As we are coming to the end of the quarter, we are starting to think about next quarter, what we're going to be doing for both our practice and personal lives. This is important because, while many people plan in their practice, we must alo plan in our personal lives to achieve success.
As you plan your new year, working not just on building profits but also improving cash flow and time management can open many doors for your practice and your personal life. At the end of the day, we're here to serve patients, but we also want to make sure that we are taking care of ourselves so we can better take care of our families, our teams, and our patients.
To achieve that ability, we must all do three things, in addition to setting profit goals, identifying new services, or technology investments. To put together the best plan for a profitable new year, you must do the following three things as well.
Save for a rainy day.
It’s really important that every practice has a rainy day fund in case of an emergency. You never know when something is going to affect your practice. Having a rainy day fund can save your practice from temporary disasters or get you through a tough time.
During the time of coronavirus, I spent time working with practices to make sure they understand profitability and planning, especially with cash flow. I made sure they knew what their profits and expenses were and that they created a budget that includes emergency savings.
When coronavirus hit my personal practice, I was fortunate enough to not have to lay off any team members. One of the reasons was because my practice had emergency savings. Like other practices, we were closed for several weeks, at least for non-emergency services. But I was able to continue to pay my team. And that gave me a lot of peace of mind. It helped with my anxiety of what I was going through as a business owner. Without rainy day savings, it would have been hard, if not impossible.
Budget your money well.
I was recently speaking to another doctor and she was sharing how her practice is growing, and she was able to go ahead and invest in adding in a new operatory, all cash, and also purchasing a new piece of equipment, a scanner. She didn’t need to borrow, because she budgeted well.
When you budget, you have to be a little bit more patient when it comes to new projects. Saving up to save for expenses instead of just borrowing more takes a lot of discipline. Over time, making smart investments without borrowing as much helps you save interest charges and generate more stable revenue. You might not grow revenue as fast but you can often grow more stable profits and not end up in a challenging time if revenue slows down, because your loan payments don’t stop. Take a look at the investments you want to make this year and set aside money for those expenses every month.
Make sure your systems are in place.
Systems streamline processes. If you don’t have systems in place, adding them can make a big impact on your practice. One area where systems make a big impact is in marketing. Marketing systems make you more consistent and give you better data to make consistent improvements.
One system we really love is this process of what we call “creating rocks.” This is part of what we teach in terms of the entrepreneurial operating system, or EOS. Rocks are the tasks you want to complete within the next 90 days. Perhaps your “rocks” include improving your marketing. Maybe you've made a decision that you want to update your website. Whatever your rocks are, write them down and put a plan (and budget) in place to make them happen this year.
Another area where systems are critical are in tracking performance. Maybe you will use your daily whiteboards in your morning huddle to improve performance. Or maybe you will implement scorecards where you can weekly look at production collections. Or you could start tracking the number of unscheduled patients that are rescheduled. Whatever you need to improve, put systems in place to make consistent improvements.
Are you ready to plan for a profitable new year?
Plan ahead to make sure that next year is as profitable as can be. Make sure that you are saving for a rainy day, budgeting well, and making sure your systems are in place.
If you want help, join our free Facebook group for dental bosses. In of that group, you will be able to mastermind and share with dentists and team members. And if you’re looking for training or coaching for your team to accelerate your growth, click here to learn more.