Deborah Bell examines the benefits of steady cash flow and how to achieve it in your dental practice…
Cash flow may not be the reason you wanted to become a dentist, or what you dreamed about while studying, but it is a good barometer of your business’ strength and performance. It is key to ensuring your practice is profitable and successful. Which, in turn, will support you to practise the kind of dentistry you probably were dreaming about through all those years of dental school.
Creating a stable, positive cash flow can help to keep your business running smoothly in numerous ways, freeing you up to focus on the clinical side of things. Having a dental membership plan is a simple but effective way to introduce that kind of financial stability.
Most businesses will go through peaks and troughs of income and expenditure throughout the year, or even within a single month. And, often the causes of these fluctuations can be beyond your control. You may have a full appointment book and a strong financial forecast but if there are a few last-minute cancellations or patients failing to turn up, that can change and you suddenly have a gap to plug.
Dealing with this kind of ebb and flow can add to the general stress and admin of running a business, but in a dental practice you can mitigate the impact this has on both the team’s stress levels and the effort needed to balance the books. A dental membership plan provides a consistent, regular level of income every month. This means you always have a baseline to work from – taking away a lot of the guesswork when it comes to forward planning.
With a regular cash flow, based on fees that you can correctly calculate to suit your goals, you can have greater certainty over what funds you have available for developing or maintaining your practice. For instance, if you are considering a loan to invest in new equipment or renovation to the building, being able to show a steady level of income may well help to secure the funding you need. Or, if your goal is to sell your practice or retire at a specific future date, having a fixed, regular income increases your goodwill value.
Having a plan also means that there are less likely to be gaps in the first place, as members of a plan are more likely to turn up to their appointments and attend more frequently. This means that managing your diary can be a smoother process and this is one less headache for the practice team. Not to mention that you will be treating patients who are committed to engaging in their dental health, which gives more scope for practising preventative dentistry.
The security of knowing you have a dependable income for your practice and being more in control of your future plans, can give you greater peace of mind when it comes to running your business. Eliminating the ‘unknown’ of predicted income is one of the ways a plan can help when it comes to your job satisfaction.
On top of that, and the increased opportunity to deliver preventative dentistry mentioned above, a plan can free up your time as you don’t need to spend as much of it considering how you can address those troughs or bridge any gaps. So, you can spend less time analysing the figures and number crunching, and more time doing what you trained to do – practising clinical dentistry that makes a difference to your patients.