Profit First for Dentists, with Barbara Stackhouse

Do you want to be more profitable, and enjoy the success of a thriving business, instead of running ragged on the hamster wheel of chasing the next sale? Barbara Stackhouse is writing Profit First for Dentists.  https://www.youtube.com/watch?v=EzsWDyjLA2Q Sound familiar? It’s the specific application of Mike Michalowicz’s Profit First system, tailored to the dental industry, with their unique challenges and solutions. So, if you’re a dentist who would like to build a successful practice, or a chiropractor or physician, or even a business owner in another industry who wants to find out the secret code to profitable and sustainable business… tune in below! Table of contentsMike Michalowicz’s Profit First SystemLeave the Grind BehindThe Sales ProcessProfitability in Any BusinessSolving Business ProblemsFixed vs. Variable ExpensesPut Systems in PlaceWhy “Profit First”? Links MentionedAbout Barbara StackhouseBook A Strategy Call Regardless of your experience in the dental field, we think that Barb has amazing lessons to teach business owners. Her experience in Profit First systems make her an expert at organizing systems that help you keep more of your revenue. Mike Michalowicz’s Profit First System After discovering Mike’s Profit First system, Barb could instantly see how the Profit First system fit into the dentistry field, despite being a system geared towards CPAs. She contacted Michalowicz to see if she could go through his professional training process, despite being in a completely different industry. Now, not only is Barb a certified Profit First professional, but she is releasing a book for dentists to implement this process.  Leave the Grind Behind [7:50} “If you’re an entrepreneur, you get stuck in the grinding it out. You're the technician in the business, you’re the person doing it all. And it doesn’t have to be that way.” Too often, entrepreneurs enter the business thinking that they HAVE to be un-profitable for a while. They grind and work hard, and hope that in five years, their business will be where they want it so they can slow down a bit. To Barb, this couldn't be further from what should happen. Instead, entreprneuers need to work smarter and build out their own profit, so that they can be prosperous now, enjoy their practice, and set it up for decades of success. The Sales Process [8:11] “So the main other thing that I talk about—which is another big area that dentists struggle with, and even team members sometimes need training with too—is kind of the sales process in dentistry. And it’s actually the same sales process that I use myself when I talk with a client. It’s all about serving that client. And really putting the need for the sale over on the shelf and just connecting. Having that relationship first and not pushing.” Through her work, Barabara created a system to facilitate this sales process, called P SERVE. The P stands for purpose, and Barbara urges dentists or team members to understand their purpose before taking a call, and then truly giving service from the heart. SERVE, as an acronym, describes the steps in the process.  This methodology is something that Barb speaks on and teaches—to help dentists serve their clients first, knowing that the profit follows. Money flows by creating value—so serving and giving allows any business to flourish. This is very similar to Bob Burg's Go Giver mentality. [10:34] “The more you help people get what they want, the more you will get what you want.” Profitability in Any Business [10:53] “If you are an entrepreneur, and you open a business, you have a dream of being your own boss, probably. You want to call the shots. These are the common themes that I find. But you have to make a living at it. If you’re not profitable, then you have a hobby, you don’t really have a business. So I think that profitability has to be baked into the plan, if you will. It has to be a part of what happens from the start.”  What Barb has found in her coaching is that too often dentists opening their own practices aren’t paying themselves when they start out. What she helps dentists learn is how to pay themselves first so that they can continue to keep their practice open. It starts with having a plan.  The problem is that many businesses don’t follow a “Profit First” mentality. Entrepreneurs expect to not be profitable, or they’re "waiting for the leftovers." It can be rooted in scarcity thinking, yet once you pay yourself first, AND offer value to your clients, you can find true profit.  One key problem? People don’t really know their true overhead.  Solving Business Problems Here's what Barb identifies as some of the key problems that dentists or other independent medical practices face: [18:50] “So I would say that one of the big ones, especially now post-covid, is team. Its sad, but a lot of team members left the profession, because of covid... So there’s been big changes in their practice. Not all, but some younger teams.”  Barb has noticed that in dentist practices, one of the biggest expenses can be the team members, however they can also be the biggest asset. When team members leave or retire, this can change an entire practice. Often, clients become accustomed to the team members, and form relationships with them too--they can have a huge impact on client retention. And of course, the second problem is personal debt. Many dentists have mountains of student debt and don’t have hope for getting out of it. Then, of course, many dentists don’t know how to read their profit-and-loss reports and see how debt factors in. They wonder where their “missing” money goes, and often it goes to debt payments that don’t appear on the reports.  This is yet another reason for entrepreneurs to follow the profit-first system: so that they can pay down debt AND save for their futures. It's important to save and/or invest while paying down debt, so that you can tackle emergencies and opportunities that happen along the road to debt reduction. If you don't pay yourself first, this becomes a challenging task. Fixed vs. Variable Expenses [26:53] “The difference between fixed and variable: fixed expenses generally stay the same, or about the same, every month regardless of what the production and collections does. So in a dental practice, we’re producing, we’re delivering dentistry, we’re collecting that money. And we have these fixed expenses such as, I already mentioned, our team. So payroll expenses typically one of those things that are about the same every month, you know doesn’t really fluctuate much. So, our rent, our occupancy... pretty much stays the same. We can plan on that every month. And then our equipment, and our build-out loan.” The three expenses above are the big, fixed expenses in a dental practice. These likely aren’t much different from other businesses. A retail store, for example, is likely paying the same fixed expenses—payroll, rent, and leased equipment.  [27:17] “Then we have our variable expenses, and in dentistry I have four categories for those variable expenses.” Those categories include: Supplies Lab costs (where tests are run, for example) Marketing Business admin expenses—credit card fees, telephone bills, etc.  Because these things are variable, you actually have the most control—contrary to what you may think. Barb’s advice is to start with these variable expenses (since your fixed expenses aren’t going anywhere). You do this by determining what your supply budget is and planning out what you will buy.  Put Systems in Place Anything you can do to increase efficiency and reduce costs helps everyone in the dental practice benefit. Barb often recommends that dentists who are interested in providing bonuses to their team create a separate team profit account. Then, if all expenses are paid and everything stays within the spending plan, once a quarter you can pay out profits to the team members.  Even better, if the team knows that there is a profit-sharing system in place, you can put them in charge of ordering supplies. Then they have incentive to work hard to stay within the spending plan and have what’s necessary for operation. The office becomes more efficient, and the employees know they get to reap the rewards too. Then finally, go through your line items and decide how to change spending. Determine what’s necessary for quality care, and remove what’s unnecessary, or get better prices or more efficient tools. Rather than having fiver different tools with five different functions, try finding tools with multiple functions. Ultimately, patients do not stay with your practice because of the tools or technology you have. This is true for dentists, chiropractors, or any other professional service. Clients stay with you because they have a good relationship with you.  Why “Profit First”?  [46:35] “[Profit First] is a cash flow management system that helps entrepreneurs understand that they have to flip the equation and set aside some money first, before paying all their bills. Because if you leave that money in one account, our nature is we will spend it. If we divide it up into multiple accounts, and we know what the purpose of those accounts are, our natural human behavior is that we will follow that system.” Links Mentioned Dentist’s Only Facebook Group Profit First for Dentists Facebook Page Email Barb at [email protected]  About Barbara Stackhouse Barb puts relationships and the success of others at the heart of all she does. Her focus is on teaching dentists the simple skills required for a highly profitable practice. Her profitability model uses the Profit First System. Dentists choose Barb when they want to take control of their finances once and for all. They want proper solutions using simple steps. They are seeking sustainable profits for years to come.