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MailMay 2020--The revenue cycle for dental practices used to be predictable. Coronavirus has thrown that all out the window.
“Dentists are going to have managing cash for a lot longer than they initially expected,” said John Meis, DDS.
Dr. Meis is an international speaker, two-time Amazon best-selling author, and a dental consultant. He’s been a highly-productive practicing dentist, built a large group practice, and served as president of one of the 20 largest DSOs in the country. He leads two consulting firms. Spark Dental Network helps small-to-medium-sized dental groups create sustainable growth. The Team Training Institute helps practices improve productivity, profitability, and peace of mind.
In this video, he talked to Patient Prism CEO Amol Nirgudkar about what dentists should be doing in April to weather the economic crisis caused by the coronavirus shutdown.
How Dentists Can Raise Cash to Pay Expenses
In March, dentists were focused on short-term changes to their business to keep them afloat until their practices reopened. Here are two videos with Dr. Meis on those initial solutions:
Many lenders and credit card companies have enacted grace periods of 90 days with no payments, no interest, and no penalty. But at some point that grace period will end. Plus, dentists will need to have money to reopen their practices and rehire their teams.
“Most dental practices use today’s dollars to pay yesterday’s bills. Now we don’t have today’s dollars but we still have yesterday’s bills, and today’s bills, and tomorrow’s bills,” explained Dr. Meis. “We made it through the initial crisis and stabilized by putting off payments on loans and credit cards and slashed expenses, but now we need to be prepared for another cash crunch.”
Congress passed the Payroll Protection Program, but the rules remain a bit unclear as of April 3, the date that it went into effect. Talk to your accountant about whether you should apply for it immediately, or wait until you’re ready to rehire your team and start production again.
Click here for the Payroll Protection Program application.
Identify Business and Personal Lines of Credit
In the video, Dr. Meis and Amol Nirgudkar discuss the length of time that dental practices might be closed for elective procedures. It’s looking like the ability to reopen will depend heavily on the decisions individual states make to eradicate the virus.
“If you have business or personal lines of credit, I would be drawing on those to the degree that you can park that cash somewhere,” said Dr. Meis.
“Don’t use it now. Don’t spend it. But drawn down those now so you can get the cash out of that loan.”
Dr. Meis recommended checking into home equity loans and refinancing, as well.
Identify Additional Sources of Cash
“When we have cash, we have confidence, and when we have confidence, we make better decisions,” said Dr. Meis.
The stock market is tumultuous, but if a dentist needs cash, now’s the time to talk to your accountant and financial planner about dipping into your retirement savings.
Another opportunity to raise cash is to sell off things that you don’t need. For example, if you have a boat that you don’t use, now could be a good time to sell it.
Dentists can also expand into teledentistry as a revenue stream. The American Dental Association issued guidance on teledentistry to prescreen dental emergency patients. Dentists earn revenue for the teledentistry online assessment as well as any needed treatment. Patient Prism talked to four teledentistry companies to learn about the services each one provides. To hear what they have to say, visit Academy.PatientPrism.com.
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