Assessing Your Practice’s Financial Health: Where Are You Now?

You Can’t Improve What You Don’t Measure

Before you can move toward profitability, you have to know where you’re starting.
That’s why the first step in Profit First for Dentists is an honest financial assessment — what I call “taking your practice’s pulse.”

“You can’t prescribe a treatment plan until you’ve done an exam, and the same is true for your finances.”

Most dentists are producing well but unsure where the money goes each month. The assessment removes that mystery and reveals the truth in a non-judgmental way.

Step 1: Gather Your Data

Pull your last 12 months of financials — specifically, your total income (collections) and your total expenses.
We’ll use these numbers to understand how your money is currently being distributed.

Don’t overthink or try to “clean” anything yet. The goal isn’t perfection — it’s clarity.

Step 2: Categorize Every Dollar

Next, we’ll categorize your spending into the key Profit First for Dentists categories:

• Profit

• Owner’s Pay

• Taxes

• Operating Expenses

Each dollar of revenue should eventually fall into one of these four categories.

You might not have these exact accounts yet, but by classifying expenses this way, you’ll begin to see patterns and insights.

Step 3: Calculate Your Percentages

Take the amount spent in each category and divide it by your total collections to find the percentage.

For example:

• Owner’s Pay: $210,000 ÷ $1,000,000 = 21%

• Operating Expenses: $700,000 ÷ $1,000,000 = 70%

• Profit: $10,000 ÷ $1,000,000 = 1%

• Taxes: $80,000 ÷ $1,000,000 = 8%

These are your Current Allocation Percentages (CAPs) — your financial reality today.

“Your CAPs don’t judge you.”  “They simply reveal what’s true.”

Why This Step Matters

Seeing your CAPs for the first time can be eye-opening.
Some dentists feel frustrated or even embarrassed — but I encourage you to see it as data, not drama.

This step builds awareness, and awareness is the beginning of change.

Final Thought

Before implementing any new system, you have to know where you stand.
Your financial assessment is your baseline — the first step toward financial clarity and confidence.

“Once you see the truth, you can design a plan to change it.”

If you’re ready to take that first honest look at your practice finances, download the assessment tools and worksheets that accompany Profit First for Dentists or visit ProfitFirstDentist.com .