One week prior to the April 15th deadline for filing tax returns, a client of mine called me with real panic in his voice. He had been informed by his accountant that he was going to owe eighty thousand dollars more in taxes than he had withheld! This doctor’s dental practice had experienced tremendous growth in 2012–by far his best year ever by a large differential–and his salary draw had increased substantially. My question to him was “How could this happen? You and I review income and expense reports every quarter that are prepared by your accountant.” Someone was obviously asleep at the switch!
This unfortunate incident serves to illustrate the need for continuous reassessment and reevaluation of your business plan. Every October, I meet with my clients and we identify strategies for growth in the upcoming year. We make projections and set realistic goals that are based on a combination of historical performance and future potential. Once we identify the growth areas, we assign an actual dollar amount to each one.
But making this grand plan is just the first step, and it is not acceptable to think that your job is done just because you created a blueprint. During the year, we run detailed reports to see how each growth area is performing. Is the revenue projection on target? We recalibrate and tweak and re-examine. What is working, and what isn’t? And if it isn’t working, what can we do fix it? It is more than okay to make a mid course correction. It is often imperative.
And when a piece of the master plan doesn’t pan out as projected, difficult decisions might have to be made. Perhaps a staff member didn’t grow in her job performance as you had hoped and needs to be dismissed. Perhaps a marketing project that was supposed to bring in more new patients is not working and you need to cut your losses. I have observed that doctors in general have a great deal of trouble taking the emotion out of these decisions even when it is clearly in the best interests of the practice.
As everyone says, doing the dentistry is the easy part. The management is where all the headaches are. So do not think that you have failed because you needed to reassess. On the contrary, you have failed big time if you wait until the end of the year to see the results of your planning. Reassessment equates to success!