Manage Your Money
Tip
Tip 22: Manage Your Money
Money, like emotions, is something you must control to keep your life on the right track.
- Natasha Munson
Money cannot buy time.
- Lailah Gifty Akita
You already know how I feel about energy. To your practice, money is energy. My suggestion is to watch it very carefully. We already know how I feel about managing people, so it's best to create money management policies that do not depend on the whims and wills of mortals. How can that be done? With systems, of course.
Early in my practice I was out of control with money. Today's dentist has a much more difficult time. When I started, wages were much less, benefits weren't the norm; equipment and supply choices were limited. Today with the growth of digital technology, it is hard for the young dentist to say no to the new toys. Filling a practice with lasers, digital radiographs and CT scanners, among the more popular, is very tempting. After all, the dentist must keep up, correct? Well not if the dentist can't survive practice.
I certainly understand the benefits of all the new technology, but they aren't critical to the survival of a practice. Yes, there are patients who will only go to "cutting edge" practices, but those numbers are small compared to patients who appreciate other qualities like dependability, reliability, empathy and certainty that the dental practice can actually do the job correctly. Those things won't cost the practice any money, but will go a long way in building a practice. When the time is right, then indulge.
How do we know when the time is right? With a budgeting system. This is one of the most important financial policies and systems a practice can develop and put into place. Because this is a "short guide," it is beyond the scope of this book to give the details of a budgeting policy. One thing to include is the various expense categories in a dental practice and to watch them on a monthly basis. The seven categories are:
- Labor (Doctor and Staff)
- Occupancy
- Physical and Human Resources
- Supplies
- Laboratory
- Marketing
- Administrative
Test it. Everything in your checking account can be placed in one of those categories. Every category has the potential to have a separate policy and system. For example in our practice we have a supply officer who runs our purchase order system. We have someone in charge of marketing and janitorial. The point is that a practice only has so much energy in the form of money…guard it carefully.
Another area even more important than equipment is continuing education. This is usually a place where dentists skimp. They would rather have the latest technology than take a course or pay for a coach. These expenses can be budgeted…saved for, and they will probably give the highest return on investment. Yes, even better than a laser.
Keep the end in mind. Always keep your vision in front of you. Most dentists go into dentistry with an endgame. How many years will you work? What will your retirement look like? Most dentists (and people) don't prepare properly. Money management systems hold the answers to these questions.
Another area to think about is time management. How you spend your time is instrumental in helping you create PERMA…your well-being. How engaged are you on a daily basis? Time management systems go a long way in helping to create a positive mindset, engagement and meaning. The next tip will reveal another set of systems that can help more than most people think.