Question

An independent family clinic located in a poor neighborhood struggles to reach its breakeven point each month. At their current visit levels, they need to collect an average of $100 per patient visit in order to breakeven each month. They have asked for your consultation on some options that could help them remain profitable and not have to shut down, even if they have tough decisions to make. What advice would you offer them? Reference the Flexing Your Budget article as part of your response, in addition to at least one other literature/article.

Answer 1

• The Break Even point calculation is one of the crucial part to start earning profit in the business , the BEP has three crucial point ,
• Variable cost per unit
• Fixed cost
• Sales price of service

The clinic business can use any method to impact either all or any one of the highlighted factor(s) to achieve BEP. Some methods can be

• May reduce the fixed cost by Multiple use of the same space, like use the same space for selling medicine , reduce the size of clinic.
• Variable cost can be reduce by reduction in some support employee
• Sales price should not be change at this stage , as this may decrease the foot fall in the clinic.