Episode 23: Toolbox Tuesday-Evaluating Overhead Expenses and Defining our Why

Toolbox Tuesday Episode Recap: On Target Tracking Series - Week 2 "Understanding Overhead and Defining Our 'Why'" **Introduction**: Welcome to another insightful episode of Toolbox Tuesday from Pathway Dental Solutions, where we aim to empower dental business owners with practical advice and actionable insights. We're diving into the second installment of our four-part series on the On Target Tracking system, a cornerstone for effective practice management and growth. This week, we turn our focus to evaluating true overhead expenses and establishing the powerful "why" behind our providers' income goals. **Key Takeaways**: 1. **Evaluating True Overhead Expenses**: Jennifer Paxton highlighted the importance of understanding and managing overhead expenses. She noted, "Many team members have a misconception that doctors pocket nearly all the revenue from procedures like crowns, without understanding the actual overhead costs involved." By educating the team on these expenses, we helped shift perceptions. As Jennifer put it, "Expenses don't stop when the practice is closed for holidays. Mortgage, rent, and loan payments are due regardless." This transparency has been crucial for team members to grasp the full picture of practice finances. 2. **Breaking Down the Numbers**: It’s important to break down large financial goals into manageable components. “Big numbers can seem insurmountable. We break them down into monthly and weekly targets,” Jennifer explained. Small wins accumulate and create momentum, making larger goals feel attainable. 3. **Establishing the ‘Why’**: A significant part of this episode was dedicated to understanding the "why" behind providers' income goals. Jennifer remarked, "Team members often feel that their efforts simply make the doctors richer." By shifting the focus to personal financial planning and goal setting, team members become more invested. Dr. Sten Ericson emphasized, “It’s not about pointing out what team members don’t know. It’s about guiding them to see possibilities beyond their current situation.” This alignment helps everyone feel valued and motivated, leading to better performance and job satisfaction. 4. **Improving Team Morale and Performance**: Transparent conversations about finances have positively impacted team morale. "Once team members understood the overhead expenses and their role in the practice's success, they became more engaged. It's not just about their payroll, it's about being part of a thriving business," said Jennifer. The introduction of the profit-sharing plan also played a pivotal role. "Instead of a token gesture like a gift card, our plan offers substantial rewards that reflect the team's hard work and contributions," Jennifer shared. **Quotes Worth Remembering**: - “Expenses don’t stop when the practice is closed for holidays. Mortgage, rent, and loan payments are due regardless.” - “Big numbers can seem insurmountable. We break them down into monthly and weekly targets.” - “It’s about guiding team members to see possibilities beyond their current situation.” **Key Actions for Dental Business Owners**: - Shift team perceptions by educating them about true overhead costs. - Break down larger financial goals into smaller, attainable targets. - Help team members establish their personal "why" to foster better engagement. - Ensure transparency and offer substantial rewards through profit-sharing plans. **Closing Thoughts**: This week's episode provided profound insights into two critical components of practice management: understanding overhead expenses and aligning team motivations with financial goals. By fostering a culture of transparency and shared success, you can dramatically improve both morale and performance within your practice. If you found this episode valuable, please subscribe to our podcast, leave a review, and share it with your network. Stay tuned for next week’s episode, where we will continue exploring the components of the On Target Tracking system. Thank you for tuning into Toolbox Tuesday. Until next time, let’s keep our overhead in check and our goals aligned!