Profit First for Dentists

Tracking Stats Free Resources Work Together My Book Blog Yes, Let's Talk! Login

Stuck Thinking It All Has to be Perfect!

I’m a Recovering Perfectionist!

However, perfectionism doesn’t really exist! Being hard on yourself because you’re not perfect is just wrong.  I am a person who strives to make things perfect and what I’ve learned is this is a big ol’ Rabbit Hole!  It’s never ending! And it's never going to be perfect.  

So instead I’ve changed my mindset to be one of ‘Doing my Best’ rather than thinking it needs to be perfect.  It’s so easy to get caught up inside the mind replaying conversations and actions.

With Profit First I’ve found many dentists think everything has to be perfect before they can get started.  And that’s just not true.  Waiting to begin only puts you behind on the increased profits you’re going to realize.  Why would you want to wait on that? 

Dentists tend to be analytical people. They like to check, and re-check everything before making a commitment....

Continue Reading...

Cash is King! (or Queen)

Once you have taken stock of the debt situation you are in, it’s time to make a plan for Debt Reduction.  In order to pay down your loans quicker, you must have additional cash flow (profit) in the business.

The Profit First model is great for this because you are already setting aside money in the Profit Account.  Once you really get a handle on the overhead it’s simple to put more in the Profit Account. 

The Profit Account is used for quarterly distributions to the owner doctor.  Remember, this is the pay for doing dentistry in the practice.  The Profit Account may also be used to pay additional principle on any business loans or credit card balances. 

When you decide to use part of the distribution for debt reduction, the owner will now take less in distribution for personal use.  For example, the typical owner distribution would be 50% of the Profit Account deposits for the quarter but with focused debt reduction, the owner might...

Continue Reading...

Reducing Debt...Especially Bad Debt

Dentistry is an expensive profession.  It’s costly to go to dental school. Then to either open or purchase a practice is another significant investment.  It’s very likely that debt will be incurred in this process. 

Most dentists I work with are still paying on debt. These monthly payments can become drudgery in a short time. It can seem never ending!  And on top of practice debt, there’s personal debt.  Whew! The pressure to produce is real. 

With the profit first model, debt can be factored in when considering profitability. What I mean is this. A portion of the Profit Account distributions may be used for some additional debt reduction if that is the goal of the owner. A system may be put in place with a plan to eradicate debt sooner. 

First, begin by taking stock of all debt. What exactly are you paying out in payments every month? What percentage of collection is this?  Is any of this bad debt, like credit card debt that...

Continue Reading...

How Does the Profit First Rhythm Work?

If you think about your dental practice, I’m sure you’ll find you have a daily rhythm to things.  Most of us would say we have personal daily rhythms as well.

We tend to rise and start our day very much the same from day to day. The rhythms of our life provide an unwritten structure that actually then perpetuates the rhythm to continue.

The same is true of your business, your dental practice. When implementing a pattern of behavior in a rhythmic cycle, we are much more likely to continue to take action. Taking action is where the magic happens with Profit First. 

A weekly rhythm of allocations and transfers seems to work best for a dental practice. Income flows into the practice daily and then once a week, it’s time to allocate by percentage and transfer money to the additional bank accounts set up for a specific purpose. Those accounts are for Profit, Owner’s Compensation, Taxes, and Operating Expenses. 

As money flows into each account, it is...

Continue Reading...

How to Start Small & Trim the Fat!

Transitions always take time.  Once you decide to make the change to the Profit First system and take action, you’ll likely meet some challenges.  It’s all new. 

When things get wonky and difficult, the natural reaction is to go back to the ‘old’ way of doing things.  It’s familiar and we feel okay there.  But is that what you want? 

Give yourself some grace as you navigate new ways of handling your money.  It’s best to start small.  Putting 1% of collections in the Profit Account is better than 0%. 

To build the Profit Account percentage or increase your Owners Compensation, you’ll need to begin the process of scrutinizing all expenses.  Reducing the overhead may seem impossible right now but I’m here to tell you many have done it and you can too! 

If your goal is to increase Profits, it will take working on Overhead reduction plus Revenue increases.  In my experience if you...

Continue Reading...

How do I set my Target Percentages?

