Finance32: Dental School’s Missing Curriculum
Finance32: Dental School’s Missing Curriculum
Great clinical skills simply are not enough for dentists to achieve financial success. Let Buckingham Strategic Wealth's Practice Integration Advisors share what else you need to know to realize your lifetime goals and obtain financial peace of mind.
Buckingham Strategic Wealth

What Performance Metrics Are Important in Your Annual Plan?

What Performance Metrics Are Important in Your Annual Plan?

1/31/2018 9:00:00 AM   |   Comments: 0   |   Views: 64

Katie Collins, a Practice Integration Advisor with Buckingham Strategic Wealth, helps dentists order their financial lives and reach financial peace of mind so they can better focus on what truly brings them joy.

In his last blog post, my colleague, Mike McAninch, discussed your practice’s annual plan. He encouraged you to start the process of thinking about your destination – where are you going this year? Now that you’ve laid out your important destinations for the next 12 months, let’s talk about a few of the metrics to track in an annual plan.

When I hop in the car to visit my friend Brooke in Nashville, the first thing I do is put her address into my navigation system (I live in Indianapolis). As I begin the trek, markers throughout my trip let me know I’m going in the right direction. I know that when I hit Louisville, I am about two hours into my drive. As I pass through Bowling Green, I can tell I have a little over an hour left. I also know that if I’m traveling through Knoxville or Memphis, I took a wrong turn somewhere and I am way off course. Without these markers, in this case road signs along the Interstate, I’d be flying blind as to whether I was headed in the right direction and will reach my destination.

The annual plan for your practice serves as your roadmap for the year. At this point you’ve thought through and laid out what your destinations are; now you need to get there. This is what the annual plan provides you – a roadmap to regularly consult. One of the first places a dentist will start is to determine the production goal for the year. Your production goal could be an inflationary increase over last year. Or maybe you’ve added a couple of hygiene days and will expect a larger increase. Once you’ve determined the practice’s annual production goal, you’ll then break that down into daily production goals for the members of your team. These daily goals will allow the front desk to schedule toward a “mile marker” every day. Daily production goals are like individual directions that let you know you’re on the right course to reach, as well as making progress toward, your planned destination.

Unless you are planning for a large capital expenditure, expenses usually mirror the prior year. Expenses should be tracked against your plan each month. This will allow you to spot any discrepancies quickly and avoid suddenly ending up in Memphis because you weren’t following your directions.

An annual plan is essential for any dental practice, or any small business for that matter. To get somewhere, you first need to know what the destination is, as well as have the right roadmap to get there. Without any planning, chances are good you’ll have no idea if you are even on the right road, much less whether you’ll end up where you want to go. An annual plan provides a dental practice the goals to schedule toward and track against. It also offers your staff directions. They are in the car with you, and the more they know about the destination and understand the map, the more help they will be as you begin your journey.

If you have questions or would like to discuss this further, please don’t hesitate to reach out to schedule some time.

As always, if there are specific questions or topics you’d like us to tackle in Finance32, please send us an email! We strive to make sure what we discuss here is relevant to what you are looking for.

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