3 Ways to Grow Your Dental Practice the Right Way

Posted by Brogan Baxter on Wed, Feb 8, 2017

By Brogan Baxter
Chief Operating Officer, Senior Analyst
Four Quadrants Advisory

Early on, nothing comes easy.

You have to scratch and claw for the first five new patients. Then you bend over backward to earn the next 10. the effort required to get those first 15 customers is enough to crush a person's spirit.moneytree

But you keep carrying on because Dental practices grow slowly day by day, month by month. You gain three patients and lose one; then you lose two, gain one. If you look back over a year, however, you may have 50 or even 150 new patients. “That’s no small feat,” you say. “There really is no such thing as an overnight success.”

But during periods of growth the Dentist should ask what’s fueling it - instincts such as “grow or die?” Many Dentists grow their practice just because they want more production. But why? Because you want to make more money?

Here’s a little-known fact: increasing production can actually cause you to make less money. That’s because in a rush to earn more, overhead skyrockets and you can be stuck with slightly more income and a lot more money going out the door.

Here are three ingredients we make sure our clients — brand new and longtime ones— include as part of a “smart growth” instead of “fast growth” strategy:

1. Increase your production and maintain your overhead
2. Maintain production and reduce your overhead
3. Increase your production and reduce overhead

Don't Be Afraid to Ask for Help
To grow your income, you need a good financial team on your side. You need quickly-reported numbers, you need to have a pulse on your finances and you need a quick interpretation of your situation. If a negative trend begins, you need to know so you can act fast to counteract it.

Is overhead popping up five months in a row? Know fast, so you can nip it in the bud. In fact, his applies both to your production and to your overhead. You need solid numbers on both no later than the end of next month, and the numbers need to be reconciled and analyzed by your accountant. To identify trends, compare them to the same month last year and also to the past few months of this year. That way you can see in real time what’s happening in your practice’s financials, and whether it’s a seasonal effect or something new.

Even if you grow intelligently, you can still run into issues. For example, you might get a good news/bad news call from your accountant: “Good news! You made a lot more money this year than we were expecting! The bad news is that means your tax bill ius headed into the five figures.” Without timely and frequent tax estimates, you can end up with a nasty tax surprise at the end of the year. And that will certainly put a damper on your booming business.

When managed poorly, growth will actually hurt your Dental practice and cash flow. But when you do it right, growing your practice will do nothing short of change your life.

Visit our “how we help you” page to view quick stories of how we helped ACTUAL clients. (No actors here, we knew you could tell the difference).

If you think you need a better plan than you have now, and sooner rather than later, contact us today!

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Topics: dental accounting, business of dentistry

Who's Stealing From You?  8 Ways To Protect Yourself

Posted by Brogan Baxter on Fri, Feb 3, 2017

By Brogan BaxterIs Someone Stealing From You?
Chief Operating Officer, Senior Analyst
Four Quadrants Advisory

Think of five Dentists or Specialists you know pretty well.

Three of them have been or will be victims of some form of embezzlement at some point in their career. This crime knows no bounds – unsuspecting General Dentists and Specialists, Solo Practitioners, group practices, Dentists in small towns and those practicing in urban areas are all at risk.

That means you’re at risk too. 

Dental Practices are juicy targets for fraudsters because those leading them don’t have a business degree and are so busy seeing patients the can't constantly monitor the situation sufficiently enough.

According to a 2007 study by the American Dental Association, the Dentist’s system of controls (day-end balancing, review of software audit logs, fraud found by the Dentist’s accountant, etc.) lead to the discovery a paltry 19% of the time. So that means someone discovered the remaining 81% by accident.

But the best ways to prevent theft in your dental office may seem counter-intuitive. Instead of implementing new layers of control (and therefore complexity), we recommend tightening the way you manage your office every day.

To start with, remove any opportunity to embezzle.

Simple? Yes. Effective? Absolutely!

