DISRUPTION has hit us hard. Its not the first time for many of us; Y2K, 9/11, 2008 just to name a few. And yes, this seems to be the WORST yet. Our lives and our businesses have been turned upside down.
“The best offense is a good defense.”
This quote, from boxing legend and heavyweight champion, Jack Dempsey is apropos because many of us have felt as if we’ve been punched in the gut.
Hopefully, it’s not a KNOCKOUT punch!
No one knows when the current disruptive event will end, what the true ramifications will be and when another disruptive event will occur. They do occur at fairly regular intervals.
IT’S NOT ‘IF’ BUT WHEN!
Is there a better DEFENSE than the one you had (or didn’t)?
We’re hearing positive stories of dental practices having record days. The New York Times, in an article entitled “How’s the Economy Doing? Watch the Dentists”
The author says that the entire economy’s trajectory can be predicted by the dental industry’s recovery. And that dental practice recovery is robust. Hence we should all have a sense of optimism.
While I applaud the NYT for issuing something other than their more recently common Doom and Gloom forecast, I believe that the article draws the wrong conclusion about the dental industry’s recovery.
Busy-ness does not equate with profitability. Production does not equate with profitability. Cash flow as well, does not equate with profitability.
“We can’t solve problems by using the same kind of thinking we used when we created them.”
Pre-Covid-19, many dentists knew some basic KPIs such as monthly new-patient flow, daily and monthly production and gross collections. While these are important numbers to know, they do not predict sustainability or success.
PROFITABILTY should be your focus in this new reality.
Even if the New York Times can’t understand the importance of PROFIT in evaluating recovery, YOU must.
What Questions Should You Be Asking?
Revenue is the money a company earns from the sale of its products and services.
Cash Flow is the net amount of cash being transferred into and out of a company.
Profit is the result of your revenue minus your expenses.
When discussing losing money, something many of us have recently experienced, Warren Buffett said; “you don’t have to make it back the same way you lost it.”
Taking Buffett’s admonition and extrapolating it to our current situation, it seems logical that if you recreate the practice you had before Covid-19, even if you were successful then, if you don’t change your business model post-covid, you will be in worse shape when the next disruptive event occurs.
The pre-Covid economy was humming along. Dental Practices were too. A practice could have inadequate, or even “good” systems and get “good”, or even GREATresults. That happens in a GREAT economy. That formula no longer works.
Now, in order get GOOD results, your systems have to be GREAT. Want GREAT results? You’ll probably have to reinvent your business model.
If you’re focusing on the same revenue sources and delivery systems you had pre-disruption, your profitability will certainly change.
NOT FOR THE BETTER!
Want to discuss how this is relevant to YOUR practice?
Schedule a FREE consultation at:
You have nothing to lose. Schedule YOUR CONSULTATION now. My schedule is changing, and the availability of consultations will significantly be reduced starting June 22.
To everyone’s excellent health, safety and success,
Michael, Laurie and the PPS team
P.S. When you schedule a FREE Consultation within the next 2 weeks, you’ll also receive a BONUS GIFT, my newly published SPECIAL REPORT ($97 value):
“The SECRET to what’s REALLY holding you back!”