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a blog by Chris Barrow

A clear and present danger

You will have noticed recently an increase in the number of these posts that are examining the finances of dental business.

I've been talking about Key Performance Indicators (KPI), Operating Cost Per Surgery Per Day (OCPSPD), average daily yields (ADY), associate profitability, splitting dental plan payments between practice, associate and hygienist, splitting FTA/DNA fees - the list grows.

These posts are prompted and inspired by conversations I'm having with my clients on a day to day basis.

The increased commentary is a direct reflection of the fact that many more members of The Extreme Business 100 community are asking me to help them analyse their own numbers. Because they are worried.

And no wonder.

  • Variable expenses up (lab and materials);

  • Operating expenses up (day to day running costs);

  • Wages up (and more demands arriving);

  • Cost of servicing debt up (albeit easing);

  • Self -employed clinicians asking to be paid more (for doing nothing extra).

Which reveals the crushing logic that the only way to maintain profit margins is to:

  • Increase average daily production;

  • Increase prices.

And there's the rub.

Clinicians increasing their average daily production? That's a big ask for the majority.

Patients paying more for their dentistry? Many clients afraid to ask.

So the "clear and present danger" mentioned in my title is what happens in the event of either:

  • Not looking at the numbers (ostrich/sand) or

  • Looking at the numbers but not taking action (rabbit/headlights).

Thankfully, I'm banging the drum so often on this with my own community, that they are looking (at least that's step 1) - but getting them to take the action? That's another story.

Necessity is, as ever, the mother of invention and when you can't make payroll because there's no cash in the account, the motivation to keep count more accurately and to analyse becomes more important.

In my 31 years dealing with dentists, I've never done as much financial analysis, perhaps with the exception of the post-lockdown period.

This is keeping me very busy - and yet I recognise that the financial emergency is affecting many more besides my client base.

It is heartbreaking listening to a business owner in tears on a Zoom call, describing how they haven't been able to sleep with worry and exhaustion - I'm wondering how many others out there felt the same?

I'm considering a free of charge series of webinars (rather like those famous Facebook Live broadcasts during lockdown), in which I take the audience through all the steps necessary to understand their finances, develop the skills to analyse the numbers and the confidence to take remedial action.

This idea occurred to me during an informal supper with clients last Thursday in Bristol.

Over the days ahead I'll be thinking about dates and content - we will build a landing page, open a free registration system and see what happens.

My question this morning - if I ran a free live webinar series on "Getting your Finances in Gear 2024" - would you (Owners, Managers, self-employed clinicians) be interested?

No catch, no sales pitch - just a helping hand.

Please drop me a comment or email if you think it's a good and timely idea.

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1 Comment

I would love to watch these

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