#930: Getting To That 10% More
Tiff and Dana are here to gameplan your goals for 2025 by starting big and breaking it into smaller and more attainable pieces. They discuss aspects to consider, such as profitability, time management, tracking systems, and more. Episode resources: Subscribe to The Dental A-Team podcast Join Dental A-Team Consulting Leave us a review Transcript: The Dental A Team (00:01.106) Hello, Dental A Team team listeners. We are back here today. I've got Ms. Dana with me and we are here to talk to you about numbers today. I'm excited for this one. Practice owners, doctors, dentists, all of you guys out there, this is a really important one and Dana and I have some awesome information to really hand out to you. But before we dive in, Dana, how are you doing over there? How are you? We're wrapping up the end of the year. I know I've seen a ton of successes in so many of our clients. How are your clients doing? What are you working on right now with your clients? Dana (00:34.404) Yeah, it's great. 2024, I think was an interesting year for a lot of practices. I think different than some of the more recent years. But I think in all of that, practices are still coming out with huge wins, lots of growth, and getting patients to accept treatments. So I call that a win for 2024 for sure. The Dental A Team (00:52.836) Yeah, I agree. think there was a lot of... gosh. unknown uncertainties in 2024. I think 2020 we had some uncertainties too, right? We walked into the year with uncertainties, but then it kind of grew from there. And we've had just this massive growth in dentistry, I think since 2020 and COVID shutdowns. And this year, was kind of like, wait, hang on dentistry still doing fine. we're in a, we're in a recession proof industry, but what the heck is going on? And so there were just so many questions I think in outside of of dentistry and financially that it did lead to some oddities that we haven't seen in recent years, like you said, within the dental world. know a lot of my practices have been, I think they're coming out of it now, but we had some issues with confirmations or patients coming to appointments or pre-collecting, kind of making sure that those pieces were really dialed in and locked in, because I did feel as though here in the recent months, kind of September, October. some August really was tough for some practices in case acceptance, but then November hit got a couple weeks into November, how we'll say it and things just started to really turn around again. And I think again, there's so many uncertainties of the world translated into uncertainties within the dental industry and and Dana, I think you saw that too. Yeah. Dana (01:55.438) Thank Dana (02:15.363) Yeah. The Dental A Team (02:16.56) Yeah, well guys, we're on the other side of that. So this is the exciting part and this is one of my favorite times of year. I'm really looking forward to what's to come and we have to look at what was right to know what can be in many cases, but this is the time of year where we really get to dream up what next year will look like and what it can look like and it's just so much fun for me. I love building out goals with practices. I love seeing what it's going to take to get you to that goal and really working backwards. So dream big and then work backwards and make it smaller and smaller and smaller. So today, I wanted to chat about that and Dana pulled in to help me just really discuss how we go about increasing goals every year. And we do this with all of our clients. We look at what does an increase look like for next year? What is it going to create for you? So a lot of our clients will say, you know, I want to have more time at home with my family. We're having a baby this year. We want to take a maternity leave. I want to take a vacation to Europe for two weeks. I had a doctor that took her family to Paris this year. Like, how are we building that into the goals? And realistically, how are we making your business work for you so that you can have the personal life that you want? And so your team members can as well. But really what does the business have to do to afford you those pieces of life that are really, really valuable and important to you? One of those things that we look at is your profitability. And your profitability is key, you guys. That is the extra money on top, that's the kush, that's the, this is really what my business is able to create for me within that. So we do look at that when we build out your goals, but just on average, we wanted you to know what an increase, an annual increase looks like. her practice majority of the time a practice that's already been working off of their BAM. So their bare ACE minimum, right? Your, this is what it takes to pay my bills. This is what it takes to survive plus a percentage to get that profitability. So we typically look at, I Dana and I talked about this this morning, we're usually looking at what's your BAM. So what's your baseline? This is my baseline, just like at home, like this is what it takes to The Dental A Team (04:35.57) feed my family and to pay my bills. This is the baseline money that's going out and then 20 % on top of that. So baseline plus 20 % creates a profitable business. If we're only looking at baseline, you guys, I don't know, I felt Dana like in that conversation this morning that it was a confusing space maybe for people that... That's one of those spots I think where we talk dental. People are like, what are you talking about? All right. Our marketer this morning was like, what's a bloody profie? And I was like, that's funny. So it's one of those spaces that's like, what are you talking about? But Dana, I you do this with your clients to have really that baseline plus that 20%. So Dana, how do you go through that with your clients and really helping them to figure out one what their baseline is, and then what that 20 % is on top? Dana (05:00.716) No. Dana (05:25.09) Yeah. So really it is, it starts with their overhead. So what is their overall practice expenses? Okay. So that's going to be part of their bare ACE minimum. And then what are they taking home? Right. Also to any debt services, because we've got a pair of debt services to be to utilize them, whether it's a practice loan or equipment loan or whatever it is, as far as debt services, we've got to put that in your BAM. Cause at the end of the day, those things have to be paid or business will be shut down. The Dental A Team (05:34.546) Yeah. Dana (05:53.052) Failure to pay those things too So just making sure that you know all of those pieces that go into it and all of that is accounted for because oftentimes actors like well No, I don't put my pay in there. Well, right? You're not being able to live your life and you're not being able to afford like you have to be paid too That's why you are a practice owner. That's why you chose ownership, right? So we want to make sure that is included in there. So Let's just say we know you know, they're they're The Dental A Team (06:05.446) Yeah, yeah. The Dental A Team (06:15.538) Yeah. Dana (06:22.148) BAM is 100,000, because I like round numbers. So 100,000, we would obviously say then, okay, for that 20 % profitability, we need an extra 20,000 each month. So your goal then for that month becomes 120,000. And as long as we hit 120,000 each and every month, that will give you your BAM every month, plus your 20%. The Dental A Team (06:25.735) Yeah, same. The Dental A Team (06:37.339) Mm-hmm. The Dental A Team (06:43.302) Yep, I love that. I think the confusion or to separate statements is we've talked about when we talk about all the time your overhead and Dana, you just mentioned your overhead, right? So we do say your your true overhead. is if someone if someone were to purchase your practice from you today, what would they respond be responsible for taking on your pay your loans and come with you right you they they're not going to continue paying you. So what would a practice owner take from you if they were to purchase your practice is your true overhead. So in order to find your band, you find your true overhead, this is your outgoing money. And then you add in your loans, your debts and your pay. And if your associate pay or whatever else is not included in your true overhead for you, you add that in underneath. This is what you have to make in order to maintain your business as it is. So if you were looking at your personal finances, you would say, great, what are my credit card payments? What's my mortgage payment? What's my car payment? Those go into your baseline for what you need to make as an individual within your home. So you're to think the same thing. What does my practice need to make to baseline to say, We are at a zero zero, right? We are zero zero. We are not negative, but we are not positive. This is what my business has to make. And then we add, like Dana said, that 20 % on top of it. So that's the difference, you guys, when we talk overhead versus bam, is overhead is different. Your bam is going to be everything included. So I think that's where some of that confusion may come in. Now that 20 % can be bucketed out however you want it to be. So that 20 % could be bonuses. I do have a practice that's like, Tip, want, this is our BAM, but I want my practice to bonus every month. I'm like, great, then let's add a percentage after your BAM. The Dental A Team (08:34.276) a certain percentage of that will be their bonus. So they know if they get to this tier, this tier, this tier, but for that practice specifically, you guys and for most of my practices that talk about this, I want you to know I don't go bam plus 10 % and then they get you know, they get that bonus at that 10%. No, I still want bam plus some now it's above above and