By: Seth Hillis, Crown Tenant Advisors
According to Inc.com, saving money is one of the top five New Year’s resolutions and also in the top five for most commonly failed. I can’t help you “eat healthier” (#1) or “exercise more” (#2), but I can offer advice on how to “save more and spend less” (#4) when it comes to your dental practice.
1. Plan your work.
It’s the most wonderful time of the year. A time to reflect on your achievements in 2019 and a time to look ahead to what the new year may bring. Take a moment to think about your overall vision for your dental practice. Visualize where you want to be by the end of 2020 and what it will take to get you there. Build a business plan outlining your goals and the tasks you must complete to stay on track to meet them. Set your annual budget and be sure to include line items for marketing, equipment, staffing, etc.
2. Reevaluate your real estate.
I know there is barely enough time in the day to see all your patients, much less think about real estate. The truth is a dental practice’s real estate costs are typically one of its highest fixed expenses, behind payroll. Understandably with all the daily demands of your practice, once established, not a lot of attention is paid to this very high cost. In fact, this expense is the most negotiable and can provide an opportunity to positively impact your dental practice’s profitability.
There may be ways to optimize your current location to improve your bottom-line and help you meet your goals. If you own your building, consider possibilities for refinancing. If you are leasing your space, contemplate how it supports the vision of your practice. Is it too big…too small…out of date? Weigh all of your options. Based on your business plan, does it make sense to buy, renew your lease, relocate to a new space, add another office, or none of the above? Where are you in your lease term? If you are 12-18 months from lease expiration it is time to take action! More time equals more leverage. Negotiating the right terms can set your practice on the right path by minimizing overhead and out of pocket expenditures. By effectively restructuring your lease, you could drastically improve your bottom-line without working more hours, seeing more patients, buying more equipment, or cutting more expenses.
3. Work your plan. Now that you have a plan, make time to actually implement it. Institute monthly checks to ensure you are driving towards the goals of your dental practice. Consider having a healthcare real estate advisor review your lease to look for opportunities to save money. Acknowledge each milestone you reach and take a moment to celebrate your accomplishments, big and small.
About the Author: Seth Hillis