THINKING BUSINESS
a blog by Chris Barrow

Money Monday – Teamwork in financial management

Back in the 1920’s, my maternal grandparents Albert and Ellen Mellor were very simple working class folk in Ashton-under-Lyne, Manchester. Albert worked as an engineer at the railway yards across the road. Ellen was a homemaker, with two children, William and Norma (my Mum). Albert came home on Friday night and placed his wages on the dining table in their “two-up, two-down” terraced house on Gorton Road. Ellen placed the requisite amounts into a row of jam jars marked “rent”, “coal”, “food”, “clothes” (life then was simple). What was left was given back to Albert. When William started work in December 1941, his wages were added to the table. So too my mother. They used to say that the difference between a good and bad husband at that time was whether they went to the pub before or after they went home on Friday. Albert was a life-long tea-totaller and the family never had a problem financially as a result – they lived a meagre but very happy life. The family were used to the Friday night jam-jar ceremony and understood where the money went. It seems that Dental Principals fall into 2 camps:

  1. those that share little or no financial information with the team

  2. those that share almost all the financial information with the team

I want to talk to the former about the latter. The latter will confirm that a team who are educated and informed on how money moves through a business are likely to become more:

  1. responsible in the way that they spend it and

  2. enthusiastic about collecting it!

The reality in modern dentistry is that team members are used to seeing substantial funds transferred into the business by cash or credit card. In fact, many/most practices still ask patients to pay at the front desk. Those who bemoan dentistry becoming a retail business might ask themselves what difference there is between paying for dentistry whilst standing in a public place and for groceries at a supermarket till? One could argue that a difference between retail and professional services is where and how you pay.. If I had to swipe my card for my accountancy services, a legal bill or a medical examination by a hospital consultant at their reception, I might consider that those organisations were no longer professions as well. When I see my physio or podiatrist I pay at reception – its retail. Dentistry is a retail business – offering products and services to a high professional standard that is nationally regulated. But – and this is an important but – when a customer pays £200 for groceries at a till, the assistant doesn’t think “bloody hell, I bet the Sainsbury family are going to have a good weekend on that.” However, when a dental receptionist swipes a card for £500 of treatment, does she think “I bet that will make the boss happy this weekend”? I think they do – and that the problem becomes exacerbated, the larger the cheque. Leading to a number of dangerous assumptions:

  1. the boss is loaded and so are the associates

  2. its OK to spend money on supplies

  3. we don’t need to check invoices too carefully

  4. when do I get my next pay rise?

So….. You have heard me mention before the £100 experiment:

  1. place 100 £1 coins on a table

  2. create places/boxes/post-it notes/envelopes/ jam jars(?) for all your main items of expenditure

Include variable expenses such as lab, materials, payments to clinicians. Include the main fixed expenses – staff, property, utilities, marketing. Don’t forget to take some coins out for next year’s business development plan. And – for the taxman. Ask your team to guess how many coins should be placed in each pile. At the end of this I guarantee there will be raised eyebrows for two reasons:

  1. the team don’t realise how much things cost

  2. the team don’t realise how much is left for the owner at the end of each £100 (usually between £7-17)

Its a great way to introduce an element of transparency without giving the game away on individual earnings. It will make your team see your business in a different light – and to then report back to them monthly on performance against targets for income and expenditure will give them a higher sense of ownership and responsibility. In the 1920’s people had to plan carefully to survive a major global recession as well as job insecurity – some men went to the pub to forget their problems, others went home and discussed with their “teams” – I am very fortunate that my mother grew up in a home of love and security – she and my Uncle Bill always understood the value of money and the power of budgeting. Albert and Ellen Mellor were smart people.

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