Business For example: Hope to sell the practice soon — Remodel — save $65,000. Open a dentistry hub — raise increase profitability by 4%. FINANCE dentistry revenue by 8%. Budget for Success in 2024 Projecting revenue and expenses can be daunting, but a measured approach will lead you to profitability. BY MIRA JOHNSON, CPA, CVPM, MBA Revenue uses a simple formula. To increase revenue, you must see more patients, or the average client transac-tion needs to go up. If you have days of waiting for the phone to ring, focus on the number of patients. If that’s not the problem (and before you hire addition-al staff or extend clinic hours), look at the average client transaction instead of patient intake. In addition, remem-ber to include fee increases. 4 3 Estimate Revenue A 1 2 Estimate Expenses wise man once said a goal without a plan is just a wish. That’s why every veterinary practice should have a budget. How else will you know if you’re headed in the right direction financially? Or what you will need to change to get there? Many hospital owners find change intimidating. But please give it a try. Here are five ways to prepare a 2024 budget. Use Technology Establish Goals digital X-ray unit? How about becom-ing the go-to dentistry specialist in your town? Whatever your goals are, write them down alongside a number. Do you hope to retire or sell your practice within five years? Are you try-ing to hire another doctor, or do you want to move to a bigger building, remodel your hospital or buy a new 26 todays veterinary business.com 5 Review the Budget Regularly A completed budget shouldn’t remain untouched. You can tweak it as the istockphoto.com/kadirkaba Looking at past transactions, cyclical changes (mountains and val-leys) and growth trends to identify sol-id budget numbers is time-consuming. The solution: apps, not spreadsheets. Check out Budgyt ( budgyt.com ), Fath-om ( fathomhq.com ), Jirav ( jirav.com ) or PlanGuru ( planguru.com ) to get started. When selecting an app, con-firm that it integrates with your accounting software so the data is pulled in automatically. You should have to do little or no data entry. Start with the most vital expense when you allocate funds. Then con-sider the second item on the list, and so on. This approach will help you set aside money for the highest priorities. Remember to distinguish between fixed and variable costs. For example, how much you spend on drugs increas-es as you sell more of them, so the cost of goods sold is a variable expense. (Good software should adjust those numbers automatically.) On the other hand, rent is a fixed cost that remains the same whether you see 10 patients a month or thousands. Anything that repeats or is cyclical, like insurance and property taxes, should be picked up automatically with good software. Finally, when estimating expenses, leave room for profit. Do not budget for negative numbers; those are losses. The only exception to the rule is when you open a new practice and budget for the first few months.
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