In the driver’s seat with an annual plan
Dentists often tell us that they feel as if they are being “held hostage” by their patients, and even their staffs.
Dentists often tell us that they feel as if they are being “held hostage” by their patients, and even their staffs. Do you want to be taken wherever the wind blows? Or do you want to be captain of your own fate? If you want to take control of your future, you have to set your own goals. Your ally in this process is the annual plan.
All successful businesses operate by establishing goals and implementing them in an annual planning process. Entrepreneurs determine what they want to accomplish in a year and break that down into challenging, realistic monthly goals. By having an annual plan that drives your practice, you can achieve more than you ever thought possible.
The starting point
Start by projecting your personal “wish list” expenses for the coming year. This determines the compensation you must receive from your practice to support your ideal lifestyle. Too many dentists take what’s left at the end of the month. As a result, they become the last priority to be paid, and they don’t take home enough to cover lifestyle expenses, debt, children’s college savings, and retirement funding (not to mention a return on their investment).
After estimating your personal expenses, project the annual business expenses of your practice. Under “major expenses,” include employee salaries and benefits, facility costs, dental supplies, lab fees, and practice promotion. Also include “minor expenses” such as office supplies, telephone, and insurance policies, as well as “discretionary expenses” such as loans.
Once you have estimated the next year’s expenses, project the production needed to pay them. Each year, you will likely forecast an increase in production over the previous year to meet the goals of your annual plan. How do you build a production increase into your plan? Do this by determining the previous year’s production of the dentist and hygienists. Divide each provider’s production by the number of work days that provider will work in the coming year. Add an appropriate incremental increase in each provider’s production for each quarter. This gives you a new and higher production goal to aim at each quarter.
Ways to increase production
How do you achieve these increases in production? That’s for you and your team to strategize. Consider the following:
➥Buying equipment or honing office systems to make your practice more efficient.
➥Attracting new patients through effective internal and/or external marketing.
➥Raising fees or presenting more comprehensive treatment.
➥Offering new financial options that increase case acceptance.
➥Any combination of these and other factors.
Track monthly statistics
An annual plan with ongoing, monthly statistical analyses holds your feet to the fire that you ignited. The monthly statistics measure important parameters of your practice success, such as production, collections, new patient count, expenses, etc., and tell you if you’re on target to accomplish your annual plan. This tracking is very important to prevent you from getting buried in the day-to-day minutia of the operation and to keep you focused on your goals. As Dr. Jim Pride always said, “If you want to achieve your goals, you must inspect what you expect.”
When you and your staff exceed your monthly goals, it’s time to celebrate, acknowledge, and reinforce your success. When you fall short, it’s time to strategize on what to do differently. This process of planning, implementing, and tracking results puts you in the driver’s seat of your practice and your life. Don’t wait for New Year’s resolution time to make your commitment. You can create an annual plan at any time of the year - and the best time is now!
Amy Morgan is chief executive officer and lead trainer of Pride Institute, a national dental-management company that provides consulting services, educational seminars, patient charting, and staff-training materials. To ask Amy a question for this column, visit “Ask Pride” at www.prideinstitute.com, or call Pride Institute toll-free at (800) 925-2600.