subject: Dental Marketing & Money Management For a Local Dentist - Part 1 [print this page] Dental Marketing & Money Management For a Local Dentist - Part 1
Dental Marketing & Money Management For a Local Dentist - Part 1
- An Interview with Sandra Simmons - Dental Expert Advisory Series
Part 1 of Interview
Kent Harlan: Hello, and welcome to the Dental Expert Advisory Series. My name is Kent Harlan with Ozarks Capital Funding and todays topic is the creation and enhancement of wealth for dental professionals. To gain insight into these all-important concepts, I have as my guest expert, Sandra Simmons, owner of Money Management Solutions. Sandra, how are you doing today?
Sandra Simmons: Im doing great Kent, its good to be here with you.
Kent Harlan: Sandra, youve consulted many dental professionals in your career. Do you think dental schools do an adequate job of training dentists in the area of money management?
Sandra Simmons: No, unfortunately, Money Management is not taught in any school. The practice owner may get a short course on accounting, but accounting is NOT cash flow Management or money management planning. Theres a big difference between the two.
The only thing an accounting program can do is tell you what happened in the past how much money came in and where it was spent, so if a practice owner is looking at how much it has cost them to make payroll and pay the bills, and thats the income target they are going after, then they are actually aiming for a break even target. As costs go up they tend to start losing money. Then they just pay bills as they get them so, in essence, the cash flow controls the dentist, rather than the dentist controlling the cash flow.
On the other hand, if they are actually doing cash flow planning, or money management planning, then they are setting an income planning target to do better than break even, and once the money comes in, they are planning how to best use that cash to not only pay the bills, but also to have more money stashed away in savings for emergencies and long-term wealth building.
The way to do that easily and effectively is not taught in any school. Thats why I developed the Money Management Solutions software program and training course to train the business owner how to do that for themselves, and to make it possible to do their cash flow planning in 20 30 minutes a week. That puts the dentist in control of their cash flow, rather than their cash flow controlling them.
Kent Harlan: So what I think youre saying here is the dentist should become more forward-thinking rather than simply reviewing past results.
Sandra Simmons: That is absolutely the most important thing that the practice owner can do. Thats think and plan in futures, instead of making financial decisions based on what happened in the past. You are absolutely right.
Kent Harlan: That makes a lot of sense. As an expert in helping dentists optimize their cash flow, what general areas do you feel these professionals could improve their operations to achieve the maximum amount of profit?
Sandra Simmons: Typically, budgeting is the biggest area because the practice owner has to know exactly how much cash flow they need each week to do better than break even.
They have to factor in not only the increase in the cost of doing business each year, but also the money they are going to need for handling emergencies, expansion of the practice and for their own long-term retirement plan. I call that the income planning target.
As you know, the first thing my software program does is quickly show them exactly how much money they are going to need to bring in each week to meet that income planning target, and only then they can they really figure out how many patients each dentist and hygienist needs to see each week to meet the target.
And once the cash comes in, we use the money management system to make those patient targets happen through promotion, and also by portioning out the income they did get in to pay bills, pay off debt, expand the practice and set aside what we love to call buckets of cash for the practice owners long-term wealth building program. Its a very simple, but very powerful process.
Kent Harlan: Well lets just say the incoming cash doesnt meet the target, does the program allocate the deficit to the various outflows?
Sandra Simmons: Well, the program helps the practice owner decide how to do that without cutting back in areas that would harm production. Money is always allocated for things that will increase income:
For example promotion. But the planning program is a process for the individual practice, its definitely not a one-allocation-formula-fits-all program. So the practice owner is going to have to make some decisions for their particular practice.
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