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The Delivering WOW Dental Podcast

This Podcast is for you, the Dentist, Entrepreneur, or Small Business Owner. Voted one of the "Top 25 Women in Dentistry" by Dental Products Report, Dr. Anissa Holmes has effectively mastered the skill of the use of Social Media, with a Facebook following of over 48,000 fans. Dr. Holmes has discovered that the most effective way to get massive results is to first have a vision and to focus on what matters most. Dr. Holmes teaches you actionable steps to develop your dental practice's culture, systems, and brand. Dr. Holmes is going to reveal what works in Social Media, how to build an amazing dental team, and well as strategies to increase your productivity and profitability. Dr. Holmes has figured out what works to create a dental practice full of "Raving Fans". Dr. Holmes interviews Dental Experts and Non-Dental Entrepreneurs such as Mike Michalowicz, John Lee Dumas and Dr. Mark Costes to bring you BIG, powerful strategies to help you scale up your business so that you can achieve more while working less.
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Feb 18, 2019

What's up everyone? It is Anissa, wanted to jump on and talk to you guys about bonuses. When should you bonus? Should you bonus? How should you bonus? And there's lots of different thoughts and ideas about how to reward your employees or your team members for a job well done. Now, before we do that, I actually want to tell you a quick story. So back when I was nine years old, I wanted to get this Rainbow Brite Doll. I don't know if you guys had that Rainbow Brite Doll. If you remember it, if you're old enough to remember it, but it was a really, really colorful doll. She had like blue hair and yellow hair and I just wanted this to doll. But the problem is that I knew that my mom would probably not get it for me. So I came up with this grand idea that I would actually create a lemonade stand to be able to get the money to be able to buy this doll.

And so I came home from school and I said, "Mom, I want to do lemonade stand on Saturday, and so can you please take me to the supermarket." And so she actually said, yeah, she took me to Winn Dixie. And we went in, we were walking the aisles, pushing the shopping basket and I put in my lemons and my cups and we bought some ice and we got sugar and we had a container that we could use to store the lemonade. Now, what I did was on that Saturday morning, I actually woke up and I went around in the neighborhood and I said, "Hi, my name is Anissa. I am trying to raise money to buy a rainbow Brite Doll and I would really appreciate if you could help me. So today at 12:00", and I gave them my address, "We're actually gonna be doing a lemonade stand and that will help me to raise money to buy my doll.

Well, everybody in the community that I knocked on their doors thought, "Wow, what a nice little girl and what a great idea." And so we actually had a lot of people come and to be honest with you, we actually ran out of lemonade. We sold so much lemonade, cup after cup after cup. And at the end of it, I was so excited because we had made $15.48. Now, I can tell you I was ecstatic because the doll was like $13 and I was like, "You know what? I've got enough money to buy my dog." But what was really interesting is that I went and told my mom was like, "Mom, we did it. I got enough money." And you know what my mom said? She said, "Anissa, I'm so proud of you. You worked so hard. And everybody that came, they were really, really happy and like, I'm so proud of you. But what I want you to really understand is that you didn't actually make the $15.38. What you actually made was $2.38.

See, the rest of that money that you made, it actually went to pay for the supplies, the cups and the ice and the lemons. And so what you actually made was what was leftover and that was the profit." Inside of a dental practice, many times we work really hard or our team works really hard and we have the false belief that we have actually made more money than what we have, and we are not taking into consideration the overhead, the team salaries, the benefits that we're giving to our team members, the rent, the water, the utilities, the lab bill, all of our different costs. And a lot of times what happens is that we are not sharing with our team what those expenses are. And so what they see is like what I saw. They saw the revenue, they saw the income coming in to the business, but they never saw the expenses.

And so as you're looking at how can I incentivize my team or better yet, how can I reward my team for a job well done, which I'm a huge fan of? One thing that you want to make sure that you're always doing is you're looking at profit. Now, unfortunately, what happens is far too many practices have no idea what their profit is. They're waiting for their accountant to give them a report and many times their accountant is just really there to do their taxes. And so many doctors assume that, "Well, what we have coming in our production is profit", but the fact is that those are completely two different things. And so what I would encourage you to start looking at is as you're considering rewarding your team, the first thing that you need to do is actually take a step back and look at what is the revenue, what are the expenses, and it's actually quite simple to be able to calculate your profit.

And so what you do is you look at what is the actual revenue coming in, and I don't mean the production which many times is actually inflated because of PPO write-offs. But what is the actual collections? What is the cash coming in? And from there, I say, okay, let's go ahead and remove all of the expenses that we have. So that's going to be all of your fixed expenses, meaning that you have to pay them whether you see a patient or not. So that's going to be your team salaries and your rent and your power bill and your water bill and your utilities, your cell phone bill if you have a cell phone bill, those things will be constant. And then you start looking at your variable expenses. What are your supply costs? What is the cost for you to even buy printer paper and ink for your printer?

