By Cathy Jameson, PhD
December 19, 2013
While productivity is a critical factor in the business of dentistry, so is profitability. Financial experts tell us it’s not how much you make, it’s how much you keep. You may be frustrated by making more but taking home less. Whether you are dealing with school debt, purchase of a practice, building a practice, or if you are working to bring your practice out of the recession, financial stress may be evident in your life. In addition, throughout your practicing life, purchasing or upgrading facility, equipment, technology, and rising costs of operation, including employee investment, can all add to your financial stress.
Establish management systems in your practice so that servicing your debts does not cause overwhelming stress for you, your team, or your family.
Nevin and Sampson, in an extensive study of stress in dentistry, determined that stress in dentistry may have a direct effect on the physical well-being of both the dentist and the spouse. When the dentist is feeling upset, the spouse is also likely to be upset. The stressor that seems to emerge as the most intense for the dental families is financial and business strain.
Evaluate your financial needs and set goals that support debt servicing, the financial needs of the dentist and his/her family, team members, and practice overhead. Add to this a margin of profit that you can put away for emergencies or special needs.
By setting goals, you focus your mind and energies on the most valuable aspects of managing your practice. Establish accurate production and profit goals. Don’t just guess at these critical goals. How many dollars does it takes to run the practice?
Your management systems must be set up properly. Your team must have clear expectations and training as to how to administer those systems. You must have monitors established—based on your goals—that evaluate the health and well-being of those systems. The systems are the vehicles that lead to the way to profitability. If your goals are not being met, this is an indication that one or more of the systems are not functioning at their peak ability. As a leader, it is your responsibility to identify the area that is “off” and make adjustments immediately. Otherwise, the goals will continue to be out of reach.
The success of your practice will be in direct proportion to the success of your systems. Determine where you need to apply some “extra attention.” The attention will support your path to financial stability.