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 only work on increasing revenue, the expenses will creep up as well – leaving you with nothing more in your own pocket. And that surely does not feel good.
Begin by looking at all expenses – every dollar that leaves your practice – and ask yourself if this is an essential expense in your practice. Nothing is sacred. Every expense must be evaluated.
Sometimes it takes another set of eyes to help in the evaluation because we tend to get stuck in our past decisions and make assumptions. Don’t beat yourself up over this. We’ve all made bad money decisions. The point is to step up now and make good decisions.
So, the best way to get started is with a small amount, say 1 or 2% of collections to allocate and transfer to the Profit Account. At the same time work to reduce your current expenses by 1 to 2%. If you need some help or have questions, I’m here for you.
Barb Stackhouse RDH, M.Ed.; Mastery Level Certified Profit First Professional
Author of Profit First for Dentists, subsidiary of Profit First by Mike Michalowicz