This month, Mel and Flora talk about how to set challenging financial goals.
A dental practice is just like any other business. It requires the business owner to have an understanding and focus on their finances. Knowing the break-even amount required to keep the business afloat to pay bills and salaries is one aspect.
Knowing how to create and use financial targets to reach and exceed the breakeven is another. Both will allow the practice to grow and prosper comfortably and reduce stress.
Financial goals help you to create a realistic plan for your business and allow you to protect your business by continually monitoring its progress and will help you maintain control of your workload and your finances.
In this article, we demonstrate the benefits of daily financial goals. Also, how a shared approach to reaching them keeps everyone focused and on target.
Daily financial goals for a treatment room
By setting a daily financial goal for your treatment room you create a measuring tool that not only tells you and your team if you are on target to hit and exceed your goal but also the numbers are a method of demonstrating if you are prescribing and communicating required treatments to your patients.
There are many ways to set your financial goals based on your own business financial desires, your overheads and variables and the potential values of your services. To do this comprehensively, takes a lot of data gathering, analysis and planning. You can, however, start now with a simple financial goal setting formula.
The simple formula for setting scheduling goals
In order to create a scheduling system that allows you to track the numbers. You will firstly have to work out your surgery hourly rates and then begin to set daily goals that lead up to your monthly and yearly goals. We have set out a basic outline below.
Start with the end in mind and back into the daily goal. You need to establish your yearly production goal first – usually based on the last year you can add 10-15% growth.
Divide this monthly and then divide that into the number of sessions you work to establish your daily goal.
Now you have a goal for everyone to work towards. This allows your team and manager to focus and measure. What’s more, if the goal is hit or exceeded, everyone knows you are exceeding your target. This keeps the stress over the day to day running of the practice to a minimum.
Having a goal allows everyone to focus on balancing a varied type of procedures into the schedule. It reduces you running the risk of a day of exams, fits and reviews and low production. Or, even a day weighed too heavily on production leaving everyone exhausted.
So many practices keep their financial information to the management. We suggest that once you have set your financial goals and organised your running costs you share this information with your team.
Interestingly, teams don’t understand the pressure the principal is under each month to take their salary. When you share this information with them there is a greater appreciation for the high overhead and challenges in running a consistently profitable dental practice.
Team members knowing the daily rate that each treatment room provides is probably the strongest way to onboard your team to take responsibility for the overall success of the business. As opposed to their own personal tasks within their role.
Setting goals
As we mentioned before, if we maintain the focus on treatment needs, the financials are an easy tool to utilise. The numbers merely act as a measure and the growth takes care of itself.
By setting scheduling goals we can create a profitable schedule. This gives the opportunity to clearly track the daily performance of every clinician. This also gives the whole team a financial forecast and a simple breakdown literally minute by minute.
These goals act as a guide for the front desk team to work within. Specific training and understanding of the system are required in order for them to be successful in its execution and in return allow for growth and stress management within the working day.
The pressure is greatly reduced if you know you have met your target ahead of the month-end, leaving you as a business owner to focus on performing dentistry rather than worrying about surrounding external financial factors.
Summary
To get started in making this a reality, make sure you write these financial goals down. Consider the different clinicians earning potential so that it is realistic for each provider.
In our next part of this article series, we are going to show you how to plan the schedule to meet the clinical needs of your patients whilst delivering excellent customer service and meeting your financial goals.
If you want to think about this now you could go ahead and write out what your ideal day could look like to meet your financial goal. Then we will share with you how to make this a reality.
This article first ran in Private Dentistry magazine. Read the latest issue of Private Dentistry magazine here.
