Donald DeHaven, CPA | DeHaven and Company, Inc. | 10945 State Bridge Rd. STE 401-449 | Alpharetta, GA, 30022 | 404-902-6121

       

 

 

Don DeHaven, CPA

USA Dental CPA

DeHaven Inc.

 

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5 Essential Components of a Dentistís Compensation + 7 Profit Boosting Habits

 

The two major ways dentists can take money from their practice is through draws or by receiving a paycheck.

 

The type of entity in which your practice is set up will determine which method can be used. In either case, dentists need to be careful not to shortchange themselves.

Hereís a quick list of five elements that should be included in the compensation of every dental practice owner:

1. Competitive pay

If you were doing the same work for a practice that hired you, what would your pay be? Are you making at least market equivalent or better? A lot of times, as entrepreneurs, we tend to focus only on this piece of our compensation when we set our pricing, and thatís a big mistake. Itís only 75 percent of what our total pay needs to be.

2. Profit.

As a practice owner you take extra risk when you own your own practice, and you should be compensated accordingly. Your capital is tied up in your practice and should be earning a good return in addition to your reasonable compensation.

3. Benefits

Employees get vacations, health insurance, and bonuses; and you should too. This should be part of your compensation package as a practice owner.

4. Taxes.

Although our individual taxes are not deductible as business expenses, we need to compensate for them so that weíll have enough cash for our living expenses. Itís a huge chunk too. We work about three and a half months every year, just to pay for our taxes.

5. Retirement plan

When you work for yourself, no one is going to fund your retirement for you. Although the Social Security program helps a lot of seniors, itís up to you to set up a retirement plan for yourself and if desired, for your practice staff. Failing to do so could result in your being forced into practicing dentistry many years past your target or typical retirement age. Or if you do retire, severely curtailing your current lifestyle.

Complete Compensation

Your compensation should include all of these components. If it doesnít and you feel like you canít afford to pay yourself that much, then your case & procedure pricing might not be reflecting all of these items correctly, you might have a case acceptance problem, or your practice expenses may need some adjusting.

Itís normal to take a smaller paycheck the first few years as weíre building our practices, but if youíre still doing it after several years or constantly having cash flow issues, then something may be wrong.

If youíd like our help in this area of your business, please reach out and let me know at
(404) 902-6121.

Make sure your future is bright and financially secure by including all five components in your dental practice ownerís compensation
.

 


 

7 Profit-Boosting Entrepreneurial Habits

 

As an entrepreneur and dentist, you are responsible for shaping your practice success. Any habits that sabotage your success in your personal life can often carry over to your practice. Becoming aware of these is the first step to success.
 

Here are seven success-boosting habits to double-check against your own.
 

1. Being able to say "No."
 

Do you say "yes" to too many things that donít serve your life purpose, help your family, or move your dental practice forward? If so, youíre not alone. Saying "yes" in a weak moment when you feel like you can do it all can be a downfall for many entrepreneurs. It can also distract you from success if you are not working on the right things for you.
 

You may need to re-evaluate the value of your time and your priorities. Practice making smart decisions by having a structure and a higher purpose that helps you decide what you should and shouldnít do with your time, money, and life. And if you tend to be one of those who says "yes" to everything, you may need to practice saying "no" in front of the mirror to break your habit.
 

2. Hiring fast and early.
 

The best time to hire is just before you need your new team member. It can be easy to put off hiring if you fill with dread when you think about large stacks of resumes and endless phone calls. Not hiring soon enough can cost your practice in reduced service and sales. The smartest dentists stay ahead of the game in this area.
 

3. Strategizing proactively.
 

How much time do you spend in reactive mode versus proactive mode in your practice? Reactive mode includes answering emails, fighting fires, serving patients, and managing employees. Proactive mode includes developing & introducing new services, advertising & marketing your practice, creating and implementing your revenue plan, and training employees.
 

Sometimes we have to really push ourselves to look beyond the daily fires. One way to do that is to plan time every day for proactive activities and be ruthless about keeping that time slot on the calendar.
 

4. Setting tight scope and polite boundaries with patients.

Successful dentists set clear boundaries when it comes to delivering their services to patients. Especially in large practices where you delegate case presentation, it may not always clear to the patient what is included in their procedure unless itís clearly spelled out.

If you are asked to do something thatís not included in the procedure, you now have a choice. Do you give it away for free, or do you have a change order process where you can easily provide an estimate for that extra work?

5. Measuring results.

Only what can be measured can be improved, and smart entrepreneurs & dentists know this. Track -- in real time, not a year later -- whatís important to you. New patients, new leads, case acceptance, revenue per day, cases per day, monthly net income, certain costs, profit margins, profit per patient, profit per case, and profit per operatory are just a few of the many metrics you can choose to track for your business.

Once you measure it, you can now set goals to improve it.

6. Curbing irrational spending.

Invest in things that will last, such as your own education, great systems, team training, and assets that you really need. Avoid spending on items that are used up quickly, such as elaborate entertainment expenses that donít generate significant revenue, excessive utilities, and stopgap equipment.

This area can be a tough one to evaluate objectively because there can be emotion and attachment involved in the spending. Let us know if you need help in this area; we can help you look at your spending with fresh eyes and provide a new perspective.

7. Maintaining focus.

Great dentists have clear focus. If you have too many projects going on at once, you end up delaying all of your project completion dates, and nothing gets finished. Ask yourself, whatís the most important thing I can do today? And work on that until itís done. Then ask yourself the same question again, and wash, rinse, repeat your way to success.

Seven Habits

Which of the seven habits are you best at? Celebrate your natural gifts while keeping an eye on the habits you need to work on. That will move you to the success you deserve.

 


 

Remember you can call our offices if you have any questions about these or any other accounting, tax, financial planning or insurance related issues, at 404-902-6121. 

 

Regards, Don DeHaven, CPA

Principal DeHaven and Company, Inc.

 

Donald DeHaven, CPA | DeHaven and Company, Inc.

10945 State Bridge Rd. STE 401-449 | Alpharetta, GA, 30022 | 404-902-6121

email: dondehaven@usadentalcpa.com | Connect With Me on Linkedin

Office 404 902-6121 | Fax 404 855-3919

 

 

 

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