- Associating Student debt as Business Debt
Every dentist coming out of medical school has a mountain of personal financial debt from student loans. Besides starting a practice, paying off their student debt is the number one thing on a dentist’s mind, but one thing medical school does not teach you about dentistry is that you need to spend money to make money in a business. When first starting a practice, many dentists will shy away from taking a business loan because they associate their personal debt with their business debt. What they don’t understand is if they take out the business loan, they will have the necessary capital to improve their business, allowing them to pay off both loans faster. When first starting a practice, if the dentist puts the business first, the personal debt will take care of itself.
- Focus too much on interest rates and not enough on monthly payments
When a dentist does decide to take out a business loan, a common mistake made it they focus too much on the interest rate of the loan and not enough on monthly payments. The key to running a business is understanding your company’s cash flow. Many dentists focus too much on the loan’s overall interest rate, instead of focusing on getting a longer term loan and lowering monthly payments. Long term loans with lower monthly payments are better for businesses because they lower taxes, allow for more working capital, and can allow them to create savings for the company.
- Doing their own Accounting
One of the biggest mistakes a dentist can make is trying to do their own accounting. Most dentists do not know the basics of accounting, let alone taxes and hidden fees. The best thing a dentist can do for their company is hire a qualified accountant to handle their finances. As a dentist, you should be focusing on your clients, and not worrying about what goes on the books. Hire someone who went to school for accounting to handle your books because it will keep your finances in order and make your life easier.
- No budget or room for Error
Another common mistake made by many dentists is the lack of space in the budget to account for an unexpected event. Everyone knows how necessary and expensive a dentist’s equipment is, but what they do not understand is what happens when it malfunctions or decommissions. If a dentist does not leave room in their budget to account for unexpected events like a machine becoming decommissioned, they can put themselves in a big hole. They can either seek another loan, which could take months to be funded, or they lose customers and can eventually shut down. Every dentist needs to leave an appropriate amount of room in their budget to account for unexpected events.
- Hiring Family Instead of the Right Employees
Many small business owners make the mistake of hiring family members as employees, instead of a more qualified applicant. Hiring unqualified family members can put unneeded stress on the business and you as a business owner. Inexperienced family members can hurt the business by not being able to properly help patients, hurting your reputation as a business. They can also put stress on you as a business owner by having to make the tough decision of business over family when firing them. The best thing a business owner can do is just keep their business separate from their family.
- Not Hiring a Marketing Professional
A key to any business is having an effective marketing strategy. To have an effective marketing strategy, a business owner needs to hire a marketing professional. By hiring a marketing professional, they can expand your business’s customer reach, and improve your business’s customer appeal. Let the marketing professional do their job by going out and getting new clients, and you focus on what your best at which is fixing their teeth.
- Having an outdated website
In today’s world, consumers find most of their products and services on the internet. Having an outdated website or lack of internet marketing can negatively affect your company’s image to consumers and turn business away. Having an up-to-date website and internet marketing on social media and service engine websites can help improve your customer reach, and your company’s brand to consumers.
- Failure to Keep Up with Technology
Just like any business, a dentist needs to have the most high-tech technology in order to stay competitive in this industry. Having the newest technology can help a business better tend to its customer’s needs, operate more efficiently, and make operating easier for employees. Not having the newest technology can cause your customers to seek services elsewhere if they do not feel like your technology is helping them reach their goals.
- Underestimating the Power of Communication
Many dentists and small business owners either forget or do not understand the effect that effective communication between employees can have on a company. Having a daily ten minute meeting to discuss feedback and delegate duties for the day can have a tremendous effect on your business’s operations. The dentist should set a meeting every day to set goals for the day, to review the prior day, and discuss any issues employees have. Having these meetings can increase employee satisfaction by making them feel like they have a much bigger effect on the company, and cause them to work harder because of it.
- Failure to Acknowledge the Business Manager Role
The biggest mistake and most common mistake that a dentist can make as a business owner is failing to acknowledge their role as a business manager and owner of the company. Many dentists make the mistake of making themselves into regular employees instead of a manager of the company. They fail to perform duties such as setting goals, leading the team, making tough decisions to help the business, and managing all sections of their business. The number one reasons dental practices fail is because they lack business management from their dentist. By failing to perform the tasks of a manager, the goals and direction of the company can be altered and can eventually result in the failure of the business.