We know a lot of dental professionals who like to spend their free time enjoying the outdoors when they are not seeing patients, which is why it may be helpful to bring some of the lessons you learn on the trail into the office. Take the growth of your dental practice, for example. It’s easy to get trapped into believing that you have to take on more patients to be more successful. But, if you’re not careful, more patients can actually hinder your growth in the long run.
Stay Out Of The Rocks
Have you ever been white water rafting? When the water is high, you glide effortlessly through the river, expertly navigating the bends and slicing through the current – it’s exhilarating. Flash forward a few months later, after the water level has dropped, and it’s a completely different story. Where it was once smooth sailing, you are now confronted with a scattering of rocks, boulders, logs and branches. Your ability to progress through the course takes a hit.
Your revenue is like the water level in this example. When it’s high, it hides a lot; but when it’s low, problems begin to reveal themselves. Unfortunately, some dental professionals believe that the best way to fix their problems is to add more revenue. What they don’t realize is that this tactic is simply masking the real problem.
If you want really want a financially healthy practice, you can’t rely on revenue growth to solve your problems.
Healthy dental practices are ones that are able to generate healthy cash flow. One way to do this is to tighten up your billing strategy. Oftentimes, business owners will only focus on their monthly revenue and forget to consider how long it actually takes for the money to roll in. Even though your practice’s revenue looks great for the month of July, it could be September (or later) before you actually get paid. In the meantime, you are stuck playing the waiting game.
Instead of looking for more patients to cover the difference, give yourself permission to starting thinking about your practice from a much smaller scale. Get rid of the extra baggage that’s holding you down. Revenue doesn’t mean a whole lot unless you have the cash to back it up. To that point, it may be time to stop accepting patients who aren’t prompt when it’s time to pay their bills. Instead, be more selective when choosing which patients you will see.
What’s Holding You Back?
It can be a lot of work to identify what’s holding you back and sometimes you need to look at your practice from a different perspective, some dental professionals find great success simply asking for help from an outsider. There is no one-size-fits all solution. The best way to take control of your business is to work with a trusted advisor.
A great place to start is by listening to Episode 10: The Revenue Sin from Unsuitable on Rea Radio to learn more about business health and what you can do to strengthen your cash flow. When you are done, you are welcome to click here for additional resources.
Do you have a question you would like us to address on Unsuitable? Send it to firstname.lastname@example.org and let us know what issues are challenging your business. We could feature your question on an upcoming episode of Unsuitable or in a blog post.
You can also email your Bright Dental CPA for assistance or to learn more about how you can increase your dental practice revenue.
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