Not only will this reduce the risk of fraud, it will also improve other areas of your practice such as cash flow and the reduction of tax surprises, while also making you more aware of your practice's financial stability. Stopping someone hell-bent on stealing from an attempt to do just that may be impossible, but catching them before they damage your livelihood is not.

What if you think someone is already stealing from you? Again, we recommend thinking counter-intuitively. Knee-jerk reactions many times just lead to a sore leg. But to be blunt: DO NOT call the police. DO NOT confront the person your think is the perpetrator.

A bad move has the potential to make your situation far worse, especially if the person you suspect isn’t the thief after all. If you waste time targeting the wrong person, that gives the actual thief time to destroy evidence.

While no one has taken advantage of our clients while we were working for them, some of our clients have come to us as victims of previous embezzlement schemes. While each case was vastly different, there was one thing that rang true in each case: the embezzlement action was always larger, wider and occurred far longer than the Dentist ever thought possible.

If you suspect a theft is taking place, the best thing you can do is preserve evidence, conduct a quiet investigation and NEVER confront the thief without backup.

There are several things that must be done to improve the outcome of a situation that is going to be messy no matter how you look at it. Prosperident, the world’s largest dental embezzlement investigation firm, reccomends taking the following steps if you suspect someone is ripping you off:

  1. Continue to act normally and avoid behaving unusually. Conduct your investigation in a way that does not disclose suspicions.

  2. The Dentist must be extremely guarded about discussing suspicions with colleagues, staff members, etc. And what about that one special, most trusted employee? Statistics show that individual is the MOST likely to be the perpetrator.

  3. Don’t fire anyone until you've gathered the evidence. The amount the employee may steal from you in the relatively short time it will take to complete an investigation pales in comparison to the cost of a wrongful termination lawsuit.

  4. Obtain professional advice. Embezzlement investigations are not a “DIY” project! You may not know what to look for and will likely need the quiet assistance of staff who might be friends of the suspect.

  5. Preserve evidence. Your company’s computers contain a cornucopia of information that will be needed to confirm the embezzlement, quantify losses, prepare an insurance claim, proceed with prosecution, etc. However, this information is volatile and can be deliberately erased or overwritten.

  6. Do not dramatically change financial protocols. Looking to make changes without being able to explain the rationale will certainly be seen through by a thief.

  7. Do not report the incident to police until you have gathered all the evidence. It serves no purpose to do this early, and may limit your options in dealing with a thief.

  8. Do not contact insurance companies. If a theft involves obtaining extra funds from insurance companies, the insurance company may have recourse against the dentist for amounts misappropriated.

As I stated earlier, the best defense against fraud is to focus on procedures that improve your practice’s financial stability. Find out what could be wrong, and put yourself on the road to fix it. Download the free Success Kit today and get started.

How does your practice stack up? Click Here to take our quick, comprehensive financial review so we can discuss this with you in more detail.

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Topics: business of dentistry, stealing, fraud

When to Use (and Not Use) a Practice Management Firm

Posted by Brogan Baxter on Tue, Dec 29, 2015

The insights practice management firms provide can do a lot of good for your dental practice. But that doesn't mean that it's right for everything, or that it's a perfect fix for your issues. Think of a laser versus a bur. Using the wrong instrument in the wrong situation can lead to disastrous results.

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We’ve worked with hundreds of different clients and analyzed the practices of hundreds more. Dental practice problems can be separated into two very broad categories: Procedural (require small adjustments) and Philosophical (require major changes in the approach to one’s practice).

For instance, if your hygiene department is not as efficient as they need to be, that’s a procedural problem that can be corrected and avoided by implementing new policies and procedures. This would be a great assignment for a practice management firm to work their magic.

But if you’re not producing enough, or you have ebbs and flows with your cash flow, sending in a team of practice management experts to do the work of an accountant or someone with an MBA will only lead to frustration. And if they recommend to "just work harder so you can produce more," that will not fix your cashflow issues.

