I’m going to share what I’ve learned by working with successful dentists: the top 10 keys to creating wealth for you and your family.
As dentists, you are in a unique position to control your destiny. Even if you are working right now as an associate, you can still implement these key strategies to build wealth and build your practice in the near future. A great insight – you are really an entrepreneur whose specialty is dentistry.
While these insights are definitely not the only ones, I believe that if you will put them into practice, it will give you clarity, confidence, and focus not only about your financially secure future, but also an extraordinary practice and life.
Focus on What’s Important.
Thinking like the entrepreneur that you are (recall, you’re an entrepreneur whose specialty is dentistry) – If you could ONLY do one thing tomorrow to generate income, what would it be?
My bet is to service the existing patients you have on the calendar. Your first & best use of your time is to service & keep happy your existing patients.
What’s the second best way for you to generate income tomorrow? Maybe it’s filling up any “empty” spaces you have on your calendar.
How about the third best way? Maybe it’s new patients (referrals & marketing). That focus alone will add cash to your bottom line.
So the question is, “What are 2-3 things that I can focus on that will add value to my bottom line?” As we’ve all heard – work smarter, not harder. By focusing on what’s important you’ll achieve faster & more impactful results. Your focus is to increase the amount of time you spend on income-generating activities and decrease the amount of time spent in non-productive activities.
Constant and Never-Ending Marketing
Again, thinking like an “entrepreneur,” there are many opportunities for you to do this. Every patient interaction is a chance to create a raving fan, for you to “market,” to create a “wow experience.” Let’s go back to what your mother told you – treat people the way you’d like to be treated. What’s the patient experience when they enter the office? How friendly is the receptionist? The hygienist? What would you like to see/feel if you were a patient?
Additionally, I’m a strong believer in having a marketing message, knowing your target market, and using the right media to communicate to those prospective patients (internet, direct mail, etc). Furthermore, you need to have a specific budget set aside for marketing and a way to measure your ROI (return on investment) each and every month.
With solid & consistent marketing in place, you will have a consistent flow of new & recurring patients into your practice and a consistent income that can weather economic ups and downs.
There is Good Debt & Bad Debt
There are loans still available for purchasing a pre-existing practice that demonstrates good cash flow. Acquiring a practice can grow your own personal wealth. You must also consider your student loan debt.
It’s easy to get caught up in the next shiny object ( I-Cat, Laser, Cerac). However, a closer evaluation of the benefits of borrowing to pay for these pieces of equipment needs to come with a realistic appraisal of what those investments can provide as far as income to the practice. In other words, buy equipment that “adds value” to your practice – either monetarily or to the patient experience.
Conduct a total debt audit for your personal and business debt. Are there opportunities to consolidate and save on your monthly payments? It’s possible to free up a few thousand to tens of thousands per month with a good debt management plan.
Be in Charge of Your Checkbook
Too many dentists entrust check writing to their office manager or bookkeeper. The best way for YOU to know what is in your practice bank account is to be the one writing the checks. Your bookkeeper or other employee can enter the bills, but you should be the one to authorize and sign the checks. There are too many cases of embezzlement that go undetected for years, by giving too much power to key employees in the check writing and signing department.
I’m always surprised when I ask doctors some general questions about their practice productivity and income, and they say need to get back to me because they really are not sure at that moment. YOU need to know all the time what is happening with the income and production in your practice (your Key Performance Indicators Dashboard)!
Invest Your Hard-Earned Dollars Wisely
I can’t tell you how many doctors have told me – I wish I had followed this advice a long time ago. I don’t even want to think about the hundreds of thousands of dollars lost on investments and opportunities that were “too good to be true.” (And they were!)
Make sure you have financial advisors who understand the business of dentistry. Your CPA and financial advisors are key persons in your financial life, and they should be able to advise you on the best way to save on taxes, invest in your practice, and invest in your retirement and family’s future. Make sure you ask questions and are constantly looking at your practice numbers on a regular basis.
There are some fantastic consulting groups available that specialize in the dental field. These professionals understand the business and investment needs.
Your Mosaic Tiles
I like to think of your life as a group of Mosaic Tiles – each part is unique & different. But you want to make sure all the “tiles” are working together to create a beautiful Mosaic for your life. Following this analogy, you have a Dental Practice Tile, a Real Estate Tile (your home, office building, vacation home), a Retirement Tile (an IRA, 401k), and an Investment Tile (investment savings outside the business). No one tile should dominate your Mosaic.
