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a blog by Chris Barrow

Overcoming the fear of financial organisation

A conversation with a Principal this week, that took me back to my first ever dental client.

My current client has just moved to new single-handed premises, and confessed to me that she does no formal financial planning for her business because "every time I think about finances and spreadsheets it just makes me feel nauseous."

I've heard that many times over the years and, because I'm the direct opposite it never fails to amaze me.

My usual questions include:

  • "how do you keep count?"

  • "how do you know when to pay the bills and whether you can afford them?"

  • "how do you know if you can buy things?"

  • "how do you know you can make payroll?"

  • "how do you know your production targets necessary to make it all work?"

I hope you will forgive me for reminiscing (once again) that my first assignment in dentistry was when a lab owner asked to me to speak to a Dental Principal who owed him £30,000 in unpaid lab bills.

That would be bad news today - this was 1993, and if the dentist went bust, so would the lab.

I was coaching the lab owner in the days when my clients were from many industry sectors and three years before I decided to focus full-time on dentistry. The lab owner called the dentist and basically explained that it was debt collectors or Chris Barrow, make a choice.

Thus, my first meeting with a dental practice owner was with one of those "I don't look at the finances because it makes me queasy" genre.

On closer examination, it transpired that he owed everyone in town - including his dental suppliers, the tax man and even his children's private school fees. It was a real mess.

So we began our own version of a 12-step recovery programme:

Step 1 - recognise you have a problem.

Never easy, this man was in denial and came from a generation who believed that a medical qualification made him a superior class; that all his suppliers were mere trades people who could wait. I had the unpleasant task of helping him to visualise the knock on effects of his impending insolvency. On reflection, it was probably the loss of social status that motivated him to act - "what would the neighbours think?"

Step 2 - decide to do something about it.

I'll admit, the Marmite in me was very direct and explained that he either did as I told him or he would be talking to bailiffs, who were even less pleasant than CB.

Steps 3 - 12 - doing something about it.

It took about 6 months for me to work with him on budgets and cash flows, to insist on production targets and controlled spending (both personally and professionally) and to remortgage his house to clear the debts.

Needless to say, my lab owner was delighted. I assume the other creditors were relieved. I received no thanks from the dentist, who probably to this day thinks the working class should be suppressed.

Here I am, 28 years later, listening to a similar emotional reluctance to keep count (although I hasten to add that today's client doesn't owe money and isn't a snob).

My challenge will be to take her on a similar (although hopefully less confrontational) journey:

Step 1 - to recognise that "Friday afternoon accounting" (check the internet bank balances and then go home either depressed or happy) cannot work in today's fast paced world. That the avoidance of financial monitoring will create more pain in the long term than the short-term pain of learning to take control.

Step 2 - making the decision to become financially confident. Five key skills required - addition, subtraction, multiplication, division - and beginner's lever spreadsheet competence.

Step 3 - 12 - I will hand hold her through the process of budgeting, cash flow forecasting, cloud-based bookkeeping, KPI monitoring and profitability analysis. Then I will hold her accountable to stay in control through regular reporting.

If looking at your bank statements, opening brown envelopes and talking money with patients makes YOU feel nauseous - give me a call - I've been doing this a long time.

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