It’s important to note that we are not a practice management firm. In fact, we refer clients to them on a pretty regular basis because they can help in certain procedural circumstances where fixing a very specific problem in a very well-defined area.

If they chart a successful path to Hygiene Department efficiency that’s great! But it doesn’t mean they should help you chart out new paths to profitability by “investing in a CEREC machine" if it doesn't fit your business model. 

Expanding the procedures you offer with a fancy machine may sound like a great idea, but was the Return on Investment figure that won you over calculated generically or with your practice in mind? Did they provide data on how your cash flow will be impacted while your staff undergoes all of the training you will need to run it? Do they even have a handle on your cash flow for the next six months? Do they know? Do you?

What if the recommendation was to retain another Dentist? Have the expenses of adding and retaining another dentist — and the impact on cash flow — been considered? How much do you pay the other dentist, and can you do it without jeopardizing your own income? What happens if you put it off for six months? Do you have anyone intimately familiar enough with your overall financial situation to help you make that call?

Any major decision that you make has to be linked to all the different sectors of your finances. A decision made without at least two to three correlations made between your practice cash flow, your practice debt structure, your personal cash flow, and your retirement can become a misplaced business decision. And too many of those decisions can ruin your retirement or even your practice.

Good practice management firms want to help you fix problems and will be among the first to recommend working with someone else when they see you need a healthier approach to complex tax issues or to reduce your inflates overhead. 

If you feel like you’re on your own island — afraid to take action in any one direction — you’re actually not alone. Practice management might be the first section of the bridge off the island, or it may not be needed at all. You won't know until your overall practice is evaluated honestly.

If you have questions about whether practice management, or something longer term, is right for you, contact us today to discuss your concerns and possible strategies. 

We've also developed a quick, easy (and free), questionnaire designed to give you valuable insights into the current health of your practice. Click here to take it today!

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Topics: business of dentistry

INFOGRAPHIC: 4 Questions to Ask Yourself Before Hiring an Associate

Posted by Mike Magan on Thu, Aug 27, 2015

FourSight_infographic

 

It’s absolutely key to make sure the partnership is equitable –  no 51-49 percent splits – the associate has to be treated as an executive from day one. With the massive debt today’s Dental school graduates incur, you won’t be able to compete with corporate dentistry if you aren’t offering stable salary from the start.

They have to be treated as your equal as much as possible to make the transition smooth when you do eventually leave. If done right, all of this planning will help your staff, patients, and revenue make it through the transition from you to someone else pretty cleanly. But if not, you’re likely to end up looking for a new associate.

If you're unsure about hiring a new associate, or have additional questions about the process, reach out to us today! Or you can contact our own Brian Wilson at bwilson@4quadrant.com or (877) 720-6213 today.

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Topics: business of dentistry, hiring staff, hiring a new Associate

VIDEO: How Do You Control Your Practice's Overhead?

Posted by Jason Smith on Sun, Jun 29, 2014

equipmentMany dental practices have poor overhead, but that's not all on the dentists themselves. Practices cost a lot to start, and with dentistry becoming more and more expensive, once you get off to a bad start it can be hard to rein overhead back in.

Don't just let it happen. Watch the next in our Top 1% Club video series, and yearn more about breaking the overhead cycle.

TRANSCRIPT:

Hi, I’m Jason Smith, founder and CEO of Four Quadrants Advisory. We turn dentists like you into multimillionaires.

One of the worst habitual offenders in dentistry today is poor overhead. But it isn’t just the dentist’s fault. Inc. Magazine said dentistry as a whole is one of the five most expensive startup companies in the United States. So controlling overhead has gotten harder and harder, plus additional writeoffs with PPOs and insurance companies as they are today. We find, though, if overhead isn’t corrected at an early age in the dentist’s career, that they will carry that overhead for the rest of their career. So in other words, I’m saying if we find a dentist that is 37 years old that has 75% overhead, more than likely they’re going to be running 70 to 75% overhead when they’re 55, and that will lead to a non-stop problem in becoming financially free.

