Picking up right where we left off last week as we continue our discussion on your practice profits coming from the top (not the bottom) line. Hopefully, you have been doing a very aggressive and thorough reassessment over every aspect of your practice and every place where diagnosis, treatment, and dollars come into – and go out of – your practice.
There are at least a half dozen strategic ways to add to your top line, swiftly and sustainably without adding any stress or expanding time, people, capacity (the only limiting factors in dentistry).
If you commit to these strategies, you will discover so much found money just by shifting paradigms, adjusting approach, and opening up the flow of opportunity in your practice. This new money, in case you need a reminder, represents new health outcomes delivered to patients.
Maybe one day I’ll do a ‘found money’ special report or all the ways to add to the top line from the obvious to the unobvious, from the easy to the more complex.
Today, as promised, I’m arming you with the tools to get money out of your practice and creating a profit stream into your life, so you aren’t just working to pay the bills and allowing the practice to just eat all the money that comes in.
There are four fundamental steps to writing the practice paycheck you deserve.
First is your perspective. You must give yourself permission and set not just the intention but the determination that this is your goal.
You can’t feel queasy or guilty about it. You can’t sugar coat it and make it out like you are just doing this for fun or for entirely altruistic motivations. You have to play to win, practice to profit.
When you have given yourself this permission, you have given yourself the most important part of the entire thing.
Next comes your responsibility to know exactly how your practice becomes profitable for you.
You have to know the exact overhead that is necessary for your business to support your lifestyle and dreams, not just your dentistry.
This is comprised of two critical numbers… the number that makes your practice work and the number that makes your life work.
The sum of these two figures is what I call “the magic number” – the number you need to hit each month to reach your income and wealth goals. This is the only profit formula that matters. It is not a percentage, it is not arbitrary, it is not what is left at the end of the month. It is precise, predictable, pre-planned, and literally engineered to occur.
You can always make it more… you just can’t accept less.
The third part of this is to organize a systematic approach to get money out of your practice logistically.
Of course, you have your salary. This is what you are paid to do dentistry. This should be enough to consistently fund your life and to take care of your long-term wealth building (at the base of my wealth pyramid structure).
Beyond that, your financial freedom income comes from owning your practice, the profit that flows out beyond the two-part overhead structure (above the magic number I described earlier).
For my Wealth Group Doctors, we have a very deliberate, multi-faceted structure to set this up to feed and fund, serve and support all of your bigger life, wealth, bucket list goals, and long-term objectives.
The most basic ones are…
Every single month be sure that you take all the surplus cash that is remaining in your business account (above whatever cashflow cushion that gives you peace of mind for your own comfort) and deposit it to your personal account.
If you don’t know what this should be for your practice or perhaps where to even start, we should talk. I provide customized Profit Blueprint Strategy Calls on exactly this (and so much more, of course.)
The next part is to set a baseline investment goal with a pre-determined number reverse-engineered backwards from your remaining working years and total wealth target to find a daily and/or weekly amount that you will commit to taking off the top in a pay-yourself-first fashion. This could be $100 a day or a $1000 a week or more. Do something routinely, on auto-pilot, and let it run.
Finally, if you have anything in particular that you want to invest in for your future such as equipment or other technologies or continuing education or team experiences then use my bucket method I teach my Wealth Group which sets up a secondary flow of cash that is for – not the bills of the moment but – the investment of the future for your practice. These are the things that rob you of your wealth because there is always something that you want to buy. Most doctors allow this to be the first dollars out instead protecting the profit.
The fourth part of the plan for getting the money off the top and into your life, as business owner and investor, is finds ways to expand the profit of your practice.
If you just focus on covering the overhead or even just hitting the baseline goals – by the way that depends on if you even have the right goals set – you will only reach the lowest bar set. It’s vital that you are paying attention to the numbers and leverage factors that actually matter.
Lastly, remember this, no one on earth benefits from you making less money, not one. Everyone in your ecosystem benefits from you making more money.
So, back to the question of how do you get the money out of your practice that you deserve? There is only one way: earn it. You get to decide if you do it the strategic way or the happenstance way.
You do get to write your own paycheck, you just have to create enough value to have the money to back it up.
If you are ready to super charge your prosperity and grow the profit of your practice by being a more deliberate practice owner… then you’re in luck. I have added a very limited number of openings to provide our Weekly Report Doctors with an individualized Profit Blueprint for building practice profit, lifestyle prosperity, and long-term wealth. You can grab a spot before they fill up here…