Is Debt Holding Your Practice Back?
When I start talking about debt, most dentists shut down. They’ll try to change the subject to just about anything else, whether it’s all the broken appointments wreaking havoc on their schedule or the weak case acceptance they’ve experienced over the last few years. Talking about debt simply makes most dentists uncomfortable, but I’m here to tell you that ignoring it certainly won’t make it go away. In fact, it likely will only make the situation worse.
The sad truth is, most doctors are between $300,000 and $500,000 in debt. It’s no wonder they don’t want to talk about it, that’s a lot of money! Where does all this debt come from? Business credit cards, equipment leases, lines of credit, loans, mortgages, the list goes on and on. In some cases, debt comes from the cost of doing business, but in others it’s simply poor financial management.
If debt is holding your practice back from meeting its full potential, it’s time to make some changes and start reducing your monthly financial obligations. This might seem daunting, but it is possible. And I’m here to help.
First, you have to understand why debt has become such a problem in your practice. You may not want to admit it, but a large part of the problem is likely weaknesses in your business operational systems. If you’re like most dentists, you got locked into a pattern of running your practice management systems early in your career, and haven’t looked back. The problem is, if you never update or improve your systems, they’re likely producing lackluster results at best, and are only contributing to your growing debt and overwhelming overhead. Essentially, these shortfalls are keeping you from creating the successful, thriving practice you’ve always dreamed of owning.
You can’t do things the way you’ve always done them and expect different results. If your systems are underperforming, that isn’t going to change just because you want it to. Remember you have 20 practice management systems, and you need to know all of them inside and out. These systems directly affect your practice’s success and profitability, and contribute to your debt when they’re mismanaged.
When you have efficient systems, your profits will rise. In fact, when practice management systems are running at maximum efficiency, the typical practice can expect to increase revenues significantly within 60 days. Just imagine what a jump in revenue could do for your practice.
The hardest part about reducing debt is realizing you need to make real change in your practice to make it happen. Most dentists want to get their financial obligations under control, yet they can’t wrap their heads around all the changes they need to make to be successful. You have to dig into your practice management systems to determine what needs to be fixed, and then make changes that will improve your daily operations and ensure you don’t find yourself drowning in red ink again. It may not be easy, but it’s certainly worth it.
Let me leave you with a little inspiration. I recently worked with a doctor, let’s call him Dr. Pete, who was struggling to get his debt under control. Dr. Pete had been practicing for more than 20 years, but instead of enjoying success and profitability, he was writing checks totaling $8,000 each month, with all that money going toward practice debts. Overhead was pulling him under, and he was frustrated.
He knew he needed to make significant changes to his practice if he was ever going to be free of his debt obligations. With help from McKenzie Management, Dr. Pete has reduced his debt to $5,000 a month, and has begun the process of overhauling his practice management systems. Once he’s done, his profits will grow considerably, and he’ll finally have the successful, profitable practice he’s always envisioned.
Dr. Pete is proof that you can reduce your debt and grow your practice revenues. If you’re struggling with debt, now is the time to take a look at why, and determine what you can do to reduce those monthly financial obligations and start growing your bottom line.
It will take a real commitment to fix what isn’t working in your practice, and you have to be honest with yourself about your system shortfalls. Yes, that can seem intimidating, but remember you don’t have to do it alone. Contact McKenzie Management and we’ll help you break free of your debt so you can finally enjoy practice success and profitability.
Next week: Reduce your debt with these three tips.
For additional information on this topic and more, visit my blog: The Lighter Side
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