Dr Barry, 1m 43s:

Guys, uh Shishir and I are presenting now on what your accounts don't show you, but ultimately this is the 100k net profit gap. Uh and really this is about the stuff that people like me when I was a practice owner for 20 odd years, I wasn't aware of myself. You're meant to hear me, yeah? We need some fresh headphones. How dental practices move from a lack of financial visibility, uh, and it's powered by Dentpulse. Over the next 40 minutes or so, I'm gonna ask you where you are financially. We're gonna show you where your hidden profit gap is, and ultimately we'll give you a sense of how you can do this yourself, how you can bridge that gap, um, or you can have a conversation with us if you would like to. So I want to ask you now where you are personally, professionally, financially. Because most practices have spreadsheets, most practices have reports. Some dentists don't look at either, and that was me, right? But neither tells you what to do next.

Dr James, 2m 59s:

As ever, you can find your CPD for the steps code within the official dentists Who invest Smart Money Members Club. Smart Money Members Club also includes multiple mini courses and webinar series on finance for dentists, including how to become as tax efficient as possible, as well as understanding investing. All this content accounts as verifiable CPD, and you can download your certificates there and then on the test. In addition to this, we also include a whopping 10% discount in the dental indemnity and a 5% discount on lab bills for dental principles, amongst other parts and discounts for members. Please use the link in the description to claim your verifiable CPD for this episode.

Dr Barry, 3m 42s:

