If you’re feeling the pressure of inflation and economic turbulence impacting your practice’s cash flow, you’re not alone. Dentists nationwide are facing this challenge, and according to Dental Post’s 2023 Salary Survey, self-employed dentists had to cut their pay by 2.25%, on average, to cover the increasing overhead costs at their practices.
That isn’t the only startling revelation found in the survey—of the more than 13,000 dental professionals surveyed, 30% are considering leaving their current employer within the next 12 months and plan to apply for a new job. Here’s a breakdown by position:
- 27% of dental assistants
- 31% of dental hygienists
- 39% of front office staff
- 29% of billing specialists
- 24.5% of dentists
If your dentist associates, hygienists, and front staff don’t feel secure in their role, what type of impact will that have on their performance? A negative team mindset will feed into your work environment, your patients’ level of care, and, ultimately, your practice’s cash flow.
Growing A Dental Practice: Start With Cash Flow
Like any industry, dentistry faces many challenges, with salary, culture, and employee appreciation being three significant contributors to the high turnover rates we see above. Each issue can lead an otherwise successful dental practice to suffer loss of efficiency and competent staff. Most importantly, in most cases, these issues are actually just symptoms of a more significant problem: cash flow.
You Can’t Cut Corners If You Want Better Cash Flow
Cash flow refers to the money that flows in and out of a business, and greatly affects how the business runs. A practice facing cash flow difficulties will notice other problems arise, and the reason is simple: cash is king. If there is a cash flow shortage, owners typically become unwilling to invest in important and necessary areas, such as their staff.
This coping mechanism of cutting corners doesn’t actually solve the problem though, a fact that Jay Geier, the founder of the Scheduling Institute, points out in a recent podcast episode:
“A good reminder for any of you in practice: there’s this thing called cash flow.
I’ve noticed that one of the wild and crazy things that happened coming out of Covid is that a lot of people had more money in their bank accounts, and now those bank accounts are starting to get a little skinnier. We’ve got increased wages.
And so, just as a friendly reminder, it is impossible to cut your way to prosperity. What has to be done is you have to have a growth plan. You have to create capacity, and capacity is what you’re responsible for. If you want to increase revenue, you have to increase capacity.”
To sum it up, if you want to increase cash flow, you can’t cut corners and expect to see results. Instead, you need to increase your capacity in creating value for your patients, and that will pave a path to better cash flow.
Dental Office Growth: Treating the Symptoms of Your Cash Flow Problem
There are a few undeniable truths in this world, and one of those is this: A dental practice needs a dentist. And to grow, it needs more dentists to take on more capacity.
As a practice owner, you don’t just want a large practice, you want a strong practice. For that, you’ll need efficient dentists to tend to patients and competent support staff to run the practice.
Your support staff will enable your dentists to work more effectively, allowing them to see more patients, while also ensuring those patients’ needs are being met, payments are being received, and all the other intricacies of operating a practice are running smoothly.
As a practice owner, what you want is to train a fantastic team, and then keep them. The best way to do that is to keep them happy and feeling satisfied. As the DentalPost survey shows, salary, culture, and employee appreciation are three of the most important factors in employee retention.
If these three factors are poor, those are symptoms of a cash flow problem. You can’t ignore those symptoms and expect the problem to get better. Read on to learn how you can begin treating those symptoms and pave a way towards better cash flow.
Symptom #1: Salary and Incentives
A practice must pay competitive wages to keep quality staff. Dentists and hygienists spend a lot of time and money on their education and expect their salary to reflect that. If a dentist’s compensation isn’t competitive, they’ll leave for a practice willing to pay more.
This goes for support staff too. If your front desk team isn’t paid well and leaves, it can cause a trickle effect. The remaining support staff becomes overwhelmed, burned out, and more likely to follow suit.
The ability to offer competitive salaries is directly related to the practice’s cash flow. A practice with a healthy incoming cash flow can invest it back into itself in the form of higher salaries and bonuses.
One of the best ways to make this happen is to provide bonus incentives that align all of your team members on the same mission. Let’s take your front desk staff: right now, they are focused on checking off all of the administrative boxes. But are they focused on helping your practice grow in new patients? Most likely, they aren’t. But what do you think would happen if they were awarded an extra $20 for every new patient scheduled? Their mindset would shift, and they would become more focused on bringing new patients into your practice, thus creating more cash flow.
Or, if your issue is that you’re overbooked and struggling with last-minute no-shows and cancelations, you can build an incentive program based around patient arrivals. Your staff would be more motivated to follow up with patients and send timely reminders to reduce last-minute no-shows.
Incentive programs are powerful. But for them to work, your team needs to get aligned and receive proper training to make those incentives achievable—which is an area of expertise we specialize in.
Symptom #2: Culture vs. Cash Flow
It’s not just salary that affects tenure, it’s the practice environment and culture as well. A practice’s culture reflects its values, behaviors, and success. A positive culture can be identified by its positive atmosphere and supportive and engaged employees. This culture will naturally foster a sense of purpose needed for employees to feel satisfied in their position.
A negative culture can be diagnosed by an unengaged team, poor morale, and internal drama and politics that ultimately create the toxic environment that leads to employee turnover.
Building and maintaining a positive culture requires practice to continue to invest in itself and its team. This can be done by implementing team building activities, employee engagement initiatives, continued education, and events or programs that maintain a team connection, healthy work-life balance, and a positive work environment. A positive practice culture needs a positive cash flow to allocate the funds needed to make that happen.
Symptom #3: Employee Appreciation
Each symptom is intertwined, and by now you should see the connections. If a company has a positive culture, then employee appreciation will naturally be a part of that.
Employee appreciation involves employees feeling valued and appreciated in their job. This is done through paying them a salary that reflects their contributions to the practice, as well as simply giving recognition and praise for the work they’ve done, both in evaluations and in day-to-day operations.
Celebrating wins—both small and large—is critical to keeping your team motivated and excited to come into work each day. Starting a recognition program or holding special events doesn’t need to be expensive as well. And if you create a strong incentive program, those bonus incentives don’t only put more money in your employees’ pockets, they will put more money in your own as well.
Remember, if employees don’t feel valued, it will lead to an unengaged, demotivated team with low morale. This circles back to the positive environment, if the engagement and morale dwindle, then it’s easy for a team to turn toxic and for employees to leave, causing practice owners to spend more money in hiring and retraining new employees.
When employees are motivated to work and aligned with your practice’s mission, they will help you grow, and thus grow cash flow.
Grow Your Dental Practice: Actionable Tips
Practice owners looking to grow their dental offices may find the above information troubling, especially if they’re facing cash flow problems.
The good news is that these internal issues are ultimately under your control, and even the small changes that you make can play a part in improving your practice. While recognizing the problems your practice faces is important, understanding and correcting the symptoms of the larger issue at hand is crucial for your dental practice success.
If your practice is facing negative cash flow or is demonstrating one of these symptoms of cash flow issues, contact the Scheduling Institute today to see how we can help increase your cash flow, improve your culture and team dynamics, and profitably grow your dental practice. Or, subscribe to the Private Practice Playbook for more tips in your inbox!