No matter how passionate we are about making teeth, the passion will burn out if the economy does not support our personal freedom. None of us are able to live a happy life where the majority of our focus is in a dental office.
We need a balance between:
Our passion
Our work
Love of life
The feeling of a meaningful life
A lot of my blog posts have been about personal finances and practice finances.
Not because I am some private financial oracle, but because our private finances over time have a huge impact on our ability to run a practice with joy and enthusiasm. Since the dental practice generates our private income, there is a very close connection between the practice's and our private finances. In this blog post I write about how it affects us and what we can do about it.
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Free or trapped by the economy?
Even practice owners with annual financial profits of several million euros often feel financially poor. This is actually relatively normal. This happens because most humans have a tendency to let their spending follow their income - unless we actively do something to prevent it (The different accounts I've written about in the previous blog posts can help with this). So even if we earn a lot of money, we may not have a lot of disposable funds.
In the late nineties, the book The millionaire next door was published. In the book, the authors describe how they conducted several studies to find out what characterized American millionaires. Their results were surprising, to say the least, and quite different from what they expected.
The vast majority of dollar millionaires lived a relatively frugal life. Whereas the majority of Americans who lived in the most expensive houses, drove the biggest cars, wore designer clothes and bought expensive watches were so deeply in debt that they would not be able to survive financially for more than a year if they lost their income from their jobs and had to realize all their assets!
The researchers' conclusions, combined with what we know about behavioral psychology today, lead me to believe that Danish conditions can be related relatively well to the content of the book.
If you didn't get to read the 2 posts on personal finance, where I describe how you can get control of your finances and build a sensible buffer, I would recommend you to read them now.
Create balance
It is about avoiding the experience of inadequate personal finances. Avoid the feeling of being caught in a hamster wheel and thus avoid the feeling of being emotionally drained.
It can be difficult, as a dentist, to create the necessary balance, as it requires a strong foundation, which we have never learned anything about in dental school.
The foundation consists of the following elements:
A private vision that forms the basis for your goals.
The written vision of the practice, which all team members know, can reflect on and which is continuously and actively used in the day-to-day management of the practice.
The raison d'être of the practice
In addition to a strong foundation, the dental practice needs to be run as a business and not as a philanthropic project. That is, we need to recognize that a dental practice is a private business that needs to make money. If a business does not make money, at some point it will cease to exist.
In other words, the old phrase still holds true: The dental clinic can either be developed or liquidated.
Please note that I am not saying that the practice should not be run on ethical and moral principles. They are actually part of the core of any well run dental practice, which you relate to in the vision of the practice. No private dental clinic will be able to survive in the long term if it is run dishonestly. Both in terms of professionalism and financial operations. The same applies to any kind of private business. History is full of examples that confirm this fact.
I have already written a lot about the practice vision and foundation for success here on the blog, as well as in these posts, there are various tools and templates that you can download and use for free if you want to work with them.
The 3 stages of growth of a dental practice
Once the practice owner has a handle on the foundations of a healthy practice, you can start to look at the 3 growth phases of the dental practice. Below is my description of the growth phases:
Phase I: Close the gaps! - Run the clinic like a business
Phase II: Optimizing the business - less stress & more profit
Phase III: Growing the business - vision as a driver
I have experienced many practice owners and employed colleagues who have reached a point where they express that they do not feel they are getting enough out of their efforts. Most of all, they want to avoid hassle and just focus on making teeth.
Less hassle - more professionalism and freedom
It is easily possible to run a dental practice with minimal hassle and at the same time create a fantastic team that runs the practice as if it was their own. A business that provides a financial profit and the opportunity for more freedom and to make the practice even more attractive. All it takes is to start working in a structured way to optimize the practice.
It requires time for reflection to create its foundation. Just as it is recommendable to get help along the way. This is one of the reasons why we created the travel course: "Eremito 2023".
It's not easy to optimize the practice on your own.
If you have a desire to optimize your practice so that you can work less, earn more and have more time off - like really time off - you will find many useful elements here on the blog. If you do it all yourself, you should expect it to take a bit longer than if you get help with the process.
Next week it will be about getting the practice ready for sale. Even though it may be 30 years ahead in your plans, it is important to realize how the practice should constantly mature for a possible sale. Why this it is important - you can look forward to reading about it in one of the future posts.
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Thank you for reading this blog post. I hope to see you in the next one.
Many kind regards
Dentist & Consultant
Jesper Hatt DDS
Phone: +41 78 268 0078