business financial Tag Archive

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Data Driven Patient Satisfaction for your Practice

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Yes, I admit it – I LOVE DATA! In this article I will detail some real life examples from my group dental practice of how objective data can support best possible customer satisfaction. Customer service is more than a smile and the warm and fuzzies.Let’s start with asking what are the primary goals of your practice? I think it would be safe to say that every practice seeks to achieve success in the following areas:

1. Satisfied patients.
2. Integrated, effective, happy team.
3. Financial health and growth.

In this article I would like to share some thoughts about #1. Satisfied Patients, without which the other goals are unlikely to be achieved. I will assume that you already have a degree of financial success and a great team of Linchpins ready to seek out new ways to advance your practice.

I hope you also agree that the best way to achieve satisfied patients is through outstanding customer service. OK, now let’s take a look at how great customer service can be cultivated and the results measured objectively in a dental practice.

So, what measurements best reflect whether or not your practice is perceived by patients as being a great place to receive dental care?

Growing or dying: One high level indicator of overall satisfaction certainly would be continued patronage as reflected in your monthly active patient totals. Be realistic folks. This is not the total number of patients in your database (except for those who have been in practice less than 2 years). Consider active patients to be patients who have been PHYSICALLY in the building for treatment in the past 2 years. Consider utilizing an even more powerful metric for this data set – a Trailing 12 Report. This report simply compares the current 12 month total with previous 12 month chunks, going back one month at a time so that you are comparing year over year retrospectively. A good report to show whether you are growing or dying year over year, and a hint that customer service may be slipping over time if growth is slowing.

Post appointment surveys: Additional insights into quality of customer service can be derived from post appointment survey return results. We send out a survey same day to every patient seen during the day. Lighthouse 360 has fully automated this program for us. Fix what the customer complains about, augment what they rave about.

Testimonial acquisition: Next let’s look at another trackable activity, testimonial acquisition. We have customized the Lighthouse post appointment survey to include a request for a testimonial, including patient consent to use in electronic media. Post testimonials on your website. Start your weekly/monthly team meetings by reading all the testimonials good and bad.

Hopefully you are acquiring additional insights on how well your practice is taking care of patients by means of such things as “Ask for Testimonials” programs which encourage and enable patients to post testimonials on Google+, Yelp, Yellow Pages, etc.

The more good data (Testimonials) that your patients post on the web, the more you learn, and more evidence exists to encourage new patient growth and overall growth of your practice.

There are, of course, many other ways to improve customer satisfaction in your practice. However, in my practice I have found that the above data points and programs are key to creating virtuous cycles that drive patient satisfaction and growth predictively over time regardless of economic conditions.

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Eat what you kill

Now I am not much of a hunter however the saying “Eat what you kill” is a great business strategy to follow to ensure your financial success in dentistry and any other kind of business.

“Eat what you kill” translates to running your practice on a cash flow basis as an astute business owner and entrepreneur. This approach also works extremely well with your personal finances, and ultimately can be the key to avoiding the pit falls of personal and professional bankruptcy. And is so easy to manage. You do not need an accounting degree to follow this strategy. Anyone with the desire manage their business or personal finances extremely well can do this.

It is not taught in schools, as far as I know. Many industries benefit from you not following this strategy, including banks, credit card companies, leasing companies, and of course bankruptcy attorneys. The “eat what you kill” strategy prevents you from making poor financial decisions. It displaces the wants and redirects to the absolutes and must haves to grow the business.

The benefits are far flung, like decreased stress in your life due to no worries regarding your finances, no concerns ever about being overdrawn at the bank, always knowing the status of your financial capabilities when the opportunities present themselves. The most important benefits to me have been a lifelong ability to grow my business and personal wealth without major setbacks.

Sound too good to be true? Not at all, simply… Spend what you earned.

The trick is to apply this approach to finance consistently and continually, with no exceptions on a daily, monthly, and annual basis.

Spend only what you earned this month in your business. If you do not have the money, then don’t obligate the company for the liability. For a small business this means the owner only gets paid if there is money left over at month end.

