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Budgeting - Is it worth your time?

If you went by all of the business articles out there, business gurus and coaches, posts on social media etc. then we all want to grow our businesses. We all want bigger and better businesses… I guess you want to be running at least three dental practices. Have a mini empire.

The reality is however, that some of us are okay. Yes some new patients would be nice; maybe even some more private work or a new income stream but nothing that is going to rock the Dental industry.

So when do we tend to budget? Generally it's when we're doing something new, so if you were going to refit one of your surgeries then you would probably budget for that. Maybe even if you were about to undertake a rebrand. Very few business owners will bound blindly into a new project without at least doing a rough calculation of whether they can afford to cover the expected or at very least the initial costs.

So assuming that we agree that budgeting is worthwhile if you are about to undertake a larger project, why would you budget if you are not expecting anything to change? What is the point?

We all know that the future is uncertain even if you don't plan on changing anything. Your NHS contract may be fixed and there could be minimal movement with your private income but what about your costs?

There are several ways of preparing a budget which I'll run through in a more technical blog another time. However, as a starting point why don't you try using a budget which is effectively last year's figures? Ideally if you have regular bookkeeping then you can actually record each months figures but splitting last year between twelve is better than nothing.

Doing this will enable you to quickly identify any changes in your spending patterns. With a fixed income you might not notice the odd 1 or 2% increase in some of your costs, but if these happen every year, or even every couple months, then that will begin to have a large impact on your bottom line.

Taking the time to compare this month's figures with the same period last year, will also get you thinking about what you are spending money on. Increased costs such as wages or rent you may be happy to accept as natural increases but what about training or advertising?

Having a budget in place doesn't mean that you are on a mission to cut costs; it's actually a very simple way to begin to be proactive with your spending. You can use them as a conversation starter. Maybe you might want to look into what return on investment that you are getting on certain training courses or adverts. Maybe if you have spent an increased amount on maintenance you may then want to monitor some non-financial KPIs such as patient happiness as a result.

If you have regular bookkeeping then we can report on any variances incredibly quickly. You may not want to grow your Dental Practice but simple accounting controls can keep your business healthy and profitable going forward.



 

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