I'm gonna ask you, and you're not gonna raise your hand just yet. I'm gonna run through the options and then I'll run through them again. And I want you to raise your hand to really tell me what it is that you do at the moment running your finances. So keep your hands down for now. Firstly, some people have already got a financial dashboard. Other people have Excel spreadsheets, some use a mobile banking app simply to know where they stand, where they sit financially, what cash is in the bank, annual accounts, or finally, you run your finances by the seat of your pants. So, I'd like to have a little vote. I want you to pick one number only, and I'm gonna ask you to share with me are you number one on that list? Which of you have an accurate financial dashboard? Okay, five of you. Great. Are you number two? You use your Excel spreadsheets. Okay. This is about 10, 11, 12. Are you using a mobile banking app as your prime way of driving your finances? I love the honesty. God bless you. I would come and give each of you a hug. Annual accounts, who's simply using their annual accounts? Be honest. Okay, so then who's seat of the pants? Who didn't vote? So most of us are sitting within this framework. There was literally five of you that are actually using a dashboard. The rest of us are kind of doing an amalgamation of things, and that was me, without a shadow of a doubt. But the biggest issue that I had with having my accounts, personally, was it gave me insight into the past because it was retrospective, but it didn't give me any understanding of what was going on right now, right today, even the last couple of weeks. And it certainly didn't give me an insight into the future or help me do any future planning. Because everything I was choosing to do was based on the past. I've recently done some stuff on the difference between growth and scale. Growth is based on past figures. You look at the past figures and you go, oh, I'll add 10% to that, or I'll add 15% to that. Scaling is nothing to do with the past, it's all about the future. And it's about picking a number that scares you, and then reverse engineering how do I achieve that number? But even with the original thing of growth, it was based on old accounts. And for me, that was typically a year out of date. So let me tell you about a dentist that I know. Uh, this dentist built their practice over 15 years and built it up from pretty much nothing. It was single-handed and it was from scratch, and they took it to a 1.1 million pound turnover single-handed with a hygienist and just them clinically. And by any measure, people would say that that was a roaring success. And that was a point at 1.1 million was 10 years ago when they achieved it. And yet, through the 20 years of ownership, he was still stressed about money every single day. Yes, there was a high gross, but he didn't have control, he didn't have understanding. He found out about his tax bill often five days before it was due to discover what it was that he had to pay. Oftentimes he didn't have that amount of money in the bank account to pay that tax bill. It took five to six months to know whether an associate when they came on board was profitable. Couldn't work it out, just had to look at what was done and how it was done. This dentist brought equipment, assuming that he could afford it. And sometimes he could, but sometimes he couldn't. But he didn't know that for about three to four months. He had no idea which treatments were the most profitable. He knew which was the highest value, but hadn't worked out the time taken, the lab bill taken, the materials, the manpower, the woman power. So he didn't really understand what where the profit was. He had associates demanding 50%. Why? Because it was the kind of market norm, and he had no data to negotiate with that. And he and he was fearful of not getting the right associate. So he would cave in and give 50%. But he didn't know whether they were profitable or not. And ultimately, with those accounts, he was always working in the rearview mirror. Never really looking ahead. Looking ahead was based on the past, and it was based on how much cash do I need to survive. Does this sound familiar? Put your hand up if there's anything in that that is familiar to you. Be honest. Nobody's looking, only me. Okay, thank you for your honesty because I think we all have an element of this. You know, when I started to become a dentist, I hadn't planned to be a business owner. That wasn't, you know, the mission. The mission was to do dentistry. Ultimately, I wanted to own a dental practice, but I kind of became an accidental business owner. I knew nothing about compliance HR. I knew nothing about tax, accounts. I was reliant on other people for that. And actually, I didn't always get the best advice, I'll be perfectly honest. Until I met a gentleman who will speak to you in about five minutes to fully begin to understand it and involve him with my clients. Because within the system that you're operating, there's a huge hidden gap. And it really doesn't show you what it's costing you. And I forgive my profanity, but one of my phrases is it's really hard to fuck it up in dentistry. What I mean by that is we all earn an okay income, but we don't realize where the potential is that we can actually earn a considerable more, a considerably higher amount that would take away the stress, take away the worry, provide for our family, and actually give us something that maybe we don't have right now, which for most of us is peace of mind, confidence, relaxation. Now that dentist