Debt holding you back? Get your finances under control with these tips.
You likely have a list of technology you’d like to purchase to improve practice efficiencies, and upgrades you’d like to make to enhance the patient experience. Unfortunately, if you’re struggling with debt, you have no idea how you’ll ever actually pay for the items on your wish list. You can barely handle the bills you already have, and you’re worried you’ll never be able to crawl out of this financial hole you find yourself in.
Debt holds many practices back, keeping talented dentists from meeting their full potential. These dentists are constantly stressed and worried about how they’re going to pay the bills, rather than focusing on growing their practice and their bottom line.
Yes, this is a common problem but one you can overcome. Here are a few tips to help you get your finances under control so you can finally start reaching your professional goals:
Pay attention to your systems. I can’t emphasize this enough. Weak systems contribute to your financial burden. Strong systems make you more efficient, which also means more productive and profitable. Unfortunately, many dentists don’t understand this, so they neglect their 20 practice management systems.
Don’t make this costly mistake in your practice. Take the time to get to know your systems and how they work. Monitor them for weaknesses and flaws, and address any issues that come up before they eat into your profits. It takes some work, but when your systems are running at maximum efficiency, you’ll see a reduction in your debt load and an increase in practice revenues.
Understand your practice’s financial situation. I know you didn’t become a dentist because you wanted to be a small business owner, but a small business owner you are. That means you have to embrace your role as practice CEO and the business side of running a practice. To be successful, it’s vital for you to understand your finances. I suggest you start by conducting a cash flow assessment in your practice.
What exactly does that mean? First, log the numbers for net production and collections over the last 12 months, the percentage of accounts receivable over the last 90 days and total monthly payments you made to loans, business cards and leases. Once that’s all done, look at the average monthly payments made to the lab, dental supplies, salaries, monthly facilities costs, taxes and benefits, along with all your miscellaneous expenses.
After you go through this process, you’ll have a much better understanding of where your money goes each month. That’s key to successfully managing debt.
Bring in a consultant. Now that you have these numbers in hand, you’re probably wondering what to do with them. I suggest you hire an outside expert to help you figure that out. McKenzie Management has financial experts who can give you guidance based on what your numbers say about your practice. Your expert will come up with a plan to free you of the debt that’s been holding your practice back.
What will this professional recommend? It depends on your situation. Consolidating loans and refinancing them at a lower rate might be the best option for your practice, or maybe buying the space you’re practicing in rather than leasing will help. There are a variety of changes you can make to ease your debt burden—there isn’t one solution that works for everyone. If that existed, there wouldn’t be so many dentists struggling with money issues. The expert you hire will be able to see what changes are best for your practice, and can then guide you to financial health.
An experienced consultant also can help you fix your broken systems. A consultant can take an objective look at your systems and really see what’s going on, and then pull from his or her experience to offer you the guidance you need to get your systems in working order.
Get your team on board. Overcoming debt isn’t easy. It takes commitment from everyone in your practice, which is why your team should be part of the process from the beginning. Involve them in developing the plan for change, and make sure they understand why making these changes are so important to the practice’s future. Let them know it not only benefits the practice, but them as well. They’ll become more efficient and less stressed, making their days in the office much more rewarding and enjoyable.
Many dentists struggle with debt and have no idea how to deal with it. Money problems can quickly grow out of control and become everyone’s focus, but it doesn’t have to be that way. If you make a commitment to determining what’s causing your money woes and then make the necessary changes, you’ll finally get your finances under control. Debt will no longer dictate what you do, and you’ll be able to enjoy success as a dentist.
Need more guidance? I’m happy to help. Contact McKenzie Management 877-777-6151 and we’ll work together to get your debt under control.
Interested in speaking to me about your practice concerns? Email firstname.lastname@example.org