A great overhead percentage in general dentistry should be under 60%. 6-8 years into practicing we have to buy more equipment, we have to reinvest, and we’re running out of space. So if we’re still running high overhead, and then we need to expand our space and take on more debt, then it becomes a perpetual problem that you’re never going to get out of. And if you’re not debt free 8-10 years from retirement, you’re going to have very hard times with saving, and you’re going to have very hard times doing the proper practice transition, because any practice that is debt-laden is a practice that nobody else wants to buy.

This is just a glimpse into the multimillion dollar secret for dentists.

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Topics: dental advisor, dental financial planning, Financial Planning, business of dentistry

Producing More Won’t Lead to Your Retirement

Posted by Jason Smith on Tue, Jun 17, 2014

jason_smithOne of the biggest misconceptions in dentistry is that the only way for you to achieve your financial goals is by producing more. But piling on more work isn’t always the best answer – and can do more harm than good.

What’s the real problem? Consistency – or a lack thereof. Watch the video to learn more about how the multimillion dollar secret for dentists can be your secret, too.

TRANSCRIPT:

Hi, I'm Jason Smith, founder and CEO of Four Quadrants Advisory. We turn dentists like you into multi-millionaires.

One of the biggest financial pressures and misnomers in dentistry today is feeling like you have to produce your way out in order to achieve financial freedom. We have clients across the country and the one thing they all have in common is they’re not saving as much as they would like for retirement, and they have a lot of month-to-month financial pressures in their practice because of lack of consistency in cash flow. They’re tired of looking at their bank accounts every 2 to 3 days online to see if there's enough money to pay payroll, and they’re tired of getting calls from home asking for another check in the form of a distribution to pay their bills. And a lot of the ups and downs and lack of consistency and the lack of efficiencies are what lead to ultimately not being able to be proactive with saving enough on a monthly basis and taking the pressure off.

Regardless of where your production is, if you’re not on a roadmap that builds cash all the time it's going to lead to a career in dentistry unfortunately where you wonder why you’re 53 years old and don't have enough money for retirement. The American Dental Association says we save $23,000 a year for retirement as the average dentist, and you should be saving well over $100,000 for retirement. And if we can first put the tools in place to save on a monthly basis in our practices and at home, we can become more efficient and we can get you on a financial road to save more for retirement.

This is just a glimpse into the multi-million dollar secret for dentists.

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Topics: dental advisor, dental retirement, Financial Planning, business of dentistry

Growing to Serve You Better

Posted by Brogan Baxter on Tue, Jun 10, 2014

FQA_Email_Stat2Four Quadrants Advisory has undergone a lot of changes recently, and all for the better. In the last two years, we've grown from a staff of three to eight full-time professionals filling roles from prospecting and sales to accounting to strategy and management. And with our growing team, we now have more and more hours to put into helping our clients grow their practices and build the retirement they dream of.

It’s not just that we have more employees at our disposal. We’re bringing in people with experience – people who have spent years and years working in finance, building up businesses and dental practices to be stronger, bigger, more profitable, and more efficiently-run.

That includes people like:

Kathy Collins, CPA

Bryce Woodyard, CPA

Mathew Ryan, Financial Planner and Analyst

Brian Wilson, Sales

Jason Wager, Sales

Ryan McLaughlin, Accountant

We’ve always been confident in our ability to help successful dentists turn their practices into wealth-building machines. We’ve always been confident that our advice will lead dentists to be able to retire earlier and more comfortably than they could otherwise. We’ve always been confident that we can help dentists transition their practices to their successors, while preserving their legacies and helping them profit.

But we’ve never been in a better position to do all that than right now. We’ve never done it better. And we’re certainly not finished growing. We’re excited about today, and even more excited about tomorrow. If you think you and your practice are ready to take the next step, let us know. Because we are.

