A company and a practice are the same thing, right? But there are more differences between a company and a practice than just using different words.
Practice vs. company
A practice relies on a client, exchanging money in return for a service from a practitioner. It’s an ongoing exchange dependant on the practitioners and the level of quality of their service. This is often how businesses in the medical profession are defined. Other professions that are dependent on individual skill levels, such as coaches and writers could also fall under this category.
A ‘company’ on the other hand, is not dependent necessarily on the sale of a particular skill set of a practitioner, or group of practitioners. It is focused instead, often on the sale of a product. It doesn’t rely on individuals, but on the established practices and systems within the company for success.
In essence, a successful company can continue to operate and provide a profit regardless of the individual at the helm (depending on how well they follow the established protocols of the business of course).
Building a practice
Because of the individualized focus of practice, your success is determined by the growth and investment on an individual level. What your practice needs to grow will differ, even from those within your industry.
Investment in people and their skills are vital to building a successful practice. Consider personal development opportunities in light of the future benefits they will reap for your business. Your reputation as a health and wellness practitioner is a valuable asset to your business.
A practice is something you as an individual are able to take with you, and it’s often the factor that makes many businesses truly successful. It’s that intangible quality that you personally, and professionally offer users of your service. It’s extremely difficult to put a price on the value of this.
Building a company
A successful company is able to use generally established practices of business to make savvy economical decisions. Marketing and other financial components to your business are able to be easily learned from other successful businesses in your industry.
A company establishes protocols that ensure the smooth running of the business, to the economic benefit of all. Many of these principles will be useful for you to consider, but may not always apply.
Do I have a practice or a company? If you’re starting your own business, or you’ve been operating for a while, it can be useful to gain an understanding of how you’re operating. Practices and companies have different strategies for success. Knowing what category your business falls under will help you apply the best strategies for success.
Discover how your business is operating. Is it a practice or a company? Consider if you’re applying the correct success strategies for your business. Adjust accordingly.
Aside from equipment needed for medical services, practices generally have lower start-up fees than a company. A company requires a larger team, and a bigger financial investment in product, marketing, and facilities. Do you have a product you’re selling? Is your team large or small?
If you’re a small team, relying on what you provide as a service, chances are you’ve got practice.
Could it be easily sold?
The financial viability of companies is often able to be easily detected, as it is not reliant on individual people and their skillset for success. By contrast, practice is often harder to get an accurate valuation of because its worth is tied up with the individuals in the business.
You can identify unique skills or ‘expert’ status in people in your business? This is what primarily brings value to your business. you’ve got practice. If your business is independently successful, regardless of the skillset of those involved, it sounds like a company.
Knowing if your business is a practice or a company will help you navigate the plethora of advice out there for businesses. Practices place greater emphasis, by necessity on the individuals within them, to ensure financial viability.
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