that had 1.1 million annual revenue, leave leaving over a hundred thousand net profit every year, was me. And to all intents and purposes, I was successful in my business. But I now realize that I had constant stress and worry because I didn't have my finger on the pulse. The uh it's the Ron Seal approach to apps, by the way. I didn't have my finger on the pulse. Uh and it it wasn't because I wasn't working hard, it's because I didn't have the right financial information at the right time. I got the information, but it was late. And it was stuff that I didn't really understand at the time. I didn't really understand a P ⁇ L. Certainly didn't understand the full set of accounts. If I'm perfectly honest, guys, I would get that letter that said you need to sign off on your accounts, and I would sign them very often without really looking at them, because if I looked, I didn't understand. Put one finger up if you're that, because I don't want it, I don't want you to put two hands up, but put your hand up if you're a little bit like me. Thank you. Some of you looking round, where is he? Because I don't want anybody else to see my finger go up. Okay. So not having the right information means that you're not making the best choices and decisions. That being said, in dentistry, it's hard to get it completely wrong. It's just it could be so much better with the right information. Um imagine what you could do with an extra £100,000 profit every single year. Imagine what you could do with that for your family, for your business, for your investments, for yourself. It's phenomenal. And that's what we are uncovering for our team. Now, I have been coaching in dentistry now for about seven, eight years. I've been full-time looking after clients for the last two, two and a half years. I am uniquely good at filling the bucket. What I mean by that is I help people to communicate more clearly, effortlessly increasing case acceptance, treatment, planning, and I make things kind of grow, right? I grow revenue, help people attract patients, I use psychology and NLP. But I have never really got into the numbers of my clients. And just under a year ago, what I was lucky enough to discover was Shashir. And what he is doing is he's finding the leaks in the bucket. So whilst I've been filling everybody's bucket and helping them, I've not been plugging any leaks. And this guy's now come along with my clients and he's helping them to fully understand what's going on. Not only where things are leaking, but also which taps to turn. When to turn something up, when to turn it down, how to make every pound work for you and your business harder than it ever has done, because we've just focused on growing the income. Let me share with you some of my clients that I've been looking after for a while that now I've involved with this information from Shashir. And by the way, we're gonna show you what you need to go and do yourself. You don't need us, you just need the information. But this is Irim, and we had asked her what was it like before you started to have the information? What was it like operating the business at the time? And what has it been like to begin to work with somebody that not only gives you that information, but is able to help you understand what that means? And so previously, she was running her practice for 30 years with the same accountant, same accountant who served her beautifully, but she had no clarity. She didn't understand KPIs, she didn't understand what a break-even was, she was just working really bloody hard. And now with this newfound information, she's completely confident. She's got goals, she's got a plan. And last month, she grossed the most she has ever grossed. She personally grossed, working three days a week, over £54,000. And when I started working with her 12 months ago, it was less than half of that. And this is not doing any different dentistry, this is communicating more clearly, but also understanding how the business functions and understanding her numbers. So she now knows her break-even, she understands her KPIs, and she's completely confident. She is a different human being now because of the information that's given her this confidence. Jen and David are up in the northeast of Scotland, and they have been working with me personally now for nearly four years, and we've had massive growth. But six months ago, they started to understand their numbers. And you know, hands up, it was not me. This is this is not my unique ability. Like I said, I can fill the bucket, but when we started to help them with the numbers, and that was Shashir, it's absolutely radically changed what they're doing. These guys have both cut down a day and a half a week, yet their turnover's gone up by over half. Their profit has equally more than doubled. And by having the right information and working with, to be fair, we're working with a great bunch of people at Medifinance, is that they are restructuring their debt. And that restructuring of debt has made these two £10,000 a month better off in their cash flow. We would not have been able to send them over to Jack and Ray if we didn't have the numbers. They worked with their previous firm and they had inaccurate books. Working along this progress, they've had multiple light bulb moments so that they're beginning to understand what's going on and they've got real-time visibility of their financial position. And so life is changing for them as individuals, as a business, but also most importantly to me as a family. They have their finger on the pulse of what's going on.