Spend only what you earned and deposited in the bank. This prevents your business from getting over extended financially waiting for a check to clear or accounts receivable to come in.

Guess what? You start to pay very close attention when there is no money left over at month end. You will take action quickly to correct your cash flow direction. Works like a charm!

Now some of you will be asking “how do I apply the approach to purchasing significant capital assets needed to grow the business?” Consider technology purchases such as a $100,000 3D cone beam CT scanner. I highly recommend that you plan to pay off the lease/loan for any such purchase in a 3 year period. That has been my policy for many, many years. Less money ends up in paid interest, more of your money ends up paying for the technology itself. Quite simply if you can’t pay it off in 3 years – don’t buy it.

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From Dentist to Small-Business Owner: Tips and Options

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You learn how to fill cavities and keep teeth clean and healthy in dentistry school. What you don’t learn is how to raise capital and manage business debt.

“That can make life after dentistry school challenging,” says Genaro Romo, who started his career in Chicago in the 1990s. He quickly realized that being a successful dentist meant being a successful small-business owner.

“We were trained to be dentists,” Romo tells NerdWallet. But “you need to know how to run a business.”

Choose your path: group practice or solo

After graduating from school, dentists essentially have three options. One is to join a practice as an associate and “work your way up,” Romo says. That’s what he did, and it was a successful strategy. He eventually struck out on his own, setting up his own practice; today, he has a 20-person office in Chicago.

There are two other major options:

  1. Build your practice from scratch. This can be exciting, but it’s expensive. A dentist launching a startup practice typically requests a loan in the range of $350,000 to $500,000, says Gavin Shea, a senior director of sales and marketing at Wells Fargo, where he’s worked with hundreds of dentists.

    Between 50% and 60% of the funds goes toward building out an office, which usually involves big investments related to specialized plumbing and electrical needs, he tells NerdWallet.The basic dentistry workspace is called an operatory. A fully equipped setup, which includes cabinetry, dental chair, lighting and digital X-ray equipment, can cost “anywhere from $25,000 to $50,000 for each operatory,” Shea says.

    The startup route can also be tricky; Romo notes the importance of having a clear business plan. Overspending based on a fuzzy growth strategy is a common mistake, he says, though he adds: “Make sure you have room for growth.”

    Some dentists are overly cautious with investment only to find that, as their business grows, “you have nowhere to go,” Romo says. “They maximize their space and they have to start over in a new location.”

    And just as with buying a home, location is key, Romo says. “You really need to do research,” he says. The key question: “Is there a need for a dentist in that location?”

  2. Buy an existing practice. Acquiring an existing practice, such as one owned by a dentist who’s about to retire, is a common route taken by new dentists. As with buying a house, it’s important to accurately appraise the value of the practice.It’s easy to make a mistake. For example, Romo says, “You could be buying an office that may not be as busy and the equipment is very outdated.”

    “Most independently owned dental practices will sell [for] between $500,000 and $750,000,” Shea says. A dentist requesting a loan usually also factors in “some short-term working capital to cover the first few months of ownership.”

Choose your financing: bank vs. alternative lender

While Wells Fargo declined to disclose interest rates related to dentistry practice financing, the financing it offers includes SBA-guaranteed loans, which typically carry low interest rates. An SBA loan is usually based on the current prime rate plus an additional markup rate, known as the spread, of 2.25% to 2.75%. At the current prime rate of 3.25%, a typical loan would charge 5.5% to 6% interest.

Bear in mind that the SBA has strict requirements and the application process can take months. But a traditional bank is not your only option; alternative lenders tout the speed of their application and approval processes, which may range from a few hours to a few days.

Some alternative lenders now also offer financing specifically for new dentists. However, interest rates are higher than those offered by banks. Check out the different small-business loans options on the NerdWallet Best Business Loans page.

At DealStruck, for example, a borrower could get a three- to four-year term loan to finance dental equipment at interest rates ranging from 12% to 18%, says Steve Freshour, the lender’s director of credit.

