If you’re a private practice owner struggling to stay afloat, take heart. It’s never too late to get your finances in check and control your cash flow. These five processes will help provide a foundation for financial success.
Recently, I met with clients and their spouses at a Financial Freedom Weekend event in Phoenix, Arizona, where we uncovered the truths about money and how not understanding those truths hinders one’s potential for success.
My clients with the biggest cash flow problems tend to be “feelings” people. Instead of using facts, logic, and discipline to guide their decision-making processes, they put their emotions in the driver’s seat - and that is where the problems begin. These doctors have great work ethics and the right intentions, but because they let emotions dictate their decisions, they are still unable to get ahead financially.
When it comes to making money, there are some basic “rules” you have to follow. If you follow the rules, you will make money. It’s that simple. But if you never learn the rules or simply choose not to follow them, then you will forever remain exactly where you are today.
Below are some of the processes that provide a foundation for financial success:
1. Commit a portion of your income to giving.
Everyone thinks they need to be rich to give, but it’s actually the opposite. It’s simple. Pick a percentage—mine is 10—and give back that amount of your personal income and your practice’s profit every month. It might sound crazy, but by building this into your system, you will naturally learn how to create financial margin. You’ll be amazed that you are suddenly “able to afford” generosity.
2. Overdeliver on value.
I tell my clients that I can measure their patient experience by looking at their bank account. If they are regularly overdelivering on value to their patients, it will show. Overdelivery causes a reciprocal effect, which means more referrals, more collections, and more profits. What does your bank account say about your practice?
3. Implement discipline.
In order to gain full financial control, you need to remove your emotions from the process and put discipline in the driver’s seat. Implementing discipline into your daily financial routines will allow you to regularly pay down debts, make wise investments, and hone your decision-making skills.
4. Put up a firewall between your personal and business finances.
I see a lot of clients who allow their personal and business finances to blend together. It doesn’t seem like a big deal until problems on one side bleed over into the other. Create a firewall between the two by splitting up your finances into personal and business accounts, and be sure to keep these areas separate.
5. Track your net worth (assets minus debts).
Many doctors choose to track only their income, which gives them a false sense of confidence and security while potentially plunging deeper into debt. Tracking your net worth gives you an accurate picture of your personal and professional assets, as well as your debts, and will help you to make more informed financial decisions.
If you’re a private practice owner struggling to stay afloat, take heart. It’s never too late to get your finances in check and control your cash flow. Just remember to replace your feelings with objective discipline and be intentional when executing a plan.
Author’s note: Not sure where to begin? Increasing your new patients is a great way to jump-start additional revenue in your practice. Go to 5starchallenge.com. We will conduct a mystery call and show you where you are losing thousands of dollars each month. We will show you how you can start capturing that lost revenue.
Jay Geier is the founder of the Scheduling Institute and creator of the world-renowned five-star telephone training program that has revolutionized the way dentists attract new patients to their practices. He is finally revealing his secret for record-setting results, 600+ new patients in one week. Visit schedulinginstitute.com/DE to learn how he did it.