Uncategorized Sep 07, 2022

On last weeks blog I shared how to enter your own statistics into the table.  This allows you to evaluate your current allocation percentages. 

If you haven’t yet completed the assessment, you will not be able to set target percentages.  Every practice is different and the place to begin is with your own current reality.

Assuming you do have the assessment completed and you do know your current percentages, it’s time to set some targets or goals.  Setting a target percentage means you are getting very specific.  This target can be measured.  You will know whether you reach it or not. 

If you’re serious about reaching your target, it’s time to draw the line in the sand.  I suggest you share your target goal with someone who will hold you accountable.  Check in with them often.

Now a word about the target percentages.  They should challenge you but still be realistic. They must be attainable within a period of...

Continue Reading...

Uncategorized Aug 30, 2022

Use this Table to Complete the Self-Assessment

 

Last week’s blog post gave you the directions for gathering all the data (numbers) and now today I’m sharing with you what to do with those numbers to complete your own Profit First Assessment! 

Here’s the table I’m referring to.

 

ACTUAL $

CAPs

PFDentist TAPs

PFDentist $

COMPARE

FIX

Real Revenue

A1

100%

100%

D1

E1

F1

Profit

A2

B2

C2

D2

E2

F2

Owner’s Compensation

A3

B3

C3

D3

E3

F3

Tax

A4

B4

C4

D4

E4

F4

Operating Expenses

A5

B5

C5

D5

E5

F5 

 

If you’d like a printable copy of this form, go to my website here: https://www.profitfirstdentist.com/download-free-resources-sign-up

Column A – Please enter all of your Real Numbers from the prior year data that you have collected.  For example Real Revenue is the total amount of money collected in your business for the prior...

Continue Reading...

Are you Ready for the Self-Assessment & Your Financial Truth?

Uncategorized Aug 21, 2022

With Profit First for Dentists once you commit to the Self-Assessment and take the action to complete it, you are also opening yourself to the truth of your financial situation.  Are you ready? 

This assessment is going to help you see how much cash came into your business and how much cash went out for a certain time period, typically the prior calendar year. 

The first step is to gather all the data you will need to complete the assessment.  This is an important step because if you just dive into the assessment and have to keep stopping to gather data, you’re going to get frustrated and give up. Besides it will take a lot longer to accomplish the task.  So, do take the time now to gather the data. 

Here’s what you’ll need to gather:

Profit and Loss statement for the Previous Calendar Year

Balance Sheet for that same time period

Tax returns for the same year

Payroll reports for the same year

All business loan statements for the same...

Continue Reading...

What Percentage Allocation Should I Have for Each Account?

Uncategorized Aug 15, 2022

Once all five of your Profit First bank accounts are set up, it’s time to figure out the allocation percentages so you can begin to transfer funds each week.  The actual transfer of funds from the income account to the other four accounts is where you will see the magic happen.  I can’t wait for you to get started!

So how in the world do you know what percentage to use for each account?  Great question!!  And I know you’re wondering how you’ll have enough in the Operating Expense account to pay all the bills and not run short – especially if you’re feeling like things are really out of whack with your finances. 

I want you to first promise you’re going to stick with it once you go to all the work to do the self-assessment.  Please make this promise to yourself.  If you don’t write it down and really make the promise to yourself and things get tough – you’ll be so tempted to quit. ...

Continue Reading...

Why do I need 5 Bank Accounts? Profit First for Dentists Official!

Uncategorized Aug 08, 2022

If you’ve been following my blog posts, I’ve been writing about the core principles of Profit First for Dentists and now I’m shifting my focus to the Self Assessment and how to put all of this together to make it work. 

One of the first questions many dentists have is, “Why do I need the 5 Bank Accounts? Can’t I just do this on a spreadsheet?”  Great question! And I’m glad you asked. 

The truth is that I have all my students begin with just one extra account called Profit.  This one little behavior changes everything.  You see Profit First is a behavioral system.  The beautiful thing about this is that it capitalizes on our natural human behaviors around money. 

If we can use the current behavior to make a positive difference in cash flow, well Yes, let’s do it!  Seems like a no-brainer to me. 

Funding the Profit Account every week begins the habit of Profit First but it’s not the...

Continue Reading...
1 2 3 4
Close

50% Complete

Two Step

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.