What’s Your NET?
If I woke you up, middle of the night, shaking you, aside from hopefully clubbing me, would you be able to answer this question:
“What’s your net profit from your practice?”
Do you know with absolutely certainty what your overhead is with your compensation included?
What about without?
Do you know how much your dental practice is really worth?
If you don’t know these things, you’re hurtling through space about to kiss a meteor. And, that my friend, isn’t going to end well.
I coach my ClearPath Society® Members to have a solid grip on their numbers. I don’t just mean average daily production. Or, your hourly production. Those are measures of your output.
They mean ZIP when it comes to valuing your business.
The real and true and only thing that matters is NET.
Net with your pay. Net without your pay.
You see, if you’re sucking all the profits out of your practice as compensation, congrats… you my friend, have a JAY OH BE. JOB.
And, if you think your practice has a high value, it might to you, but when it comes time for transition, the fact you’re sucking it all out ain’t going to be that appealing to a buyer.
You see, when they buy, their agenda is different from your current agenda. And, it’s that agenda you’ll need to clearly understand before it comes time to think about selling.
(My feeling is if you can avoid selling and instead, BUILD a business that will operate without you being there, your business has FAR MORE value to a buyer – and to you - especially if there’s a respectable 18-22% margin leftover!)
I’d encourage you to take this very short article to heart. Dig in. KNOW your numbers. And, don’t rely on or wait for your CPA or bookkeeper to send them to you once a month, or, worse, once a quarter.
One doctor I spoke to recently only looks at his P&L every March before he files taxes. Me, I meet with my CPA once every quarter to make sure I have a handle on what I need to be doing every step of the way. Suggest a similar strategy for you, too, especially if you’re growing!
About The Author… Jerry A. Jones is the CEO of Jerry Jones Direct (JJD), an over two-decade old marketing and advertising firm whose clients include Dentists and Financial Services Advisors in the US, Canada, Australia and England. He’s a widely-published author of several books and thought leader, writing opinion papers and articles for a variety of publications. Jerry also publishes five different newsletters and two magazines every month, leads dental mastermind sessions, and creates marketing and advertising campaigns for his private client Financial Advisors, Dentists and ClearPath Society® Members. He is also the Founder & CEO of Wellness Springs Dental® in Salem, Oregon, which includes an incredible group of four Doctors and an amazing team. Wellness Springs Dental® will be offering national dental office franchises in 2015. You can also pick up Jerry’s latest books at www.JJDBooks.com. Further info @ www.WellnessSpringsDental.com. More information on Jerry can be found at www.JerryJonesDirect.com, www.ClearPathSociety.com or www.DentistryConfidential.com.
©2015 Jerry A. Jones, JERRY JONES DIRECT, ALL RIGHTS RESERVED