DentaltownUK October 2017 - 37

I remember visiting the bridge of a cross
channel ferry on a friend's stag day, this
was in the period when the stag celebration
was longer than a night but hadn't reached
weekend status. We set off from Dover
heading for Calais and a long lunch, and
then someone knew someone who got us
on to the bridge.
Apart from the fantastic view, what
impressed me was the use of computer
navigation predictions. These took the current
velocity and position of our ship and all the
other ships in the channel and predicted their
future positions and the risk of collisions if
courses were maintained. As the navigation
officer explained it was a lot easier to make
a slight adjustment sooner than have to try
to make a massive one later.
Most accounting systems are great for
telling you where you have been, which is fine
for tax accounts but not so good for telling
you where you are heading. You can't drive
if all you use is the rear-view mirror.
Cash flow is the key to survival and
success, and any system which fails to predict
and monitor cash flow and will not let you
establish and manage budgets will make life
and survival more difficult. So I will frequently
get a client to stick to a well-formatted
spreadsheet before getting involved in any
more complicated systems.
If I have to make just one argument
for using budgets in any business, it is "to
anticipate, understand and take control of
your direction". One problem with dentistry
is that historically the business model was,
"patient presents with a problem, and dentist
fixes it". This implies that we are dependent
on the misfortune of others and their disease
process for success. This may have succeeded
when dealing with a population with rampant
and uncontrolled caries at a time when costs
were lower but will only lead to a crisis now.
Many are similarly reactive in their
business management and I still meet dentists
who sail on, presuming the wind is taking
them in the right direction and hoping that
the month will run out before the money.

These individuals often survive with half of
their lives in the red zone of an overdraft,
hanging on by robbing Peter to pay Paul.
Survival is their way of life, micromanaging
and counting the days.
For success, a proactive approach brings
greater and more predictable rewards. One
element of this is the use of a budget as part
of your business planning. "A budget is a plan
to control your finances," says James Caan.
If you don't have a detailed and routinely
monitored business plan then I would remind
you of the words of Sir John Harvey Jones,
"The nice thing about not planning is that
failure is a complete surprise."
Most businesses at their start up and
before any expansion or significant change will
be expected to do some financial forecasting
to show a potential source of finance that
they will be able to afford to repay any loan.
It gives the message that the borrower is
responsible enough to have considered the
future. Unfortunately once the loan is in
place many revert to "hope for the best"
mode, especially if their predictions turn
out to have been somewhat optimistic in
the face of reality.
At a time when many practices are, or
should be, considering their options regarding
commitment to the NHS taking a long hard
look at what changes you could make and
what fees you would need to charge can help
to clarify your decision.
However phrases like business planning
tend to make many dentists hurry off to seek
the distraction of teeth muttering, "I didn't
train to run a business I'm a dentist and to
look at such things is distracting me from
my patients." The objections continue, "It
takes too much time, life gets in the way
and I feel disappointed when we can't stick
to the plan, healthcare shouldn't be about
setting targets, it makes me feel controlled".
On the contrary using budgets gives you
control, vision and saves time. By comparing
the truth with the imagined you are able to
measure your (financial) progress towards
your goals. Indeed a budget is the only way

dentaltownuk.com \\ OCTOBER 2017

37
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Table of Contents for the Digital Edition of DentaltownUK October 2017
