Archive for Money tips for Business
I’ve seen a lot of dentists have financial issues and get stuck in a real bind. But the real issue is not how much money you are making, but what you are doing with it when you get it. What are your living expenses? Where are you spending your money? What are the most important priorities for you and your family? Is it private-school education for your children or fancy cars for you and your spouse?
My observation, through years of experience as THE DENTAL COACH©, is simple: many dentists spend more than they make. According to the ADA, less than 10% of we dentists can retire at the age of 65 and maintain our current standard of living. This is shocking to me! What do we have to show for all of that hard work in dental school and beyond?
Do you know where your practice stands right now, today? What is your largest expense?
The number one largest business expense for a dentist is staff. The average staff cost is between 24-30% (including wages, taxes, benefits, etc.) It’s not uncommon to find dentists with staff costs in the 35%+ range. Unbeknownst to them, their staff expenses are totally out of control! (Check out my book, Killing the Practice Before It Kills You: How Throwing Out My Business Model Saved My Life) to see how I managed staff costs.
The key to finding out where your money really is:
- Pay attention to your largest expense – staff. What can you do to manage this cost?
- Take time to sit down with your CPA and analyze your overhead expenses on a monthly basis. What can you do to make sure that your money is being spent in the right areas?
- Review your Income Statement. How can you ensure that you are living the life you want now, while also saving for the life you want in the future?
If you have an expense management tip that you would like to pass on, please share it in the comments below.