There always will be ups and downs, feasts and famines, in business. You could hit a personal boom or a nationwide economic crash. Either way, you need to prepare for these possibilities and ensure your business has the correct cashflow strategies to survive and thrive at all times.
What Is Cashflow?
Cashflow is the timing of money or revenue. Not profit. Cashflow is the money moving in and out of a business.
You need to remember to dedicate a lot of time to creating your own cashflow strategy during good times and bad times. Focus on creating a strategy that allows you to control the timing of revenue so it is received before payroll dates and due dates for other expenses like office rent.
Now let’s talk about revenue strategies that will help you make more profit while helping to increase cashflow for your practice.
Dental membership plans are one of my favorite strategies to implement in a practice. This strategy allows you to offer a membership/subscription plan to your patients, where they pay a monthly or yearly subscription and receive benefits and savings on restorative services.
This strategy is excellent because it helps you attract the growing population of uninsured patients, gives your business a recurring revenue stream, and helps you increase case acceptance!
Another great thing about membership plans is that they can be a tool to help reduce your dependence on preferred provider organizations (PPOs) and allow you to have more freedom financially and clinically.
I recommend you get this free book about membership programs so you can start growing recurring revenue.
This is another strategy that you should focus on because financing through a company like Care Credit or a similar service can allow you to have lump sums of cash deposited in your bank account, and you won’t have to worry about collecting the revenue from large cases. It also helps patients say yes to treatment and makes it easy for them to buy your services.
In-House Payment Plans
Payment plans are great, but you have to be extremely organized and know your own state’s regulations. Basically, you work the payment terms out with the patient.
Let’s say someone needs two implant crowns but can’t afford to pay cash up front. You can negotiate a deal where you auto-charge their bank account or credit card every month until the balance is paid in full.
This can be a great strategy to get revenue in the door and to take care of your patients, but designing something like this needs to be done the right way and should be planned out.
Understanding What PPOs Do to Your Practice
There are two reasons why I think PPOs are really bad for your practice and your patients. First, PPOs control or minimize your profit margins. Second, PPOs complicate cashflow and make it challenging to get revenue in a timely manner.
Profit and revenue are the most important foundations of any business, and you are being attacked. PPO companies don’t care about your profit margins or your patients. How does this help you or your patients? It is a bad deal, and we as an industry should recognize this and correct it.
Ensuring that you have a proper cashflow strategy will allow you to weather economic storms. Having recurring revenue in your business will really enhance your cashflow and decrease your stress levels, along with using tools like Care Credit and building an in-house financing strategy. The more cashflow options you have, the better.
My last tip is to always focus on marketing and lead generation for your practice. You will always have patient attrition, and you will need to invest revenue back into marketing to continue getting new patients and new opportunities.
Use these business strategies to create great cashflow, invest in marketing, and make sure your patients have a great experience with you and your team!
Mr. Comstock is the founder of BoomCloud Apps, a successful software company that allows dental offices to quickly create, organize, track, and automate their in-house membership program. Contact Jordon and his team at (385) 225-9364 or email@example.com.
How to Improve Your Dental Practice’s Cashflow Management
The Value of a Membership Patient
Eight Reasons Why You Need a Dental Savings Plan