Turbulent cash flow, surprise expenditures, or a lull in production can all make you feel like your practice is going off the rails, financially speaking. Because so many independent variables are involved in our practice’s cash flow, it is easy to become overwhelmed. So you could struggle on with that feeling of being out of control… or you could stop, take a breath and do take these three steps.
1. Stop comparing yourself to braggart friends.
I made 40,000 dollars my first year in my private practice. As it was a startup, I was proud of myself until I mentioned it to a dentist friend. He snickered, and I immediately felt like a failure. He went on about his new patient and production numbers while I sat there feeling entirely depressed and envious. I was naive. Since then, I’ve learned there are so many other ways to evaluate success. Simply put, financial stability is not a just matter of gross production and new patient numbers. Every practice is truly unique. You will hear dentists throw around crazy numbers- don’t waste your energy on beating yourself up. Reflect on what would mean success to you.
2. Substitute algebra for emotion.
You’ve likely had a patient get emotional in your chair because they feel like their mouth problems are out of control. As you try to console them, you know in your heart they have way more power than they believe they do at that moment. You know that sitting around feeling bad won’t do any good. They need a comprehensive diagnosis and a plan to get to a stable place. The same goes for your practice. Knowledge can relieve anxiety. If you need a free tool to start understanding how cash is moving through your practice, head to waterfallprofitcalculator.com. It’s a free tool to help dentists diagnose their practice financials on their own.
3. Plan for profit and work backwards
Your gross revenue could be 5 million dollars or 500 thousand dollars, but the real hallmark of financial stability in your practice is profit. That is, after all expenses (including your salary) are paid, there is still positive cash flow in your practice. That concept can be very elusive when you own the business and play the role as the primary producer. Profit equals mental peace for a practice owner. Instead of just pressing for more and more production, consider a profit goal for your practice. Then you can define how you want to direct your time, energy and resources proactively to meet this aim.