Hey everyone! Thank you for sticking around with me for the last video of this series!
Are you a small business and/or a dentist that is in need of keeping your profit? Are you struggling a bit financially? It can be hard to navigate finances as a dentist with the way taxes are. Well, today’s topic is to help you find the resources you need to profit first.
Today we are going to be talking all about GAAP: Generally Accepted Accounting Principles. GAAP was created for accountants to follow when reporting their business client’s income to the government. An equation that accountants still use today is: sales - expenses = profits. Therefore, the business has sales that collect the money that is needed to pay all of the bills. Afterward, the business owners get to keep what is left. Unfortunately, small business owners and dentists do not always get to keep the profit that they wish to have or deserve. This is where Profit First for Dentists is available to help you and your...
So many dentists that I talk with seem to be asking the same question: where is all the money going?
They’re working hard, getting new clients, and feel like things are going well, and yet, at the end of each month, their profits are not increasing. To make things more difficult, many dentists can feel overwhelmed or confused by their Chart of Accounts. If that sounds like you, don’t worry–you are not alone! I’d encourage you to take a step back, breathe, and work on organizing just one part of your Chart of Accounts. Today, I want to help you organize your expenses, which really fall under 2 major categories and a few subcategories.
The two types of expenses that your dental practice has are: Fixed Expenses and Variable Expenses.
A Fixed Expense is an expense where the dollar amount you’re spending each month does not change, but the percentage of the expense in collections will vary. Fixed Expenses include:
It’s a given that all dental practices will be consistently trying to increase their number of new patients. Most dentists I encounter would say that for a dental practice, growth can be defined by an increase in patient numbers. However, I want to suggest that from a profitability standpoint, this may not be the best way to measure growth.
The way I see it, true growth in a dental practice is related more to an increase in profits, rather than an increase in new patients. Sometimes these two things go hand-in-hand, but I have seen too many dental practices begin to rapidly increase patient numbers only to find that their profits are remaining nearly the same, despite the increased time and effort they are pouring into their practice.
Think about it this way–what does it take to accept a new patient and care for them well over time? Large increases in patient numbers often lead to hiring new staff, purchasing more or new equipment and tools, and bigger...
This week we are talking all about dealing with benefit plans in your dental practice. You can watch the video here!
There are many coaches and consultants out there who specifically work with dentists to figure out how to deal with benefit plans. I believe that no matter what approach they’re coming from, they are all doing good, valuable work that can work for different practices. However, my approach comes from a profitability stance because the Profit First system is what I am trained and certified in.
I believe that any good business decision can be made only by looking at the data. It does take work to determine what data is really true data, but once you are able to determine what your cash flow is, you can begin to make decisions that will increase your profitability. To begin making good analysis of benefit plans and making educated decisions about how to deal with them, you need to determine if your cash flow is sufficient, and if not, how to increase it by...
This week we are talking about the production vs. profitability model of business, and why more production does not always equal more money in your own pocket. Check out my latest video here.
The dentists I speak with normally have a set number for annual goals of production that they hope will measure their overall business growth. While I fully support setting production goals, I wouldn’t choose production goals as the metric for growth and increased profitability. This is because I’ve worked with too many dentists who increased production but found that it did not result in more profit because as production increased, so did expenses.
That’s why you need to get clear on what “business growth” means to you. Is it a certain production number? Or is it a certain level of profit?
If you are hoping for greater profitability in your practice, I’ve found that using a Profit-First Model is the simplest and most effective model to boost...
Over the past few weeks of my “Business of Owning a Practice” video series, I’ve discussed the merits of technical training versus business training and how dentists can manage their debt. This week’s video is for the dentist who feels STUCK. Check out my video on this topic here.
Maybe you feel stuck in the chair, stuck having to do more than you feel capable of, and you can’t stop thinking about planning an exit strategy. Perhaps you’re feeling burnt out. Tired. Physically aching. Even though you were full of excitement and exhilaration when you started work or began your practice, now the daily grind is getting to you and you’re wondering if you can keep this up until it’s time to retire. If this is you, know you are not alone.
I personally think it’s never too early to start planning an exit strategy. Did you know that the average age of retirement for dentists in the USA is 69? That is 7 years later than the average...
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.
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...
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...
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...