“These are fully amortizing term loans,” he says. “A standard 4% origination fee would be charged and netted from the loan proceeds.”

When making financial plans for a dental practice, “Everybody’s situation is different,” Romo says. But, he stresses, “You have to remember you’re investing in your practice.

“If you’re investing in technology, it builds stronger patient relationships,” he says. “It’s not a luxury. If everything works out, it’s probably paying for itself.”

Get help from the experts

Whether you start a brand-new dental practice or buy an existing business, Romo offers two key tips:

Find a financial advisor who specializes in dental practices

Some professionals specialize in giving dentists financing advice for starting or expanding a practice. “There are CPAs who specialize in dental offices,” Romo says. “There are dentists who also have accounting degrees” or other kinds of training that qualify them to offer guidance.

And the best way to find an advisor is through professional organizations of dentists. Which leads to tip No. 2:

Join professional associations

Romo urges new dentists to reach out to other dentists from the beginning. He did so by joining the Illinois Dental Society and the American Dental Association, and was so impressed with the ADA’s work that he became one of the organization’s spokespeople.

The ADA’s Center for Professional Success website offers information and tips for dentists, including a calculator for managing business debt. The California Dental Association has a practice support page with information and tips related to the business side of a dental practice.

Some dental associations also have relationships with banks. The ADA, for example, works with Wells Fargo, which has a practice finance page dedicated to serving the financing needs of dentists, optometrists, doctors and veterinarians. It offers information on key aspects of starting and growing a dental practice, including opening a new location and buying new equipment.

Source article: From Dentist to Small-Business Owner: Tips and Options 

 

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Sharing financials with employees

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Most would agree that it is good to educate employees on how the business runs: how much money comes in and where it comes from, how much money goes out and where it is spent, and what is left behind and how it is used to reinvest in the business. Employees feel more invested when they understand the financials of the business. They grow personally and professionally by understanding how the business makes money. They become more sensitive to the costs in the company. Even if they are not a shareholder they develop a sense of ownership.

The concern that private companies have is whether such disclosure will unduly expose their financials to the community, to their customers and even to the press, and whether the employees will be offended by the apparent wealth being amassed by the owners. The smaller the company and tighter the ownership, the more this becomes a concern. But, wait a minute! Do you really believe that your employees don’t have a feel for the revenues of your company? Employees of most companies, particularly small companies, typically have a good feel for the total revenues of the company. Employees of most companies, particularly small companies, “think” they have a feel for the expenses of the company. So, in their heads, they have a clear idea of the profits of the company, and the amount of money the boss takes home.

Unfortunately, their estimate of the expenses is naïve and usually understated. They underestimate the cost of the office/factory infrastructure; they are ignorant of employer expenses, such as a business license, business insurance and the employer’s contribution to employees’ tax obligations; they overlook a variety of costs such as utilities, janitorial services, equipment repair, maintenance, etc. As a result, they have an overstated estimate of how much the boss takes home.

Educating your employees on the financials of your company creates a sense of empowerment and ownership. They are usually surprised and awakened by how much you spend on categories with which they are familiar and which they can impact. Your candor in the disclosure causes them to accept a responsibility to manage the expenses. They grow as individuals, both personally and professionally.

Every employee in your company should have a good feel for the basic flow of your income statement – the sources and amount of revenue and the classes and amount of expenses. In addition, your managers should also have a feel for the structure of your balance sheet – how much assets are tied up, where it is tied up and what return on those assets the company expects to get. Finally, your top executives should also understand the nature of your cashflow and your capital structure – the periodic fluctuations in your working capital, your sources for cash when needed and an understanding of the leverage deployed in the financing of your business. By educating your employees in these areas you not only enable them to do their jobs better, but you grow them as employees – a stewardship responsibility you accepted when you hired them.

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Food for Thought is our way of sharing interesting concepts on corporate leadership and management with others who might find it useful. The thoughts offered are intended to be controversial and thought provoking. They always follow our motto of helping develop logical leadership.

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