Profit First for Dentists

Principle number 3 of the Profit First for Dentists system is to remove temptation.

Once an entrepreneur begins to fund the Profit Account and the Tax Account, money will begin to accumulate.  Over time as this cash grows, it might be tempting to want to use it all and plow it back into the business.  Please don’t do this!  This action of plowing back into the business all your profits will actually cause the overhead to go way up and it totally defeats the purpose of the Profit First method. 

If you find yourself tempted to use the money in the Profit Account or the Tax Account when the Operating Expense Account gets a bit low, then determine straight up that having the No Temptation Accounts will be your friend.  The No Temptation accounts are established at the bank across town. The No Temptation Accounts hold the money in the Profit and Tax Account in a place that is more difficult for you to access.  This is a no frills Savings account...

This is number six blogpost in this series The Business of Owning a Dental Practice.  If you haven’t read the first five blogs in this series, please take some time and check them out. 

Todays topic is all about dealing with Benefit Plans.  I know this is such a hot topic these days.  There are specific coaches and consultants out there who’s sole mission is to help dentists get completely out of these Benefit Plan contracts and others who help dentists increase the payments they receive from the insurance companies, and yet others who help with efficiencies and team training.  Nothing wrong with any of these approaches and in fact these consultants do good work. 

My approach here will be purely from a profitability perspective because that’s what I do. I believe good business decisions are made from true data.  It takes some work to make sure the data you are analyzing is true data.  It’s only true if the...