Here’s a big shock to many dentists – your practice should NOT be the biggest Tile in your retirement picture. After you sell, pay off debt, taxes, fees – it’s generally 1.25-1.75 times your annual income – who can retire on less than two year’s worth of income?? So your practice will only be 25-35% of your retirement savings.
As the saying goes, don’t put all your eggs in one basket. As a dentist, you should work hard to build wealth in each of your Mosaic Tiles; maximize the benefits of each. There is no better way to build wealth in America than to be a business owner! So find out what YOUR retirement number is – failing to plan is planning to fail.
Guard What You Read and Watch
It’s easy to get caught up in the negative news around us today. The bad news is ALWAYS the first news of the day, and sometimes that’s all we hear about. Focus on the things that you can control. One dentist said it best – “I focus most on my personal environment. I can influence the way I live, my home & my practice – my own personal economy.”
Be Willing to Work on Your Practice
Most of you reading this are working very hard at making your practices profitable. In fact, I would say most of us are most likely working harder than ever to earn the same income you were making back in 2007.
You should consistently work for clarity, confidence and focus on improving all aspects of your practice. Increased efficiency through better scheduling of patients and employees, strategic planning for new products or services, and a tactical approach to your marketing do not happen on their own. That said, focus on what you’re good at and outsource the rest (there are people more qualified and enjoy those parts of the business. Find them and pay them so you get the benefits while enhancing your quality of life). The doctors I know who are “crushing it” are working ON their practices, not just in their practices.
Surround Yourself with Like-Minded People
Spending your time around people who are positive, encouraging, optimistic, and willing to share what they know is a recipe for a successful professional and personal life.
On the other hand, hanging around negative, pessimistic, discouraging, and secretive people can cause you to become the same way. And more importantly, can affect the experience of your patients, and thus the profitability of your practice! Make an effort to avoid these types of people who only bring you and those around them down.
Invest in Yourself
Many of us are working hard to put our kids through private school and college. How much money are you investing in your own education? It’s important to continue to grow your skills in your profession from a clinical as well as a business standpoint. When was the last time you invested in helping you become a better entrepreneur, a better business owner, a better marketer of your dental practice? When was the last time you invested in a new skill you could add to the list of services you offer your patients?
Investing in you is also spending time reading and learning online through webinars. Many of these opportunities exist at a minimal cost, and you can do them in the comfort of your own home.
Use Coaches and Mentors to Help You Achieve Goals
I wish I had done this before I opened my own business. I’m positive I would have had less initial hardship and more income generated immediately. Most of all, I believe I would have become a better leader, employer, and entrepreneur early on with the right coach or mentor.
We all know that the best athletes in the world have a coach or even multiple coaches to help them become the best they can be. Even professional golfers, like Phil Mickelson or Tiger Woods, employ a whole team of experts – a golf coach, a trainer, a mental coach. How do you think that the best get better – luck?
Coaching and mentoring are not just for professional athletes and top CEO’s. They are for anyone who wants to grow and have an amazing business, professional practice, and personal life.
Take Action Now
All of the successful people I’ve met in my life are action takers. They do not sit around and wait for the right time (there’s never a right time!). They move forward with a plan of action quickly and with persistence. Quit thinking of things as failure or success. It’s a process, not perfection. Think of a failure as “market research” – you tried it, it didn’t work, what can you learn from it, and apply going forward.
How many times did you let your baby fall down while trying to learn to walk? Did you ever say, “You tried and failed; guess you’ll just have to crawl?” No, you encouraged them to keep on trying until they became successful – learned to walk and run. Provide the same courtesy to yourself – remember it’s about progress, not perfection!
- Identify the 3 things you’re most frustrated about, as well as your ideal result.
- Once the ideal result is identified, determine the best strategy to reach that result over the next 30 days.
- Share these with your team. They can really benefit from helping you break through your own frustrations. Encourage them to create their own 30-Day Sprint Plans.
Even small steps taken consistently and with persistence can make a big impact in your practice and personal life. The key to success for an entrepreneur who specializes in dentistry are clarity, confidence, and focus on your financially secure future, and also your extraordinary practice and life.
If you have any questions, feel free to reach out to me.