Time is Money
With time a valuable commodity in today’s busy world, how you chose to spend your time is worthy of a moment of indulgent consideration.
Assuming that you are one of the lucky ones who have the work/life balance sussed, let’s focus on the professional you. ‘Time is money’ (Benjamin Franklin) and, regardless of your particular personal stance in relation to ‘money-making’, the mechanics of dental business are relatively straight forward – time spent in surgery delivering treatments earns money; time spent out of surgery on the management of your business effectively looks after those earnings and years of investment.
What is your time worth?
With goodwill values at a record high, maximising your business profits (while maintaining your sanity) is more important than ever, particularly if you are considering your future retirement. So, what is your time worth? To put this in its simplest form, how much do you earn in a day in surgery?
As a rule of thumb, an average surgery in a mixed practice should be generating a minimum of £250- 300k each year at reasonable capacity. Over a 46-week working year and a four and a half day week at the upper level, this equates to approximately £1,450 per day.
Therefore, if you are spending just one day per week on non-clinical/administrative matters (CQC policies, paying bills, marketing, book-keeping, staff payroll, ordering supplies, etc) and your surgery is lying empty for that time, the consequential lost revenue whilst you are carrying out those tasks is therefore £66,700 each year.
And do you enjoy your admin day? If the answer is ‘yes’ and you wish to continue, then do so having made a fully informed decision. If not…
There is an entrepreneurial concept that states ‘don’t pay someone £25 per hour to do £10 per hour work’. Whatever your numbers are above (substitute your own calculations), this is sensible advice for each and every activity carried out within your business. Allocate responsibility to the relevant person to do the job correctly in the most efficient manner (in respect of both time and cost). Is your time most efficiently spent doing this admin work, or could it be put to better use?
Many practice owners appoint a practice manager (PM) at the stage where they feel the administration is getting too much – or too costly – for them to do themselves. But before you commit to ‘promoting from within’ or adding a new cost to your payroll, consider whether you really need a formal PM. Could you delegate some (or all) of those time consuming tasks – maybe to someone in your existing staff team or even a family member?
When analysing the staffing requirements in dental businesses, generally a practice with three or more surgeries will almost certainly require a manager at the helm to swiftly and effectively deal with all situations – large and small – to enable you to focus on valuable surgery time. That said, an ineffective PM can cause you more problems than they solve!
‘He/she’s a great nurse’ is never a good reason for one of your staff to become your PM. The skills required to be a great nurse are very different indeed from those required to effectively manage an often diverse team of personalities, patient welfare, clinical governance and legislation changes (dare I mention CQC?), payroll and national insurance contributions, financial targets of the business, and so forth.
There are many PMs working in practices where either the owner struggles to delegate (and therefore the PM has very little actual responsibility), or in real terms are not capable of delivering the modern requirements of the role.
As well as this being detrimental personally to their individual development, it is also detrimental to the business with the burden of an over-inflated salary affecting profitability and practice value. If you are paying an enhanced PM salary, then make sure that you will get the benefit of a real PM contribution to your business!
The truth is, that for a practice manager to be a worthy asset, they must be ‘on the same page’ as you and your management objectives, be your ‘eyes and ears’ and running the business as if it was their money they were spending (think ‘stock control’ as a typical area for improvement!).
Targets should be set and regularly reviewed to achieve minimal gaps in the book and fail-to-attends, an increase in new patient conversions, together with incremental revenue and business growth. If you are not monitoring and achieving these key areas, your business will be going backwards in real terms. Modern practice management is very much a skilled ‘business manager’ role – make sure that your business is run for success!
Posted by: Anne Barker on 11 Jan 2016