By Brogan Baxter
Chief Operating Officer, Senior Analyst
Four Quadrants Advisory
How hard do you work to make your practice a success?
As you prepare to answer this question, what determines your response? Emotional energy? Putting out dozens of “fires” caused by staff or patients? The physical toll patient care takes on your back, limbs and fingers?
We’ve analyzed hundreds of practices over the years; many of them became clients, some did not. Our first impression of so many of them often resembles a hamster on an exercise wheel. Despite all their hard work, they remain in the same spot financially. And despite occasional bursts of energy to free themselves, the Dentists only spin the wheel faster while it contains them in the same corner of the box.
A Dentist who says “I work really hard!” to the question a few paragraphs above often times also says “I need to produce more,” when asked “How can you earn more in your practice?”
“I need to produce more” really means “I need more income," which really means “My cash flow is not good, I have a bunch of poorly structured loans, I spend more than I should, I take too much cash out of the practice, my overhead is high and I’m in the mouth all day so I don’t have time to figure this out.”
Now we’re getting somewhere!
Just before the Great Recession in 2008, the American Dental Association surveyed its members and determined they’re not much different than the average American in terms of financial planning. They found that 96% of Dentists are not saving enough money to maintain their current lifestyle in retirement.
Americans overall don’t save enough, but it’s a bigger problem for the Dentists because a cash-based business such as Dentistry won’t sell for enough to sustain lasting income, and the Dentist’s lifestyle often requires more income at retirement than that average American. We could all learn a lesson from our grandfathers who emerged from the Depression era with a drive to save while at the same time not spending money they don’t have. The Great Recession seems to have created a movement back to this kind of pragmatism today, but time will tell.
When faced with the spinning wheel, our clients work with us to slow it down so they can finally step off and put their energy in a productive direction. Most dentists we work with — those who are producing above $750,000 each year — are already busy enough. They don’t have to produce their way out of their financial doldrums.
Imagine if you could press the pause button and take a hard look at how everything financial in your life and practice is inter-related and then make changes to dramatically increase savings without changing the way you practice. Pure savings. Not returns in the market, not real estate gains, and not promises from hedge funds, options, shorts, swaps, IPO’s, or complicated insurance products.
A Dentist really can save more than they ever thought possible while their lifestyle remains the same. It’s not easy, but it's definitely possible. You can do it with a pragmatic methodology that combines great cash flow, acceptable profit, and a custom financial plan. Are you going to produce your way out of it like the hamster, or are you ready to get serious about saving?
You need a plan and you need a thorough and comprehenisive plan. But how do you build a financial plan without years of training and experience? It’s not as hard as you think – with a little guidance.
We're the only firm in the industry to guarantee that you'll be saving at least 50 percent more after your first year with us. Click Here to find out more about our Financial Plan created with Dentists and Specialists in mind. It will map out what you need to do, and how you can get there.