As 2024 kicks off, Chris Barrow discusses why embracing financial planning is key for control and stability.
My new year has started with many more clients than usual asking for help in understanding their finances.
Not only have I received a higher-than-average number of requests to analyse business financial data, but also requests for guidance in establishing personal budgeting systems.
I published a blog post a few days ago about spending a full day at my desk, working through data for nine individual clients – in one day, that’s unprecedented since lockdown.
Whenever a ‘trend’ manifests itself, part of my job is to ask, ‘Why is this happening?’. Having identified a pain point in the market, I firstly make sure I have the solutions ready and, secondly, I ask myself whether this means there is marketing opportunity.
Sidebar – yes, that means making money out of other people’s fears and misfortunes. Respectfully, so do you – whether it’s toothache, lack of confidence in eating or smiling in public, or reaching out to those abandoned by Smile Direct Club.
As Michael Gerber said in The E-Myth Revisited, ‘The purpose of a business is to solve the customer’s problem’.
Why is this happening?
So, back to this rush for financial analysis advice. ‘Why is this happening?’
- White space appearing in the diary for the first time in three years
- Treatment plans presented in Q4 of 2023 and deferred (by the patients) until – hopefully – Q1 of 2024. (Make sure your pipeline management systems are robust)
- A massive increase in your labour costs over the last 12 months (by as much as 40%)
- Another increase in overall operating costs
- An increase in variable expenses – lab work, materials, and the costs of hiring clinicians
- Diminishing profit margins on some popular dental products
- A general reduction in practice goodwill values, a slow-down in the deal flow and ever more unattractive earn-out terms
- Increasing domestic cost of living for owners as well as everyone else
- Fears around lack of available cash flow as margins decline, collections slow and employees expect prompt payment, while creditors press for payment
- An overall political, economic, and geopolitical landscape that creates uncertainty about the future.
There’s a gloomy top 10 list to add to all the other lists.
What are the solutions?
That’s a top 10 list of the actions required to get total control of both personal and professional finances.
Teaching clients that list is what people like me get paid for. Whether it’s a business coach and/or a dental accountant – get help.
The good news is that all you need are the following resources:
- To be numerate
- To have a beginner’s understanding of spreadsheets
- To set aside the time to be trained and then to do the work.
No prizes for guessing that it’s the third of these that presents the biggest challenge for the many.
It’s never much fun to keep count (compared to good TV, exhilarating exercise, great food and wine, a good book or maybe even a complex clinical challenge), so finance gets put off, dropped to the bottom of the list, abdicated from, or delegated to, often the cause of procrastination.
Choosing to fly blind.
As a client said to me at the start of the year:
‘Dear Chris.
‘We are hoping that this year the pilot can remove the blindfold. Or in other words, 2024 will be the year we stop flying like XXXX and seeing where we end up. So, we are working through the financial templates.’
That, by the way, is some four years after opening their private squat practice. See what I mean?
So, for any coaches or accountants reading this – be cognisant that this is a major marketing opportunity at this exact moment.
And for any dental business owners reading this – I repeat – get help if you need it. But most importantly, make the time to create better financial control systems than ever before.
You are going to need them.
Catch up on previous Dental Business Coach columns:
- Is your list half empty or half full?
- Planning for a profitable exit when selling your business
- A guide to setting your goals for 2024
- Dealing with pay rise demands – from drama to empowerment
- Would you want to work full-time for you?
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