consider the strength and variety of your referral sources when looking at your risk profile for your business?

Dianna Howell CMgr MIML MAPA

November 2021

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