Owning your own practice is tough. Although dental school prepared you for the clinical side of things, your practice success depends on more than exam room expertise. Your success also hinges on team management, marketing, and – of course – profits and losses. Many of my clients are extremely intimidated by the financial side of dental practice planning. They may understand the basics of budgeting. However, when it comes to the practical application of the budget and the economics of increased profits, they suddenly feel like a fish out of water. Below are 10 rules that, in my experience as a dental coach, will help you follow your practice budget and enjoy increased financial success.
Follow These 10 Rules
Double and triple check: Mistakes happen, but when they are financial mistakes, the consequences can be disastrous. Review all collections and deposits personally. You might also have your office manager or another office administrator review them as well.
Employ a CPA: As a dentist and business owner, you have enough on your plate without adding the burden of sole financial responsibility. Hire an accountant to review monthly statements. Your CPA will also be a lifesaver come tax time.
Keep in touch with your banker: Even with an accountant, you should meet regularly with your banker to review statements, profits, and losses and to make sure that you are on budget.
Pay all bills on time (or early): This is an obvious rule but an incredibly important one. Over time, late fees can eat into your profits. Additionally, timely bill pay will help keep you on budget.
Keep a cash reserve: Make sure you have enough extra money on hand to cover unexpected or emergency expenses.
Back up all financial documents: You should keep all important paperwork in a safety deposit box at your bank. Keep digital records of patient and financial information in a secure digital file, and back up these records daily. (Make sure you are prepared for a computer crash. Keep records on an external hard drive or use cloud storage.) At the end of every month and year, transfer these files to your safety deposit box.
Keep insurance up-to-date: This is another obvious but incredibly important rule. Remember, insurance does not only mean malpractice and liability insurance. You should have business insurance as well. Your state may have specific laws regarding the type of business insurance you should maintain.
Invest in marketing: If you are looking to see practice growth, increased marketing efforts are essential. In particular, you should have a great website and a Facebook account. You should also monitor and respond to online reviews. If possible, hire a PR expert to help you with your marketing efforts.
Prepare for sale: You may have no intention of selling your practice – at least not until you reach retirement – but you should function as if you were going to sell it tomorrow. Tragedies, accidents, and unexpected life events occur. If you suddenly found yourself in position in which you could no longer maintain your business, having it sale-ready would prevent tremendous personal and financial stress.
Have a personal financial plan: Just as it is important to find balance in your personal and professional life, you should also have your personal and professional finances in order. When you have a solid financial plan for yourself and your family, it will be easier to understand how your practice growth personally affects you and your team.