193: Why You Need Financial Clarity To Grow Your Practice & How To Get It
Apr 25, 2024
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JW Oliver and Tanner Applegate discuss the importance of financial clarity in dental practices, from understanding profit and loss to the benefits of outsourcing CFO-level support. They emphasize the role of accurate financial metrics, technology solutions, and strategic financial structures for business growth.
Understanding profit and loss, EBITDA, forecasting is crucial for financial health.
Leverage fractional CFOs, outsourcing, and technology for cost-effective financial support.
Deep dives
Importance of Financial Clarity in Dentistry
Financial clarity in the dental industry is essential to business success. Entrepreneurs often lack financial understanding as they grow their businesses, recognizing the need for detailed financial reports beyond basic accounting. Having a clear profit and loss statement, well-organized finances, and timely and accurate reports are crucial for making strategic business decisions and understanding the health of the business.
Roles in Financial Management
Different financial roles play a vital part in managing a dental practice's finances. A bookkeeper ensures expenses are correctly categorized in the chart of accounts. A controller ensures finances are organized and provides insights for running the company efficiently. A CFO adds financial strategy, forecasting, and budgeting, helping with forward-looking decisions.
Cost Considerations for Financial Expertise
Hiring financial professionals like bookkeepers, controllers, and CFOs can be expensive, with roles ranging from $30,000 to potentially limitless for a CFO. However, leveraging fractional services and outsourcing financial positions can offer cost-effective solutions, providing access to expertise without the large financial commitment of hiring full-time staff.
Benefits of Having Financial Clarity
Financial clarity enables dentists to make informed decisions, understand profitability, forecast future growth, and manage cash flow effectively. Having a clear understanding of financial metrics like break-even points, margins, and future predictions allows for better business planning and strategic development. Financial clarity reduces stress, improves decision-making, and enhances overall business performance.
In this episode, Emmet hosts JW Oliver, Managing Partner, SupportDDS and Tanner Applegate, Founder, Unify, taking a deep dive into a universal dental entrepreneur struggle: financial clarity and why grasping your business's financial health is crucial to reaching your growth goals. They cover the importance of leveling up your financial acumen from understanding profit and loss, EBITDA, forecasting, ensuring your metrics and reports are timely and accurate, and much more. Emmet, JW, and Tanner explore the journey from relying on accountants for basic financial reports to realizing your need for CFO-level support. They offer innovative solutions for procuring such support from outsourcing, fractional CFOs, how technology can help fill the gaps, and more. If you are looking to take your financial knowledge to the next level, this podcast is for you.