Dentaltown September 2015 - (Page 12)

howard speaks column Know Your Numbers You know your profession. You know your staff. You know your patients. But do you know your numbers? You should! Think like a millionaire The only regret I have regarding my new book, "Uncomplicate Business," is that I gave it the subtitle: "All It Takes Is People, Time and Money." I should have chosen the subtitle: "All It Takes Is People, Time and Numbers," because money is just a form of numbers. There are many numbers besides dollars and cents that need a businessperson's attention. You didn't become a dentist so you could pore over reports, but you have to if you want to be successful and stay that way. Watch your accounts receivable carefully and don't take anyone's word about what things cost or how much money you're bringing in. Look into it yourself. Do spot-checks to confirm what others tell you. When you go into a millionaire's business, you'll find they know their costs. Now, you probably can't manage all the financial aspects of your business by yourself, and that's okay. Most millionaires I know say that by the time they had their first five employees, one of them was a full-time bookkeeper. That's how important the numbers are. However, those millionaires still know their numbers. Many dentists outsource their financial work to an accountant who basically just prepares papers for a third-party tax collector. Others hire full-time accountants and the dentist remains naïve to all numbers except employment costs. Do you know all your overhead costs? Do you know what you make per procedure? I like to run the following scenario by dentists: "You walk out of a room. You just did a $250 filling. You spent 45 minutes on it. Did you just make $30 or lose $30?" They almost never know. Do you know how much financial worth each of your staff members bring? I've had dentists say to me, "You know, I have one full-time hygienist and I'm thinking by Howard Farran, DDS, MBA, Publisher, Dentaltown Magazine 12 SEPTEMBER 2015 // dentaltown.com about adding another full-time hygienist. Should I?" Then you ask that dentist about the costs and it takes him or her an entire week to pull the numbers to show how much money each hygienist is making or costing. That kind of research is a lot better late than never, but it shouldn't be so far from a dentist's reach. Business owners should have an idea of how much financial value each staff member adds. The answer can be hard to measure, especially when you factor that person's customer service and how he or she affects productivity and team morale, but there are numbers that can help you figure it out and you need to know those numbers. Most millionaires I know say that by the time they had their first five employees, one of them was a fulltime bookkeeper. That's how important the numbers are. However, those millionaires still know their numbers. I strongly suggest that dentists use specialty accounting firms that only work with dentists. Some of them are so thorough they won't even take you as a client unless you come in at the end of the year and do a whole-day program with them. Breaking bad One of the worst financial mistakes you can make is to not know your break-even point. Consider hosting a meeting to educate your team on how much money you have to bring in to break even. Help your team members understand your overhead costs and what it takes to keep the business running. Help them understand how much business you have to do to provide, say, Christmas bonuses. Also consider starting each day with a staff meeting or a team huddle so you all get on the same page financially. At the team huddle, say something along the lines of, "Hey team, remember that we have to do $3,800 Continued on p. 14 http://www.dentaltown.com

Table of Contents for the Digital Edition of Dentaltown September 2015

On Dentaltown.com
Continuing Education Update
Industry News
Product Profile: Planmeca
New Products
You Should Know: Lean Dental Solutions
Practice Solutions: Ultradent
Ad Index
Dentally Incorrect
CONTINUING EDUCATION: Considerations for Treatment of External Cervical Invasive Resorption
Case Report: Microbrush Stamp Technique
Working Through Pain: How Chronic Conditions Affect Dentists
HOWARD SPEAKS: Know Your Numbers
PROFESSIONAL COURTESY: TV Shows for Dentists
Passivhaus: Dentists Get Their Green On
A Green Dentist in a Bluegrass State
NuSmile Preveneered SSC Tips
Yet Again, Immediate Molar— Drill First, Extract Later
Turning Over a New Leaf
The 5 Tenets of Practice Success
Understanding the Sjögren’s Patient: Facilitating Diagnosis of Sjögren’s Syndrome
Sleepy Hollow Dentist Wants to Make a Change
Seeing the True Resorption Picture
Oral Squamous-Cell Carcinoma Detection
Solutions for Effectively Managing a Dental Offi ce
Seminar and Travel Pay: It’s No Vacation
Insurance Management is Easy if You Start with Evaluation

Dentaltown September 2015