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Author's Note: Currently, I am sitting at our booth at Bourbon & Baby Teeth, a pediatric dental CE event in Louisville, Kentucky. As I am talking to these dentists, I am asking them what their biggest fears are as business owners and writing this blog in real time.
The idea of starting your own business is scary in any industry. It's even more daunting when you're starting your own dental practice, being that dental school doesn't teach you even the fundamentals of owning a business. With that in mind, let's take a look at the 4 scariest issues you'll face as a practice owner.
#1: What if I don't make payroll?
Typically this is a fear for younger practices and startups. Your team is your most valuable asset, meaning it's also your most expensive. So what can you do to make sure you always cover your costs? Start by tracking your monthly breakeven point, or BAM (bare-ass minimum.) Your BAM will tell you at what dollar of collections you cover your expenses and begin to generate a profit. Once you know your monthly BAM, break it down to a daily figure that shows you, and more importantly your team, how much you need to produce every day in order to cover costs. By building your daily goals around your BAM and getting your team on board with striving for it, you can more comfortably ensure you are going to cover your costs, which includes payroll.
#2: Staffing
This particular issue was brought up by a 5-location doc out of New Jersey, but I do suspect his concerns are universal: finding and keeping the right team members, from auxiliary staff to associate doctors. The first element of staffing is of course the actual hiring process, to which I would simply advise always be hiring. Don''t wait until you absolutely have to have that new team member to start looking for them. Hire ahead of the curve. The most successful and fastest growing practices we work with have job listings and employment ads running constantly. A steady stream of applicants is never a bad thing.
As for holding on to your team once you have them, that can be complicated. You need to deliberately and actively create a culture that people want to be a part of. Leaving your company culture up to chance is a risk that you can't afford to take if you want to grow unhindered. And in a workplace where you yourself are often judge, jury and executioner, I would advise that you invest in a third party coach to help sculpt your team. We have had numerous dental-specific consultants come in and train our accounting and tax teams in the same way to make sure we understand the inner workings of dental teams. If you'd like an introduction, we'd be happy to help.
#3: CASH
Collections up, cash in the business stagnant. The dentist's plight. Dentistry is debt heavy and cash poor, and it's no mystery why. Most practices don't have any specific cash flow management system in place, leaving them victim to Parkinson's Law. Enter: Profit First. We harp on Profit First a lot, but only because it works. Rearrange the formula: Collections - Profit = Expenses. Set aside profit first, that way you guarantee that you maintain healthy cash and profit balances.
#4: Finding a Good CPA
Alright, this one is a little self-serving, but given that we are sitting under a giant banner that says "Dental CPA Firm," it's no surprise that someone mentioned the struggle to find a good accountant. Obviously, our solution to this is working with us. We're proactive, we know dentistry just as well as we know the tax code, and our fixed monthly billing makes us a breeze to work with. Easy peasy.
Let our tax planning team “X-Ray” your numbers!
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