I have recently started working with a new client who asked
me to work with them because they were struggling financially. It was not so
bad that bills could not be paid on time, there was insufficient cashflow to
give them the freedom to make decisions about investments, courses, training,
team development etc.
Before the client invited me to work with them they had introduced
an hygienist to the practice for the first time The hygienist made a big impact
on the dental health of the patients and within a short period of time her book
had become very full, and additional hygiene support was required.
One of the triggers to engaging me was that the principal
had been led to believe that the hygienist as well as freeing up dentist
clinical time, should also have been a profit centre and they did not understand
why the practice finances felt tighter.
My client had acquired the practice 12 months previously, it
was beautiful, the type of practice associates dream to work in. Full private
list, exceptionally well equipped, digital scanners, well trained dentists who
have done post grad training all over the world, quality materials, in a
spacious clean and attractive building, with a long serving support team who
share the vision of the practice.
During our sessions together I discovered that the principal
had set the hygienist, and other fees, by comparing against local practices. The
principal did not have their finger on the pulse of the practice finances The
budget had been created to raise finance, once the purchase was complete, they had not been looked at again. The principal was unaware of the income, costs,
working hours, target gross incomes, target hourly rates, what being achieved.
KPI’s were a mystery.
I asked my client to create a 12-month budget, making it as
easy as possible by supplying personal and business budget templates. Unfortunately,
for several weeks, despite setting their own accountability targets for
creating budgets they were not completed; lack of time, distraction by other
pressing matters and clinical demands were most often cited.
With my help, the budget was completed based on the previous
years’ figures and the future development plans. I then helped the principal
calculate the fixed hourly costs of running each surgery. At this point the
principal understood why they were feeling a financial squeeze and we were able
to change the hygienist packages to a value based service rather than a commodity,
altering the language used by all team members especially clinicians regarding
hygiene care and set the fees correctly.
Now the hygienists pay their way, generate profit, improve
and maintain the dental health of the patients.
More importantly my clients’ budgets are a live document
that is referred to frequently, especially at Monthly Financial Review Meetings
(MFR), is consulted before any decisions are made. The budgets have become part
of the navigation system for the short and long-term pans for the practice,
giving the principal the confidence, freedom and control they were looking for.
My top tips
- Reassure yourself you are not alone, many dentists have financial challenges and they can be overcome.
- Prioritise and protect the time you need to care for your business
- Create a budget, refer to it frequently
- Know and share the figures, income, costs, etc with all your team
- Ask for help early and accept it when offered
- Never use comparison with other practices when setting your fees
- Make treatments a valuable service not commodities.
If you would like to know more about the support we offer
principals contact us Jane@IODB.co.uk or
07989 757 884.
Your success is my business
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