A lot of times people really don't think about that, but the fact is that the business doesn't make anything until those things are taken care of. And so the profit is what's left after you look at your income misusing out all of your expenses. And so if you're not tracking that, you can certainly use different systems. Your accountant can help you with that. Internally, we love to do it within our scorecard. We actually have our team member anytime or I'll say this, every week, they put in the revenue that comes in per provider. We actually have hygienists, we have our doctors and so we can see breaking it down, where is our revenue coming from. And then what we do as well is, as a bill comes in, even before it's paid, it is actually the amount is filled in.

So we have a ... if you think about an Excel sheet or if you think about a diagram, on the left, you have a list of all of your different expenses. So at the top are all of your fixed expenses, like I said, all of your employee wages, etc, and below that is all of your things that are variable. So you have all of those different fixed and variable expenses and then at the top, you have like January and February, March, April, May, all the way through. So that way at the bottom, again, month by month, you can see what is your revenue. So that's your top item, what are your expenses, and then you see your profit. And if you break it down this way, it also allows you to see month to month to month, what are your expenses for each particular item. So you can look at, well, what are my expenses or how much am I paying for my power bill? So if you see that it goes up one month, you're like, "What happened?" Or if you look at your lab bill and it goes up, you can say, "Wow, well we had a good month", or you can look at your marketing and ensure that your marketing has given you an ROI. You can make better decisions.

And so I definitely encourage you to start looking at your expenses, looking at your overhead as well as obviously looking at how you can increase your cash that's coming in. So those are all of the business strategies that you have that you're working on with the other metrics on the scorecard, tracking your production per visit, hygienist production per visit, your reappointment rate, all of those different things. But again, just to keep it really simple, if we're looking at giving bonuses, guys, please do not make bonus one of your fixed expenses or one of those expenses that are at the top. You always want to make sure ... because guess what guys, what a business makes is at the bottom and a lot of times we think, Oh my gosh, we've made...", and you and I see practices that are making $3 million or they're bringing in $3 million worth of revenue, but then their expenses are like 280,000. And so everybody thinks the doctor is like a multimillionaire and the business is only making $200,000 a year which may seem like a lot, but to be honest with you, by the time the doctors paid and you're wanting to have money to reinvest in equipment and reinvest in growing the business, if you want to look at a new location, it's gonna come up short.

So again, I just wanted to come on and talk to you guys now about the truth, about numbers, the truth about bonus systems, and I want you to consider getting vulnerable and telling your team. I can tell you, when I told my team and opened up about the truth, about all of our expenses, their mouth dropped, they couldn't believe it. They Just saw the income and they thought obviously, just like I did when I was a little girl and I saw the money come in from the lemonade stand. They thought that that's what the business made. And so I had to educate them and teach them about what a business actually makes. And then I said, "Now I want you guys to actually ... because you're working so hard, I want to be able to create an opportunity for you to make more money. And so anytime we are getting profit, then we will share that profit with you. So you can make a decision whether you want to share 3% of the profit 4% of the profit, 5% of the profit, whatever that's going to be with your team.

But now it makes sense because you are actually sharing something after all of your bills are paid and it puts you in a much better piece of mind state. Again, I see doctors all the time that are giving bonuses to their teams and they're not even getting paid, which is crazy. So that's one of you that are listening right now. You just need to stop it. Alright? It means that team members are gonna be a little bit upset perhaps because things are changing. But how do you get over that is by having a real conversation and being open and honest about where things are and if you got the right people, they might be disappointed, but they'll understand. And you want to have people that are motivated.

Again, when I told my team, all of a sudden, they started working harder. They were like, "Doc, we thought we were making a lot more money than what we were." Again, they were looking at the top number and I was like, "Yeah, guys, that's why we got to work so hard." It made sense and they Started to work harder and all of a sudden, the numbers just started to get higher and higher and higher with our profitability. So I hope that helps. If you guys have any questions, just drop them on the inside of our Facebook group and that's the best place to be able to connect with me and the Delivering WOW hang out.

And again, I hope that this helps to make you think a little bit about what you're doing in your business. Are you looking at your numbers? And really, how are you rewarding your team? And I love to reward my team. So I encourage you, if you have a great month, if there's a lot of extra profits, share it with them. It will get them knowing that you really appreciate all of their hard work. Again, if you're gonna do a bonus, it's completely fine, but just do it the right way. All right guys, that's it. Take care until the next episode.

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