The only statistic that really matters regarding the health of a dental practice is cash. If a practice has cash, it will be successful -- end of story.
Always know how much cash you have. Most dentists cannot answer the question on any given day about how much available cash they have. We suggest that a doctor check the amount of cash that the practice has available every morning. Within a few weeks, it will begin to tell a story, and cycles will emerge.
Don’t forget about your debt. Keep in mind that in addition to cash, debt must also be considered. Many practices have debt: long-term leases and other obligations that they don’t think about when they look at a profit and loss statement reflecting the current month. When looking at the monthly profit and loss statement, it doesn’t reflect the real financial picture of the practice because it doesn’t show annual or long-term debt.
Dr. Roger P. Levin is CEO of Levin Group, a leading practice management and marketing consulting firm. To contact him or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit LevinGroup.com or email [email protected].
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.
