Profit First for Dentists

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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...

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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...

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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...

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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...

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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.




PFDentist TAPs

PFDentist $



Real Revenue














Owner’s Compensation














Operating Expenses








If you’d like a printable copy of this form, go to my website here:

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...

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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...

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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. ...

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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...

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Putting it all Together: How Profit First Works

Uncategorized Aug 03, 2022

Being self-employed is the best thing on some days and the worst on others.  There are many days when it seems like the work never ends.  There are days when you wonder if you’ll ever find the Freedom you set out to have by owning your own business. 

Finding that Freedom means you set your business up to work for you – not you always working for it.  This means you know your numbers because you have a simple system in place.  This means you know your profit and you know how to make decisions based on profitability not just production. 

So how does this happen?  Glad you asked.

Using the Core Principles of Profit First for Dentists, let me review the overall system.  If you need a refresher on these core principles, go back in my blog posts where you’ll find a blog post for each one. Or better yet, grab a copy of my book where you can learn all the details. 

Remember all the money flows into the Income Account each...

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Cash Flow Consistency using Profit First for Dentists

Uncategorized Jul 25, 2022

This is the last blog post in this series of 5 about the Principles of the Profit First for Dentists method.  The final principle is to Enforce a Rhythm. 

I hear from dentists pretty consistently they feel like the cash flow is a roller coaster.  One month it’s up and the next it’s down. This causes a struggle when paying all the bills and meeting payroll demands. 

Instead of playing catch-up or going into panic mode when all the bills are due, it’s best to establish a weekly rhythm and flow to the cash coming in and out of the business.  Creating consistent cash flow week in and week out removes the panic button and replaces it with peace of mind. 

This weekly rhythm allows you to allocate by percentage and transfer money each week thus funding all the accounts in the correct amount.  Weeks that have a higher dollar amount in collections will serve to build up reserves in each account and then on the weeks when collection is...

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