The Business of Owning a Practice – Debt
Welcome back to another edition of The Business of Owning a Practice. This week, we are talking all about debt. Check out my recent video here!
The topic of debt can be not only a scary one to dive into but can bring up feelings of shame or embarrassment. I want you to know, first and foremost, that owning a dental practice almost always comes with debt. In order to acquire a practice, you’ll likely need a business loan, and most dentists also have personal debt in the form of school loans, home mortgages, car payments, and even personal credit card debt. You are not alone if you, too, have debt.
Just because most dentists have debt, doesn’t mean that having debt is easy. It can often feel heavy or stifling to realize you are swimming in debt. That’s why I’m here to give you some practical tips for getting out of debt using my Profit First method. Before we get into those tips, though, we need to recognize the difference between Good and Bad Debt.
Good Debt is debt that increases the revenue being generated. This can include things like building or equipment loans.
Bad Debt is debt that is acquired on things that are depreciating in value. This can include things like credit card debt you can’t pay off each month, debt on building space you can’t afford, or debt on equipment you never or hardly use.
So, how do you gain control over your debt and break free from it?
- The first step is to not beat yourself up. Take a deep breath and remember that you can start where you are and make a plan to determine where and how to spend your money and time moving forward. Then, stick to that plan.
- Place a debt freeze on both your practice and your personal life. Stop taking on more debt until what you have is under control.
- Realize that you can build profit and reduce debt at the same time. You don’t have to sacrifice making a profit or saving in order to reduce your debt.
Having debt is a common occurrence in dental practices. You don’t need to feel ashamed, but if you are drowning in debt, it is time to take action. I have some completely free resources to help you start taking action on my website. You can also learn from my book or contact me with any questions you have.
You are always welcome to reach out to me by scheduling a call at call.barbstackhouse.com
Don’t forget to follow me on YouTube so you won’t miss any of my weekly videos.
