Although most of us aren’t happy when tax time rolls around, it does provide us with some potential benefits. In addition to the possibility of a nice little refund, tax time gives you a great opportunity to assess the health of your dental practice as a business. Think of it like the regular checkups you recommend to all your patients: it’s important to assess the health of business not just to find problems, but to identify risks before they become problems.
Here are some of the key things to look at when you assess the health of your business, and consider whether consulting could help improve its health.
Are You Properly Organized?
One thing to look at is whether your business organization is costing you more in taxes and potentially exposing you to greater financial liability. If you don’t have your dental practice organized as a corporation, it’s time to consider whether that could reduce your tax burden and potentially protect your personal assets from business risks.
Don’t forget: it’s critical to keep business and personal expenses and assets separate. If you do make loans to the business, make sure they’re properly recorded so you can get paid back.
Are You Paying Yourself Enough?
Tax time is a great time to look at the bottom line. We’ll get into the business part of that in a moment, but first, let’s consider your personal bottom line. Chances are that you went into dentistry with a sense of the lifestyle you would enjoy. If you’re not enjoying that type of lifestyle, it’s time to ask why.
Many dentists start out accepting lower compensation initially to help the practice “get off the ground.” Unfortunately, what started out as a short-term arrangement can become very long-term or even permanent if you’re not regularly assessing your compensation. Make sure you’re not caught in this trap. If you are, it’s time to see what you can do to pay yourself the salary you want and deserve.
Are Your Expenses Too High?
Of course, in order to be able to pay yourself the salary you deserve, the dental practice needs to be successful. That means that you need to be making a good profit.
The biggest suck on profits is having high expenses. Fortunately, it’s also the easiest to combat. You control your expenses, and you can adjust them. Learn to be more efficient with supplies to control waste. Cut out unnecessary expenses, and look to save money on the vital expenses. One way to save money is taking advantage of our strategic partnerships. These allow you to take care of vital business operations in your dental practice for less.
Also evaluate your CE choices. Some CE is necessary to maintain your license, but CE chosen just for that purpose is a wasted expense.
Is Your Revenue Too Low?
Another thing that could be holding down your profits is that your revenue could be low. Trying to increase your revenue is trickier than controlling expenses, though: you can’t simply make a decision and automatically see revenue increase. However, there are some things you can do that will tend to increase your revenue.
First, assess your clinical technique. If you’re regularly having to do revisions, that’s lost revenue. Work to improve at the troublesome procedures or stop providing them.
Assess the types of patients you are bringing in and the services you are providing them. Can you upsell your current patients? If not, why not? Sometimes, it might be necessary to try to attract different patients, but other times, it’s a matter of increasing case acceptance. And maybe you need to offer more high-end services in your practice. Expanding and improving your service offerings is a great way to spend your CE dollars.
Is Your Marketing Doing Enough?
Take some dedicated time to evaluate your marketing when you look at expenses and revenue. If your marketing isn’t reaching the right kinds of patients or isn’t bringing in enough patients, it might be time to reconsider what you’re doing. Do you need to modernize or refocus? Is your current marketing company up to the job you want them to do? Is your practice fulfilling the promises your marketing makes?
Reassessing your marketing can help both reduce expenses and increase revenue.
Need Help Assessing Your Dental Practice?
Hopefully, you’re already doing these types of regular assessments, or, if not, you feel you can do them. However, if this seems like an impossible task for you, maybe it’s time to hire a consultant. A consultant is an especially good choice if you’ve tried to assess your business but couldn’t make any improvements.
If you are looking for a consultant to help improve the health of your dental practice, please call (858) 349-7996 today for an appointment with Dr. Shahin Safarian, dentist and consultant.