Thank you. Thank you. Thank you. I really appreciate the amazing comments and everything you have sent back to me over the past few weeks. I’m always inundated with feedback and stories of success. I’m grateful for it all throughout the year, but these last few weeks really struck a cord with the outlooks for next year and the mindset shifts required to really position yourself for wealth and prosperity.
I write for you.
I serve you.
I am here for you.
Independent, ambitious-minded dentists who are entrepreneurial in nature, they (you) desire to be in control, want to be paid what they are worth and fully utilize your skills. You believe in not cutting corners or taking shortcuts on patients’ health so you can have a practice that you are proud of.
You honor me and my writing and contribution to our industry with your actions. Thank you.
One of the comments I received last week was, in so many words asking about what I meant when I said “the practice will eat the profits.”
And this is one of the single biggest issues for dentists who often make a lot of money but don’t have a lot to show for it.
There are three aspects to this and I’m going to elaborate on them today because it is very important as you move forward into the new year and set your new objectives and income expectations you must have these in place or you will sabotage yourself and you may not even know it.
First.
You have to grasp the fact that your practice is a business asset, an investment, a vehicle for you to earn your wealth and prosperity for your life. I mean technically you don’t have to grasp this, you will just suffer (and maybe already are).
Any dentist can learn certain skills and make money being a dentist and I want them to. You can be an Associate, you can work for the government, you can participate in lots of different programs and business opportunities. You can even teach or train or lecture.
You have invested in yourself and you will generate a return on that investment in the form of your paycheck on your production.
I personally work with and have coached some of the highest income earning Associates in the entire history of the industry who work for my clients. I can almost 100% of the time take an Associate and have them out earning 80% of all independent dentist owners in a matter of months, certainly a year.
The point is, for practice owners, it doesn’t stop there. You not only invested in yourself but you created a business around your skills and that is now another asset that is supposed to be giving you a return.
And when I say the practice will eat the profits it is most commonly because the dentist doesn’t expect there to be any profits. These dentists expect to earn their money as a dentist and then they just feed the business everything else that is leftover.
Because they do not have a deliberate and structured plan and expectation for pulling money out of the practice and putting it into other things.
The practice is your wealth vehicle. That’s what you signed up for. That’s the point.
If you leave the money in it, it will be gone and it will never go to work for you.
You can invest in building a bigger building or producing more dentistry or growing your team (all things that you must do), however your ultimate return on your practice is limited.
It would be completely foolish to reinvest that money into the practice, the point of wealth is to take money off the table. Some doctors are so stingy that they never achieve any growth because they never re-invest in the practice. They squander all of the profits. But others, instead of taking it out, they keep it in; they then have nothing to show for their own business investment expect the value of the practice and a typical professional’s retirement savings that you will most certainly out live.
A business is suppose to spin off profits so that you can diversify into other investments and then multiply your income streams.
If you aren’t doing that then you are earning your money as a dentist but not as a business owner. You are getting paid to do dentistry but not for the sacrifice of owning the practice and developing your business asset.
So. How?
Well, for some this is very basic, but it begins by knowing your overhead and also knowing your potential (which in dentistry is nearly unlimited because you can have a $3,000, $7,000, $15,000, $30,000, $70,000 day in your practice and it has absolutely nothing to do with your production but about the dentistry you sell).
Now, you can also grow income streams inside of your practice even if (perhaps especially if), you are not doing big full mouth cases. You can grow niches (sleep, tmj, invisalign, laser, smile makeovers, botox, and I could go on and on and on with the list of varying niches), that can serve you as little businesses inside of your practice.
Plus you can have Associates, you can grow hygiene, you can have other health services inside of your practice or building.
My point is: your potential is not just what you hands can do but what your practice can do.
From there you have to establish your salary as if you were paid to be the dentist doing the dentistry. Then you need to organize your life around that salary and save money, fill up your retirement and live whatever lifestyle you want within that amount of money. That will free you up to take the profits of the practice and start using those to grow your wealth and your investments.
And that is a topic for another time.
Additionally, you want to allocate a portion of your “overhead” for developing your team, for replacing equipment, for doing continuing education or for practice improvement.
That way when you have excess (and the point of the business is to grow the excess profit every single month of your life), you take that out as fast as you can and move it away from the practice so it doesn’t get eaten it up forcing you to start all over again.
The biggest “eating up” of the profits is the Dentist Owner not knowing how to be an Owner and not treating the business like an investment that is supposed to pay out dividends to the shareholders (even if there is only one) plus of course paying out some to the team who helped make it all possible.
I said there were 3. There are and I will give you the other 2 next week.
For now, this should give you a lot to think about and assess. If you’d like to talk through it with me, given your personal and specific circumstances and/or questions then click below. I’m happy to, it’s the end of the year, I’m in the giving spirit and absolutely love this money stuff…
