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Monday, August 31, 2009

What is your donut?

I was talking to my father-in-law the other day about a client of his who is a baker. This baker used to make lots of fancy and expensive items, such as cakes and tortes, but now he makes mostly donuts. He did not always do this. He began to do it out of neccessity. Donuts, you see, are high profit margin products.

Dunkin Donuts only makes donuts and coffee and guarentee them to be fresh anytime. Dunkin Donuts can do this because donuts are so cheap to make and they have such a high profit margin, that the store can afford to throw away items that have gone stale.

Urology has high profit margin procedures. Vasectomies and cystoscopies are 2 examples. Larger, maga-groups have radiation therapy for prostate cancer, which for now has a high margin. Laboratory work is low margin. Major surgery in the hospital is low margin.

In your practice, what has a high margin?