Early in my career, I remember “hoping” there’d be some money left in the office checking account after the monthly bills were paid. Like many of my colleagues, I knew dentistry, but I was virtually clueless when it came to running a business!
Two years into practice, however, I had the good fortune to meet Dr. Jim Pride, founder and former CEO of the Pride Institute. From that meeting, a strong and lasting friendship – and the foundation for my ultimate financial success – arose.
The Pride Institute offered a number of practice management seminars, including “The New Patient Exam,” which helped me organize my clinical findings into sound, efficient, and acceptable treatment plans. But its offering called “The Dentist as Entrepreneur” changed my life, for it taught me how to create and understand an operating statement which revealed the strengths and weaknesses of my practice.
By categorizing your monthly expenses and comparing them to “best practice” averages, you can immediately determine if one or more operating costs are out of line. Creating and reviewing your practice statistics also enables you to make sound financial decisions when reinvesting in your practice.
The icing on the cake is that your operating statement will clearly identify your fixed monthly expenses (rent, utilities, telephone, salaries, taxes, benefits, etc.). If you annualize those expenses and multiply that total by 117% to allow for variable expenses (lab and supplies), you’ll have a pretty good idea of what it costs you to keep your doors open. Add your personal annual income need to that total, and divide the grand total by the number of days you’ll practice in the coming year to determine a daily financial goal. Now you won’t have to “hope” that there will be money left at the end of the month – you can predict it!
Establishing a daily goal also provides you with the information you need to determine production goals for both the hygiene and restorative departments. Simply stated, multiply the number of hygiene patients seen per day times your average fee (prophylaxis, exam, plus half the bitewing fee) to calculate a daily hygiene goal. Subtract that number from your daily goal to determine your goal for restorative care.
Tracking your production on a daily or weekly basis will enable you to determine at a glance whether or not you’re achieving the financial success you desire. Making adjustments to your practice, fees, or schedule can be made as needed to keep you on target!
For more information and an in-depth understanding of these business concepts and more, check out the Pride Institute’s new offering called “Managing by the Numbers.” Understanding your practice statistics will help you make sound business decisions which can greatly enhance your financial success!
Looking for high energy seminars to enhance your dental meeting and boost dental team success?
Stuff Worth Knowin’ About Business, Practice and Life
Contemporary, pertinent, and useful information regarding money, practice, and life. Consider life’s challenges and benefit from Dr. Kerr’s personal experiences – both good and bad! Examine stress management and life planning techniques. Learn ways to improve your chance for financial success, and consider the needs of loved ones as the years pass.
Examine the challenges that dental teams face daily and uncover solutions which enhance clinical skill, improve chair side efficiency, and empower the business team to build patient perceived value to the practice. In the accompanying workshop, attendees learn from each other as they resolve clinical and practice management ‘Now What?!’ scenarios!
Building a Booming Business
Dentists are typically well prepared to care for their patients through excellent clinical training, but are grossly underprepared to own or operate a small business in today’s changing and challenging marketplace. Learn valuable real life lessons in this dynamic and fast-paced program which will touch on many of the factors necessary to operate your practice successfully.