A False Sense of Security

Does having a defense system designed to repel aggression mean one should invite attack or rest on one’s laurels awaiting one?

I’m not referring to the Iran-Israel conflict.  I’m referring to a dental practice that’s cruising along; has enough new patients, a stable team and a healthy cash flow.  Such a practice might have been immune to attacks from the economic slowdown, pandemic shutdown or the “great resignation”.  But, all businesses are constantly vulnerable, which is why they have to continue to monitor and upgrade their defensive capabilities.

How can a business create its own Iron Dome?

Every practice should have these 4 systems on autopilot.

MARKETING

Roller coaster marketing is when someone notices a slowdown of new patient flow.  All of the sudden marketing becomes a priority.  The trouble is, by that time it’s too late.  It takes time for an effective marketing campaign to be designed and deployed.  Some marketing can take months or even years to begin to generate results.

An example of this is reputation and search marketing.  Sure, you can spend thousands of dollars a month on Google ads, but the real holy grail is getting to the number ONE spot organically.  And that takes time. Often years.

HIRING

Hiring is the same.  One never knows when an employee’s spouse is going to be transferred or someone gets sick or becomes disabled.  S$%T happens.  That’s why every practice should have a “JOIN OUR TEAM” tab on their website. Testimonials from existing team members stating why they enjoy coming to work can impress potential employees.

Every practice should also have updated job descriptions, which can be readily turned into a job posting sites such as Indeed, ZipRecruiter or others.

Keeping a file of acceptable resumes can help deal with an immediate open position.

CASH FLOW

Cash flow can be erratic.  Doctors can take vacation or get sick.  Insurance payers can be fickle.  Practices dependent on government programs such as Medicare, Medicaid or the VA might be cut off by a government shutdown or policy review.  Electronic submission can be interrupted.  Unexpected expenses can arise.

That’s why it’s so important to develop a strategy that on one hand, determines how much of a cushion is necessary (we recommend at least 3 months of fixed costs; rent utilities, payroll).  And, on the other hand, a practice should develop an automatic system that takes profit and puts it into an interest bearing, liquid account such as a money market, taking advantage of the benefits of compounding interest.

One other strategy a practice can use is having a program that automatically generates enough revenue that will, at minimum pay fixed expenses.  A membership program can serve this purpose.  Properly crafted and effectively promoted, such a program can provide continuous, recurring revenue, independent of clinical activity.

Having the program isn’t enough.  The goal should be to minimally have sufficient membership revenue to cover 3-months fixed costs.

Business overhead/disruption insurance might be viewed as a significant or excessive expense.  If you can’t ensure a steady cash flow by another means, then it’s not a luxury but a necessity. Should you have a 3-month financial cushion, an insurance plan that kicks in after then is appropriate.  Should you be fortunate to have a 6-month cushion, the insurance planthat takes effect after 180 days will cost significantly less.

MONITORING

There are KPI’s that look at what’s happened.  These are historical measurements.  They do not predict what’s going to happen in the future.  A practice’s revenue and overhead are historic KPI’s.  They tell you how things are and were, not how they will be.

That’s where predictive KPI’s come in.  These forward looking KPI’s can help predict revenues and spot troublesome trends.  Some of these key predictive KPI’s include:

By regularly monitoring predictive KPI’s, a practice can look forward and make requisite course corrections to improve outcomes.

Patriot Missiles, Arrow 3 System, David’s Sling can shoot down drones, rockets and ballistic missiles but they are not infallible.  The lives of people can be impacted by a failure to deploy effective safeguards for company survival.

Need help with your defense systems?

Towards preventive safety and comfort,

Michael

P.S.  As far as the Iran, Hamas, Islamic Jihad, Hezbollah, Isis, Houthis and their conflict with Israel is concerned; how would you react if you are constantly being bombarded with terrorist threats from all directions?  The miracle of Israel is that anyone living there is still sane.  We in the USA might be able to enjoy a false sense of security.  They cannot.