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Topics: dental advisor, business of dentistry

VIDEO: Dr. Thomas – From Anxiety to the Top 1% Club in a Year

Posted by Jason Smith on Mon, May 26, 2014

When Dr. Ryan Thomas first acquired his practice, he and his wife Martha weren’t prepared for the new stresses that would enter their lives. After searching for someone  who could help them get back on track, Ryan found us – and it was a perfect fit.

Now they’re more comfortable, less stressed, and getting back to the things they value like spending time together. And with our holistic approach to their finances, the Thomases are already in our Top 1% Club – and it’s only the first year of many we’ll be working together.
Anytime you have that type of a vision going into something, you can be much more effective at what you do. It’s nothing short of amazing.
Find out more about the Thomases, where they started, and where they are today in this video, and see if Four Quadrants Advisory can do for you what we’ve done for them.

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Topics: dental advisor, Practice Transition, dental financial planning, dental accounting, Financial Planning, business of dentistry, Tax Advisory

The 3 Pieces to Your Perfect Financial Plan

Posted by Jason Smith on Wed, Apr 30, 2014

When you graduated dental school and opened your own practice, you didn’t think it would be easy – obviously starting from scratch would be tough. But you weren’t prepared for just how tough it would be. You’re running a business, but you don’t have the tools you need to do it. You’re a dentist, not an accountant. And you didn’t get the business training that you need in your undergraduate or dental school curriculum. But you’re expected to have the skills of an entrepreneur and of a scientist. You’re lost.

What you need is a thorough and solid financial plan, which can guide you through the troubles of the present into the prosperity of the future. And that’s exactly what you’ll get from The 3 Pieces to Your Perfect Financial Plan. It’s Four Quadrants Advisory’s guide to getting the foundations of your finances in order, so you can concentrate on your patients rather than your balance sheets. Download it for free today and get started.

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Topics: dental advisor, dental tax, dental financial planning, dental accounting, Financial Planning, business of dentistry, Tax Advisory

When Growing Your Dental Practice is a Bad Thing

Posted by Brogan Baxter on Fri, Apr 25, 2014

jengaGrowth can be good or bad for a dental practice, just like for any other business. Growing simply for the sake of it is not smart. Growing at a rate that’s well-thought-out, strategized, and steady is far better.

Many dentists grow their practice just because they want more production. But why? Because you want to make more money? Here’s a little-known fact – many times increasing production can actually cause you to make less money. That’s because in a rush to grow fast and make money, overhead skyrocketed, and now you’re stuck with a little more income and a lot more money going out the door.

There are three ways to increase your revenue.

  1. Increase your production and maintain your overhead
  2. Maintain production and reduce your overhead
  3. Increase your production and reduce overhead

To grow your income, you have to have a good financial team on your side. You need quickly reported numbers, you need to have your pulse on your finances, you need fast interpretation of your situation. If a negative trend begins, you need to know so you can act fast to counteract it. Is overhead popping up five months in a row? Know fast, so you can nip it in the bud.

This applies both to your production and to your overhead. You need solid numbers on both no later than two weeks into the next month, and the numbers need to be reconciled and analyzed by your accountant. To identify trends compare them to the same month last year, and also to the past few months of this year. That way you can see in real time what’s happening in your practice’s financials, and whether it’s a seasonal effect or something new.

Even if you grow intelligently, you can still run into issues. For example, you might get a good news/bad news call from your accountant. “Good news! You made a lot more money this year than we were expecting. Bad news is that means your tax bill is well into the five figures.” Without timely and frequent tax estimates, you can end up with a nasty tax surprise at the end of the year. And that will certainly put a damper on your booming business.

When managed poorly, growth will actually hurt your dental practice. But when you do it right, growing your practice will do nothing short of changing your life.

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Topics: dental advisor, dental financial planning, Financial Planning, business of dentistry

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