For the last year, the COVID-19 pandemic altered daily life. With toilet paper shortages, mandatory lockdowns, and dental practice closures, the early pandemic was turbulent but not filled with doom and gloom. A recent American Dental Association (ADA) survey on the economic impact of COVID-19 and dental practices explains that nationwide production is returning to pre-pandemic levels. As a result, patients are returning to dentistry for elective procedures, and demand is high, increasing your cash flow. Additionally, some dental practices find they have excess cash flow when you factor in PPP monies received and the reduction in travel or educational expenses. Therefore, the experienced dental practice coaches at Bryant Consultants share on the blog today five post-pandemic cash flow tips to help you spend your money wisely.
Why did dental practices recover quickly?
Our dental office consultants explain that most dental practices schedule hygiene appointments at least two to six months in the future. Although some patients canceled their appointments over COVID-19 fears, filling the gaps with patients who missed their appointment during lockdown became easier. After patients became more comfortable navigating a COVID-19 world, dental practices experienced a wave of patients seeking cosmetic and elective procedures because of extra stimulus money. Additionally, people began working from home, which made scheduling dentist appointments easy at any time. Finally, the Paycheck Protection Program (PPP) stimulus money helped many practices prepare for reopening with better safety upgrades, such as additional personal protective equipment (PPE) or a better air filtration system.
How should dental practices maximize their cash flow increase?
Some practices are spending significant amounts on their dental office but still find themselves with a cash surplus. Instead of opting for more significant distribution, seize the opportunity to use tax-free dollars to strategically impact your practice so that it pays dividends for years. Our professional small business coaches share five strategies below to help dental practice owners use their money wisely during the surplus.
- Reinvest in upgrading your office with new equipment or furniture without needing to borrow money.
- Finish funding your practice’s profit-sharing plan for the previous year, or pre-fund the current year plan if not already complete.
- Pay down or pay off dental practice debt to reduce or eliminate interest expenses.
- Increase your marketing budget to launch a new campaign or execute a cutting-edge marketing plan.
- Resume continuous education opportunities that offer virtual programs.
As a dental practice owner, you may choose the more significant distribution. However, our expert dental practice consultants strongly encourage those dental practice owners to improve their financial status instead of squandering the excess money away. Paying debt, funding your IRA, or starting an investment account are wise ways to leverage extra cash flow for future gain. Also, if you choose to use the additional distribution for a personal purchase, ensure there are no recurring expenses connected with the purchase, such as a car, boat, or house payment.
Bryant Consultants
Although the dental industry felt the COVID-19 strain, it bounced back faster than other small businesses. With intelligent spending strategies and continued efforts to overcome adversity, your dental practice can weather the storm. If you would like to learn more or schedule a complimentary one-hour consultation, please contact Bryant Consultants by calling (877) 768-4799. We provide consultation, training, and coaching and will continue to post relevant updates regarding the coronavirus pandemic. To ensure that you receive the latest updates, please follow us on Facebook and Instagram.
