CHAPTER 3
The Importance of Knowing Your Numbers
If you are like many dentists in practice, you went to dental school to improve smiles and help people. Running a business was probably not one of your primary objectives. Yet, here you are with your own practice or even multiple locations. The investment in your dental degree and dental business are likely the most significant investments you will ever make. You need to ensure that you are getting a sound return on that investment.
How do you know if you are making money? To be successful, you must understand what your current financials mean and track them regularly. You may be thinking, “Hey, I already know I need to make more money; I want to start with that part.” It’s tempting, I know. But, think of the profitability of your practice as a map. When you look up a location on a map and try to make a plan to get to a destination, you must know your current location. This is the best way to determine how you are going to get where you want to go.
It’s not only important to know what you are tracking, but also the best way to track the numbers and what they really mean. You might be thinking, “Whoa, that’s why I have an office manager.” My hope is that you will trust me and listen to my advice based on more than twenty years of experience. Having a qualified office manager can be a vital component to growing and managing your business. Yet, if the office manager is the only one who knows your numbers, you are not only prime material for embezzlement, you are going to be in for a rollercoaster ride when your office manager leaves.
As the owner, you should have a better handle on your numbers than anyone else in the business. Yes, your office manager should know them too. You should share some numbers with your team. The more educated your team is about how to make and keep the business healthy, the more accountable and vested they will be in your practice.
In the following chapters we will look at:
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