Richard Scarborough and Michael Copeland share ways to improve your financial reliability in 2021.
Last year will certainly have given practice owners plenty to think about when it comes to finding ways to strengthen their business in 2021.
The vulnerability felt by many during lockdown will undoubtedly lead to a decision to prioritise increasing their practice’s financial reliability. Below are some ways you can do just that and strengthen your business for whatever this year brings.
Introduce patient finance
Offering patient finance can help to improve your cash flow and reduce your risk, as you receive the money from the finance provider up front before the treatment starts and the patient repays the bank over time.
This is a boost during the best of times but is even more welcome following a hardship. For example, many practices who use Medenta patient finance have found that as they have begun the road to business recovery, there is a wealth of patients keen to have orthodontic treatment funded via patient finance. Having finance in place meant they were able to kick-start their cash flow as soon as the doors reopened and increased the likelihood of patients being able to say yes to the treatment.
Put a membership plan in place
A membership plan brings in a steady, guaranteed income to your practice. This allows you to plan ahead more easily and feel assured that you know what to expect every month.
This regular baseline of income has also been shown to remain strong during times of crisis as well as when everything is running smoothly. During the first lockdown in March 2020 when dental practices faced a huge amount of uncertainty, 98 per cent of patients on a plan with Practice Plan continued paying their membership fees even when they couldn’t see their dentist.
Get on top of your financial position
Your practice’s financial health will be underpinned by having a strong understanding of your financial position. Knowing how much you have, or are likely to have, where you have room to make investments and being able to anticipate any pressure points will boost your overall resilience and help you to plan ahead with greater confidence.
Start undertaking thorough, granular cash-flow forecasts and ensure they’re regularly refreshed – ideally on a weekly basis.
Review protection
The events of last year will have underlined the importance of protection cover, particularly to mitigate the potential financial impact of any sort of illness or injury.
Take the opportunity to review what cover you have in place, and whether this is the right level for your practice’s needs.
This could include solutions such as a professional expenses plan, which can provide a monthly income to your practice if an employee became unable to work due to certain circumstances.
Money from a professional expenses plan could be used to help meet your practice’s overheads, or to cover the cost of hiring someone else to carry out their role – ensuring you can continue to deliver the high standards of service you offer your patients and to complete treatments.
Whatever your protection requirements, it is critical that individuals understand exactly what their policies cover if they need to claim. Your financial consultant will be able to help you with this process.
Summary
The above are some ways you can help to stabilise your finances, which will not only give you better peace of mind but also a stronger foundation for your practice. With the challenges the dental profession faced in 2020 alongside the new challenges that have arisen during the winter months, putting measures in place to help you navigate uncertain times can only be a good thing.