Want to know if you can afford to reduce your working hours?
Need to fund the purchase of new equipment?
Want to bring specialist treatments in-house?
Looking to set up additional surgeries in your practice?
When you have strategic goals for your dental business, a lot of big hairy questions arise…
• Do you need funding or can you generate the additional profit required through working differently?
• If required, what type of funding is best in your particular situation?
• Can your business sustain the level of funding you need?
• When should you proceed?
It’s natural to feel anxious about these types of issues. They are significant points and it’s easy to take on overly expensive funding or cause unnecessary cashflow issues by operating beyond your means.
But what is crucially important is that you don’t let these concerns stop you from moving forward. That you find the clarity and confidence you need to go ahead with your goals.
Here’s the key…
Whatever your goals for your dental business, the key to gaining the confidence to pursue them is putting together a strategic financial forecast.
A strategic forecast looks at your goals and lays out the financial resources you will need to achieve them. The overheads you will incur. The outgoings you will have. So if you want the confidence and clarity to crack on with your vision for your dental business, a forecast is absolutely fundamental.
Working with a dental business recently, we explored five different financial scenarios, from the expansion of services to refurbishment of equipment. By the end of the exercise the business owner knew that if he changed the way he works he didn’t need any funding as the increased profit would pay for his expansion plans.
And it doesn’t stop there. His optimal forecast has now been converted into financial targets. So he will be able to compare his actual achievements against his target figures as he goes along and be certain about how closely he is keeping to his financial objectives. The early warning system is in place to allow him to respond appropriately should circumstances change.
It’s a process he described as: ‘refreshing and empowering.’
Here are the steps we took him through:
• A calculation of the margins made by the business on its services, products and treatments
• A calculation of the key overheads involved and the return on investment on each big overhead spend
• What increased profit margin would be achieve through the new equipment
• What efficiencies would follow through changing the structure of his business
Shouldn’t you take the same steps to make your goals a reality?
Please do leave any comments or questions you have on strategic forecasts in the box below. I’ll be glad to respond and give you further advice.
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