While many people may not think of money management as an integral part of a dentist’s job, for those who are in private practice, they are all too aware of its importance. It is estimated that around 80% of dentists end up working in private practice eventually, meaning budgeting know-how is a vital part of keeping your business afloat—and as the end of the year approaches, now is the time to be thinking ahead about where your money will be going next year.
What Can a Budget Do for My Dentistry Practice?
To ensure the money coming in is matching or exceeding your money going out, a budget is a helpful tool for any dentistry practice. By determining the annual totals of your revenue and expenditures, you can make a plan to better forecast your business spending and ensure that you are still able to make a profit at the end of the year. This can help you make sure your dental practice is on the right track to hit both your short and long-term goals and point out areas where you may be able to curb your spending to increase overall profits
What Should Be Included in My Dentistry Office’s Budget?
Often one of the largest expenses that any dentistry office faces, payroll should typically be the first line item in your budget. This not only includes salaries of your staff, but also accounts for training costs, workplace insurance, employee incentives, and benefits.
Whether you rent or own the building your practice is in, it is important to include the expenses and upkeep within your budget. Your monthly building payments are a part of it, as are your utility and maintenance costs, insurance, taxes, and any necessary repairs.
Itemized Supply Costs
The cost of equipment and specialized supplies can be significant in the dental field, so carefully considering your spending in this category is key. Budgeting with an itemized supply list can be a great way to see where your money is going and help alert you to anywhere you may be able to save on supplies.
Sending off for lab work is a necessary part of operating a practice, but it can also be a costly element of operations. Researching different labs is a good way to find potential savings so you can bring down the annual costs of these expenses.
It’s crucial to invest in marketing for your practice to ensure you are able to bring new customers in, and the best way to ensure you allocate sufficient funds to this is by including it in your annual budget. For many dentists, marketing and advertising is seen as an afterthought which is not conducive to creating sustainable growth.
Not every expense can fit into its own category, but it is still important to take every cost into account—which is where a miscellaneous or discretionary category can come in handy. This category can also be where any excess money goes, so you can then allocate it for sudden repairs or expenses that might pop up during the year.
If you need help crafting a budget for your dentistry or medical practice, we are here to help. Contact Huskey Financial today to learn more about our services.
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Links to external sites are provided for your convenience in locating related information and services. Guardian, its subsidiaries, agents and employees expressly disclaim any responsibility for and do not maintain, control, recommend, or endorse third-party sites, organizations, products, or services and make no representation as to the completeness, suitability, or quality thereof.
Michael Huskey is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 4201 Congress St., Ste. 295, Charlotte, NC 28209; 704.552.8507. Securities products offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Huskey Financial Group LLC is not an affiliate or subsidiary of PAS or Guardian.