“These are unprecedented times.”
It’s the phrase we’ve heard repeatedly over the last few weeks as we’ve watched the United States and the world fully confront the COVID-19 pandemic.
While this certainly rings true for all of us given the significant impacts we are facing across the board, it particularly hits home for those of us in the healthcare industry. Deemed elective and non-essential during this time, dentists currently face a make-or-break moment for their practices.
With the industry slowed to a halt, dentists are without the reoccurring revenue required to remain financially stable, leaving many to question whether they can keep their businesses afloat. Changes are needed, but where should business owners start?
There are several strategies and best practices to consider implementing today.
Apply for the EIDL Loan and the PPP
If you haven’t already done so, the first step is to immediately apply for the Economic Injury Disaster Loan (EIDL) or a disaster relief loan, as well as the Paycheck Protection Program (PPP), to gain access to funds to keep the business running.
The EIDL emergency advance provides practices a $10,000 grant that helps with immediate expenses and does not have to be repaid. The money can be used to handle increased costs caused by the interrupted supply chain, cover rent or mortgage payments, and pay out financial obligations that cannot be met due to revenue lost.
While the EIDL loan can be used for payroll, it is better to use these funds for other business expenses. Instead, use the loan received from the PPP for employees as these funds are meant to assist with payroll, healthcare benefits, insurance premiums, mortgage obligations, rent, utilities, and any debt incurred before February 15, 2020.
If a practice’s EIDL loan is currently being used for payroll, refinance it for different operating expenses in order to qualify to receive the PPP loan. This will allow the practice to maximize the benefits provided by the government, while still operating effectively and responsibly.
Explore All Opportunities to Expand Your Cashflow and Credit Line
Dentists should explore all short-term options that cut costs, gain immediate cashflow, and expand credit in various ways. It is critical to institute an immediate spending freeze on anything that is not essential to keep the business running and to free up as much credit and cash as possible. If need be, try applying for another business line of credit with your bank or using credit cards to pay essential expenses.
Now is the time to sharpen one’s negotiation skills. Dentists should attempt to negotiate with utility companies, building management, and outside vendors on payout options or to seek delays on paying certain bills or invoices. Remember, it doesn’t hurt to ask!
Strengthen Your Business Acumen
This forced downtime provides an opportunity for dentists to expand their knowledge and seek resources for continuing education. For example, dentists who defer financial acumen to their accountants should get to know the financial side of the business, such as the cash-to-budget process and the profit and loss statements. Consider taking advantage of online classes, webinars, and tools to learn and increase your business intelligence.
Practice owners should also consider exploring predictive analytics, such as those in QuickBooks, that allow them to review and understand production reports, profitability and trends, or deficiencies within the business. With these insights, practices can refine procedures and operations to create a more efficient business environment and eliminate wasted resources and costs.
Think Strategically and Long-Term
It’s hard not to panic and jump to rash decisions as each day passes and social distancing orders draw out further. However, now is the time for tools and procedures to be implemented within practices that can help owners work smarter, not harder, in the long run.
For instance, do not completely halt your marketing efforts, as building a pipeline back up can be difficult if all efforts are stopped during this pandemic. Dentists can utilize social media and e-blasts to continue weekly communications with patients and prospects to stay top-of-mind and ensure they won’t turn to other providers when the time comes to schedule their next appointment. Commentary can fall outside the field of dentistry as well, such as sharing feel-good stories or helpful tips.
Additionally, consider reaching out to patients to begin scheduling appointments and regular checkups that were missed due to COVID-19 for the coming summer months. This allows the pipeline and corresponding revenue to be in place for when practices can resume business. The key is to plan today for a better tomorrow and look at the business with a long-term lens.
Evaluate Technology That Streamlines the Business
Dental practices should also adopt automation tools to streamline the business, such as those that alleviate the time-intensive and cumbersome process of accounts receivable. With most staff members being limited right now, using accounts receivable software like Abella could be the solution.
Abella sends automated text and email reminders to patients to pay outstanding invoices and allows a practice to collect “uncollectible” patient payments. This is particularly relevant with those owners currently without the support staff who typically handle follow-up calls or mailing paper statements. Implement technology that enables the business to generate revenue and reduce overhead costs.
While it may feel like it now, COVID-19 does not have to break a dental practice. This stall is temporary, and now is the time for owners to get creative and utilize all available resources to cut costs, increase immediate cashflow, and ultimately set the business up for success. By looking at this period objectively and making strategic business decisions now, dental practices will not only survive but ultimately thrive in the future.
Dr. Baird is a cosmetic and family dentist based in the Dallas-Fort Worth metroplex. He also is the founder of the Productive Dentist Academy, a consulting and marketing company that equips dentists with strategies to improve treatment planning, and the founder and chairman of the board for Comprehensive Finance Inc, a financial services company that offers payment solutions for dentists and other healthcare providers. With nearly 35 years of experience leading a successful dental practice, Granbury Dental Center, Dr. Baird is an expert voice in dentistry and private practice ownership.
Mr. Brown is CEO and president of Comprehensive Finance Inc (CFI), which has pioneered a human-centered, technology-driven approach to solving one of the most difficult aspects of healthcare services by helping healthcare organizations tackle the cost and complexity of billing and collections issues in a way that empowers both patients and practitioners. He is a commercially minded healthcare innovator with more than 25 years of experience, and his leadership is forged on a common belief that simplifying the payment process helps all patients get access to the high-quality care they deserve.