Dr James, 16m 15s:

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Dr Barry, 18m 5s:

Now, some of you are able to do that with Excel spreadsheets, some of you are able to do that with your accountants. That's amazing. Most of us don't. Most of us have not had that ability, most of us are not knowing what our associates, which ones are profitable, until it's too late. We're overpaying on labs, materials, and suppliers. And we got the wrong treatment mix. So, what I want to introduce you to is effectively the solution to all of this, which is having that information. And Shashir is going to run you through what that is that you can gather so that you can get the same level of information and start driving your finances in a much better way.

Shishir, 18m 47s:

The thing about finances is there's so many things to track to do. But I want to give you some key takeaways that you can do immediately in your practice and start making differences straight away. The things that you can do on Monday morning, the things that you can set up aside on a weekly basis. So rather than being like in a passive way of doing things, you can actually be in control. And the way I speak to dentists is more about you want to be doing the preventive dentistry rather than restorative dentistry, right? This is how you can make impact, this is how the patient would value you more. So the first thing that I come across is that, Sissy, why do I have profit but no cash in the business? This is one of the biggest things that I come across. So what I see is there are three things that's uh that that you're not doing. One is you're not forecasting your future, uh, your future. And what I mean by this is like you're not forecasting your cash flow, you're not you're not forecasting your treatment levels, and you're not forecasting what the associate production profit level will look like. That will give you a really indication into how you can do that. The second one is a time spending. What I mean by this is that I have a concept called cash flow future paying, which stands for CFFP. What it really means, like, how do you keep your today's cash flow intact in your business and use your future cash outflow, future class inflow to cover your future class outflow so that you always have today's money intact in your business. It's a concept that you can grow as. And the third thing is like the business, when you're at the stage, you're in over over debt leverage and you're growing fast, and you don't know what level of spending is required to actually maintain the working capital in the business and and also invest in the right areas to grow the business faster. So here's so here's how we can I'm just gonna show you the software, but I couldn't actually click the software and turn. Yeah, so here's the thing that what you want to be tracking, you don't need like a software to track this. All you want to be doing is looking at the top line revenue, net profit, and net cash flow. So you want to be tracking those figures on a regular basis, at least on a monthly basis. So that you're not only looking at one piece of information, and from what I understand, most dentists they work, they look at only the production only, and try to guess like, okay, if I'm my if I'm my production is X, then I should be okay. But what you really want to be monitoring here is the the net profit part, and along with that, net cash for how much cash you're cheaping on a uh on a monthly basis. And Barry, you need to be on second. Barry, you need to be on second. So how you can do that is to starting like a forecasting work so that you can see the future cash position today. That's crucial. Like think about this, guys. When we're driving, when we're driving, the further you can look, you can plan better, right? That is what has hazards. In doing the same thing, you're looking at a future cash position today, based on your historical past and present, what's happening right now, so that you you run you don't run into issues like, oh my god, I need to pay my taxpayer, I don't have enough money to pay tax. Because you know three months in advance, a six months in advance, then you can do something about it. So as you only do, like, you know, because only you know about treatment planning, right? So you do proper treatment planning of a patient, it's the same thing. You do you need to do like financial proper planning for your business. The second thing is uh what I get commonly like, where am I losing money right now? Is that one of the things that you get, guys? Put a hand up if that's the case. Where am I losing money right now? So in this one is The first thing that I would say is you need to start doing benchmarking for the business so that so you know what's going on. The second one is uh you don't know what the associate uh profitarity, the metric parameters are. The third thing is you might be operating on a wrong treatment mix in the first place. So what you need to be doing is you need to be benchmarking staff percent, materials, lab, associates, hygienists and therapists, overheads and all that. And in terms of associates, I'll calculate the operating cost per surgery per day, like uh profit centers, associate A versus B, at the same kind of treatment that they do. And uh for the treatment mix, you want to be tracking the most profitable treatments, not only the most high production values. So, how you can the way you can do this is I can show you, and we call this the profit leaks radar. Yeah, so so what you can see here, like a pie chart, like it gives you a breakdown of where you're spending the money, and then and you're tracking the expenses with the baseball. So you so you know that whether you're overspending, underspending, like where you are utilizing your resources, here's the thing money in the business is like a fuel, it's the energy, it's what drives the business forward. So you want to be mobilizing your energy in the right areas. The third thing, the third point that I get quite often is yeah, which associate is actually profitable. The thing is, what I've found is when there is a transparency between the data, there's so much trust between themselves and and and they work, they tend to work so much better. Because other one side says, like, I'm spending so much money running a dental clinic, and he doesn't, she doesn't get it because she just comes, and the other side is saying, like, well, I grow so much money, but he I'm only I only get 40%, 50%, I don't see half the money. But if you could be transparent about the data, imagine the impact that can have on a relationship working with continuity. So so what the thing is, what I found is they mostly track the production but not profitability. The second thing is there is no monitoring mechanism to performance, and there is no accountability of how you actually go about and do that. So what you really want to be doing is you want to be tracking most profitable uh profit per associate, not only just production, and I call this the apex engine because we are calculating associate performance efficiency engine. And the second thing is you want to be tracking the you want to be knowing like who uh who needs to be retained, who needs to be coased, who needs to be you know let go and for different reasons, so that I was just told I wasn't told like run out of time. So from watching the bank account, you know, here's Matt and Becky, and they just didn't know how these things operate. And and uh once we started working with them like seven months later waiting for the year end. They were really focusing on turnover and this bookkeeping was offloaded, and now they got the time back, and and they got uh it has a high impact on the business and profit values of the business. So so, in order to do this, you need to have a practice manager, you working in the business, you also need an accountant, you also need a bookkeeper, you might manage a TCO and a spreadsheet education business coach. You need to have all the people and process in place to have this information that I shared with you, or this is an option for you to do the simpler and faster, and it's only a proven way. You can you can do that using 10 false. Now.