“Ignorance is bliss.” “What you don’t know can’t hurt you.” In general, these phrases are just really bad advice. In business, ignorance can bankrupt you.
In business, you have to know your numbers. Then again, your “numbers” could be literally anything, which is way too much to keep track of consistently. Instead, here are a few key “numbers” you should keep track of.
ROI- You should know your return on investment for any piece of software, hardware, dental supplies, etc. The best example is when there’s new piece of dental technology. It could be fantastic for you and reduce your workload, but it could also cost you more than it’s worth. Do you have the time and/or staff to become fully trained on this equipment. How often do you use said piece of equipment? How much is it saving you? You shouldn’t be guessing at these numbers.
Collection- Notice I didn’t say production. That’s because not everything you produce translates into cash on hand. Collections is what you should pay more attention to. It more accurately reflects how profitable you are.
Dental Supplies- Dental supplies can feel negligible when you’re buying them, but this is what will come back to bite you if you don’t pay attention. Dental supply ordering needs to be a controlled process handled by one person so that supplies are not ordered willie-nillie just because someone can’t find something at any given moment. This person should also be responsible for watching pricing and making sure you are getting the best value for your dollar. You would also be amazed at what organized storage of supplies can do to help you reduce over-ordering.
Autopayments/subscriptions- Autopayments will bankrupt you slowly, painfully, and without you noticing. Once a quarter, you should take a moment to look at your subscriptions and ask yourself if they’re worth keeping.
Keeping track of your numbers can be overwhelming, especially when everyone telling you to keep track of them is being vague. Keep this list in mind, and you should feel more confident about your finances and more aware of where your money is going.