I’m a Recovering Perfectionist!
However, perfectionism doesn’t really exist! Being hard on yourself because you’re not perfect is just wrong. I am a person who strives to make things perfect and what I’ve learned is this is a big ol’ Rabbit Hole! It’s never ending! And it's never going to be perfect.
So instead I’ve changed my mindset to be one of ‘Doing my Best’ rather than thinking it needs to be perfect. It’s so easy to get caught up inside the mind replaying conversations and actions.
With Profit First I’ve found many dentists think everything has to be perfect before they can get started. And that’s just not true. Waiting to begin only puts you behind on the increased profits you’re going to realize. Why would you want to wait on that?
Dentists tend to be analytical people. They like to check, and re-check everything before making a commitment....
Once you have taken stock of the debt situation you are in, it’s time to make a plan for Debt Reduction. In order to pay down your loans quicker, you must have additional cash flow (profit) in the business.
The Profit First model is great for this because you are already setting aside money in the Profit Account. Once you really get a handle on the overhead it’s simple to put more in the Profit Account.
The Profit Account is used for quarterly distributions to the owner doctor. Remember, this is the pay for doing dentistry in the practice. The Profit Account may also be used to pay additional principle on any business loans or credit card balances.
When you decide to use part of the distribution for debt reduction, the owner will now take less in distribution for personal use. For example, the typical owner distribution would be 50% of the Profit Account deposits for the quarter but with focused debt reduction, the owner might...
Dentistry is an expensive profession. It’s costly to go to dental school. Then to either open or purchase a practice is another significant investment. It’s very likely that debt will be incurred in this process.
Most dentists I work with are still paying on debt. These monthly payments can become drudgery in a short time. It can seem never ending! And on top of practice debt, there’s personal debt. Whew! The pressure to produce is real.
With the profit first model, debt can be factored in when considering profitability. What I mean is this. A portion of the Profit Account distributions may be used for some additional debt reduction if that is the goal of the owner. A system may be put in place with a plan to eradicate debt sooner.
First, begin by taking stock of all debt. What exactly are you paying out in payments every month? What percentage of collection is this? Is any of this bad debt, like credit card debt that...
If you think about your dental practice, I’m sure you’ll find you have a daily rhythm to things. Most of us would say we have personal daily rhythms as well.
We tend to rise and start our day very much the same from day to day. The rhythms of our life provide an unwritten structure that actually then perpetuates the rhythm to continue.
The same is true of your business, your dental practice. When implementing a pattern of behavior in a rhythmic cycle, we are much more likely to continue to take action. Taking action is where the magic happens with Profit First.
A weekly rhythm of allocations and transfers seems to work best for a dental practice. Income flows into the practice daily and then once a week, it’s time to allocate by percentage and transfer money to the additional bank accounts set up for a specific purpose. Those accounts are for Profit, Owner’s Compensation, Taxes, and Operating Expenses.
As money flows into each account, it is...
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...
Today, we’re going to talk about organizing your money. First, I want you to think about how you organize things in your home or office. If you’re anything like me, you like all the little drawers and compartments to be perfectly organized with everything in its place. Personally, I like to put my dress clothes in one area of the closet, my workout clothes in another, etc., etc. My kitchen is also very organized. When I want to use a certain utensil or cooking pot, I know exactly where to find it. It’s gotten to the point where I don’t even have to think about it; I know where everything’s at!
Similar to my bedroom and kitchen, I also organize the money within my business and I do that using Profit First. I know how much is in each bank account and the purpose of that money. You can do the same for your dental practice finances by using the Profit First principles. It’s all about getting your money organized and having simple...
Today I’m going to share something very important for you, your business, and your patients. Your patients need you to be profitable. To be profitable means to be successful, cost-effective, and fruitful. If you are profitable, you can relax and not have to worry about your money. You can focus your energy on taking care of your patients, which is the primary goal of your business. You still need to pay attention to your money but it is different when you’re not carrying that stress or worry. Your patients will be able to tell if you’re stressed or not by how you behave. When you’re stress-free, you can perform your best.
Are you looking for a stress-free business lifestyle? That’s where Profit First can help; it gives you the plan to ensure there is profit with every deposit. Profit First helps you to manage your money in just a few minutes. It was designed to help dentists like you manage your company financially so that you can be at your...
I’m here today to show you how to pay down your debt faster. First, you have to take stock of the debt you do have and categorize it into categories called “good debt” and “bad debt.” Bad debt is high-interest debt like credit card loans, lines of credit, and student loans. Good debt is real estate loans or private practice loans. These loans are for a longer time period and have better interest rates.
Now, you have to decide which bad debt you’re going to eradicate first!
Also, make sure you have a profit savings account and that you’re allocating a percentage to each week. I have a video on YouTube that can help you if you’re unsure of how to do this! The best way to handle this is to stretch yourself as much as you can handle. It would help to financially plan out each month so that you’re able to take care of yourself while tackling that debt. Bad debt is what you want to go after first because of the bad...
When you want to tell a patient about the state of their oral health, what do you do? Most dentists use a disclosing tool to tell patients the truth about their oral health because these disclosing tools are designed to help the patient understand what exactly is going on and then take control of their dental health.
It’s pretty common sense to most of us that patients really do want to know how their oral health is–even if it is poor–because they want to be able to find solutions and get healthy again. However, many dentists are afraid to go through the work of assessing their practice’s financial health, because they don’t really want to see the truth. They would prefer to keep their heads in the sand, even though they long for more profitable outcomes. This is where the profit first for dentists model comes into play.
I know that it can be nerve-wracking to turn on the lightbulb and see what’s really going on financially...
How would you answer the question, “Why isn’t my dental practice profitable enough?”
Many people would say the reason they aren’t profitable enough is that they aren’t growing enough. This is a natural assumption, but I would argue that equating profits with growth is an old formula. To truly grow your profits you have to know your profitability. When you have no idea what your profitability is, however, or what services or benefit plans you provide that are profitable–that’s a problem.
The solution? Take your profit first.
You need to operate under a new formula of Sales - Profits = Expenses, instead of Sales - Expenses = Profits. This new way of doing business will challenge you because you have to totally rethink how you’re doing business, but the challenge will be worth it in the end. You’ll need to be resourceful, honest with yourself, and ready to stop doing things that aren’t helping your profitability. But when you...