Mike McAninch is a Practice Integration Advisor with Buckingham Strategic Wealth, where he specializes in helping dentists connect their money and their values to realize their most important financial goals.
Many dental practices carefully prepare annual plans detailing the year’s expected production, collections and practice expenses. Often a dentist will proudly tell me, “I will grow my practice by 3 percent next year!” It is certainly true that a well-thought-out annual plan assists practice owners in managing their day-to-day activities.
Stephen Covey, author of the book “The 7 Habits of Highly Effective People,” said it best when it comes to planning. His second habit is to begin with the end in mind. It means beginning each day, task or project with a clear vision of your desired destination. Annual growth numbers, as well as some other elements of a practice’s annual plan, are not a destination, but rather mile markers along the road to your larger objectives. Education for your children, living a comfortable retirement, providing for a charity you are passionate about – these are destinations!
This is how I recommend starting each year’s planning process. Ask yourself: What are my most important destinations, and how will my dental practice assist me in moving me along on this journey? Dentists should be able to link each major component of their annual plan to strategies aimed at reaching their long-term destinations.
For example, a dentist wishes to buy a new cone beam. This technology is certainly state of the art, but it’s also very expensive. As a result, the dentist should consider the purchase not only in the context of how it improves practice profitability, but also, and more importantly, how it helps meet education savings and retirement funding goals for the year.
Establishing these important links between your proposed annual plan and your long-term “destinations,” to use Covey’s terminology, will assure that you “begin with the end in mind.”
In our next article, my colleague, Katie Collins, will take a more in-depth look at the specifics of creating a solid practice annual plan and identify key measures that dentists need to consider in preparing one.
Still have questions? Please reach out to any of Buckingham’s Practice Integration Advisors. We are here to help you reach the most important destinations in your life!