Before you pursue an equipment upgrade, you must carefully weigh the financial ramifications of such a purchase. According to William J. Tice, managing director of The Hillside Group, the key information to gather is the equipment price, the financial terms available, as well as your projected procedural volume and projected incremental costs.

Once you have this information, perform a monthly break-even analysis, using the following formula:

Monthly payment � [incremental procedural revenue � incremental procedural cost] = monthly break even point.

The figure you arrive at is the number of procedures you�ll need to perform per month using the equipment to break even. To see a profit, you must exceed the break-even number.