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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...

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The Business of Owning a Practice – Technical Training vs Business Training

Last week, I introduced my new 8-week YouTube video and blog series focused on simplifying the money management process in a dental practice through using my Profit First system for dentists. This week, we are diving right in and talking about the value and purpose of Technical Training vs. Business Training.  Check out the video here!

If I asked you how much of your dental education has been focused on technical vs. business stuff, what would you say? Most people would say that the vast majority of their education has been focused on technical training. Which I understand! Not only do schools have a specific job to do in training excellent dentistry practitioners, but learning the technical side of dentistry is honestly more fun when we go for continuing education. Which I also understand, because I personally LOVE the technical side of dentistry.

I believe, however, that the more technical training you get, the more business and leadership training you also need. That will...

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Business of Owning a Practice - Video 1 of 9

This is my new series about the business side of owning a dental practice. Each week I will be posting a new video on specific topics of business and how It relates to dentistry. I will also be sharing the challenges that I see dentists facing. After reading this week's blog, don't forget to check out my video on this topic as well.

Now, if you are like many of the dentists that I speak with, things are a bit hectic and you are never able to get everything done. There is always a lot going on in a practice. I always say that dentistry has a lot of moving parts. It makes the day fly by and at times it seems to just slip away. It may seem that you never have that extra time to manage all the administrative tasks of your practice.

My goal is to simplify the money management process in a dental practice. I do this by using the Profit First system. I help dentists to fully know where they stand in regards to their finances. I teach them how to pay themselves first, how to pay their...

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How The Tax Account Works

If you had to rank which aspects of running a dental practice are the least fun, paying taxes would probably be close to the top of just about everyone’s list. Many folks probably find the experience not just a chore, but a painful one at that. In my new video, I explain how planning ahead and establishing a tax account can make tax time a little bit less of a headache.

A Tax Account is simply a savings account that is allocated for various kinds of tax payments. Every week, set aside a percentage of your gross deposits and designate it to your tax account. You can use the money in your tax account to pay things like income tax, owner taxes withheld from their paycheck, and other business taxes associated with your dental practice.

But why is a tax account important? Having a separate account to handle taxes is a great accounting tool. Not only does it help you keep your finances organized, it also helps to ensure that you’re prepared when taxes are due. Anyone...

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No Temptation Accounts

One of the most important tips for business owners is to avoid temptation accounts. Now what exactly do we mean by that? Well, in this case, I'm talking about the temptation to borrow money from one account to fund another, or robbing Peter to pay Paul, as they say. While this may seem like a perfectly reasonable action, in reality, it means stealing for yourself to pay a bill or make a purchase for your business.

So what can we do to avoid this? 

When an account is used for more than one purpose, it becomes too easy to pull additional funds from one purpose to cover for the other. To avoid this, the profit first model utilizes multiple bank accounts, each to hold money for one specific purpose. Another way to reduce the temptation to steal from the profit or tax account is to have different accounts set up at various banks across town so that it is harder to transfer money from Point A to Point B.

This temptation most often occurs when the operating expense account runs low...

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Dr. Whitney Sebree Testimonial

Whitney started her own business in 2019 and quickly discovered that things were growing really fast. While this was exciting, she also felt like she was buried under a mountain of tasks and could not figure out how to gain control of the business amidst this growth. Whitney eventually reached out to a mentor who suggested working with Barb. After a quick consultation, they both agreed it was the right fit and the rest is history!

At the beginning, Whitney did know how to navigate the numbers side of the business and routinely felt lost. After working with Barb, Whitney has been able to make data informed decisions to benefit the business and her clients. A framework for how to ebb and flow based on these practical numbers has given Whitney a sense of control and allowed her to know exactly how to make the adjustments necessary. Eventually, Whitney was able to begin taking regular paychecks which removed an incredible amount of stress and released her from the symptoms of burn out....

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The Need to Be Profitable

What if I told you that focusing on profit would actually allow you to provide a better patient experience? While some people may fear that prioritizing profit is a selfish act that creates distance between you and your patients, it is actually a key component to creating a healthy, positive patient relationship. You are taking wonderful care of your patients when you put profit first!

While this may feel unintuitive, the reason for this is quite simple: stress is challenging to manage and can negatively impact relationship dynamics (which can not only affect your work, but also your life outside of the workplace). Relationships with patients are no exception to this! When you are feeling comfortable and confident in your cash flow and profit margins, you will be able to fully focus on providing the best care that you can for your patients. 

On the flip side, when things are tight and you are feeling financially squeezed, it is inevitable for some of these feelings to shine...

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