It’s a new year, and if you’re like many practice owners, you’re eager to make this year better than the last. You’ve set your goals and your staff is on board. Like any New Year’s resolution, many will not be fulfilled. Why is this?
Let’s take an example of a budget. When a business owner makes their first budget, they create a best-case scenario budget. To compare this with running, training for a marathon does not mean running a marathon the first week. Too much change leaves you and your staff feeling defeated, until the goal starts to feel like an enemy.
To keep team enthusiasm high, break the goal into phases. This will allow you to stay in the zone of exciting progress instead of making an exhaustive sprint that stops short of the finish line.
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Do a reality check
Let’s put this into practice with the budget example. If you’ve never had a budget, start with reality. Take your previous year’s expenses and enter those into your budget. The first phase of a goal should be to get everyone excited about the goal, and that means setting up everyone for some easy wins. Once you have your past expenses entered, evaluate two things: growth and opportunity.
If your practice is growing, include this projected growth in your budget. If you sustainably grew 15% in 2021, increase your expenses by 15% across the board. Then evaluate your opportunity. Again, the objective in the first phase is to get everyone excited about the goal by providing some easy victories. If you have not been tracking your expense percentages or budgeting, a 7% decrease on variable expenses will likely be comfortable. Once your team is in the habit of checking the goal, increase the reach and take one step closer to the year-end goal. (In the case of budget, that may mean decreasing variable expenses by 10%.)
Not only should one goal be broken down into smaller steps, but separate goals should be taken one at a time. It’s tempting to see all opportunities for improvement and try to execute them all at once. If your practice uses a dashboard, know you are even more susceptible to this temptation. Turn off all but a maximum of four metrics, which should all relate to one goal.
If everyone sees all the metrics at the beginning, then no one is focused on any one metric. Morale will fall, people will stop checking the dashboard, and no goals will be achieved. Again, the main objectives are easy victories and changing habits. If you know that your practice needs to reduce expenses and increase patient retention, choose the most important one and start with that.
If you’re not sure where to start, then start with industry standards. What percentage are you paying toward lab and supply fees? What is your patient rebook rate? What are the dollars in accounts receivable the past 30 days? No matter the opportunity, it will be achieved more easily if everyone is pulling toward that goal. It’s a new year and a great time to implement improvement, but as there are 12 months to make the change, and the lifetime of your career to sustain the change, run these goals like a marathon.
Editor's note: This article appeared in the January 2022 print edition of Dental Economics.
