How to keep the lights on (Part 11)

A message from Dr. Ziv Simon

 

 

March 30, 2020

 

Dear friend

I hope you had a good day, my friend.

I know you're hurting. I know you're anxious. But before I talk about money let's remember one thing:

The most important thing for you and your family is to be healthy. Period. 

No amount of money, aggravation or personal discomfort compares to the value of health. 

You are healthy. You can breath. Your life is not in danger.

Now, keep that status!

Distance yourself. Wash hands like a maniac. Protect yourself at all times and make good choices about treating patients.

This virus doesn't look at your bank account. It doesn't infect based on your bank balance. Your health condition and financial condition are unrelated. 

So first, I want you to feel grateful for not being sick. 

"Thank you, universe!"

Now let's tackle money. 

If you are an associate dentist or an owner of multiple dental practices, you are losing money. You may not be sleeping well at night and probably feeling anxiety about your finances.

I am with you here.

After clearing my head over the weekend, I went back to tackle finances this morning. I'll be all over the financial aspect of this crisis the whole week. I'm also dedicating our broadcast this week to money.

Your focus now is to survive.

No need to think about marketing, saving for retirement, office efficiency, systems etc....

You are in pure survival mode.

It doesn't mean your are helpless or have no control. Absolutely not and you have more power than you think you have.

It's a matter of shifting of focus.

Think about the passengers of the luxurious Titanic. When the ship hit an iceberg, the focus of the people on boat changed in an instant.

Their focus was not getting to NY or having a lavish dinner. 

The focus was not to drown. 

Having financial challenges can feel like drowning but as opposed to being in the middle of the ocean in freezing water, you have tons of resources to help you get out of it.

Throw away your growth plans and previous budget. Discard of your world domination agenda.

Your goal is to get out of the freezing water, stabilize financially and survive.

Once you get on stable ground, you'll rebuild and I believe you'll even grow beyond what you currently think is possible. Let's keep those thoughts for future phases in managing this crisis.

Your first step after you practice closed and you have no production is....

CUT EXPENSES.

BRUTALLY.

You must cut the "fat". All those things that are not 100% "a must" are considered "fat" and are OUT. No mercy here. 

Your business is in freezing water after hitting an iceberg.

You need to get out of a water. Anything goes.

A life jacket, a boat, face mask, scuba diving gear. Anything to keep you warm, with oxygen and afloat. 

Let's keep the lights on.

First thing to tackle is the "fat" layer every business has. The waste (you can be in denial saying you don't have, but that's just denial, isn't it?).

What are those fixed expenses your business has that you can live without?

Don't cut the fat. Burn it.

It will help you 100% and it's the first phase. Look at it as a mission.

You may even need to shave some of the "muscle" layers of your business. That's a little more difficult and you must make brave decisions. 

This is where leaders get tested.

What exactly is "fat" and what is "muscle" in your business? I don't know.

What's for sure is that you don't want the problem to reach the "bone".

A business with "broken bones" is much harder to fix and save.

It's way harder to survive with a business that needs a "cast" or even "surgery".

We must trim layers of mostly "fat" and some "muscle" before  the problem reaches the "bone".

I started today and it only took about 3 hours. Right now it's still inside a google sheet - but those virtual values will translate into actions. 

This is your immediate action plan:

Take all of your expenses from last year. ALL OF THEM.

We are only in the first quarter of 2020 so 2019 is very realistic.

If you don't have your numbers, stop reading this and make a call to your CPA or bookkeeper.

Get the numbers and calculate the total of each expense category. Now divide each by 12 and get the average per month.

Make a 3 months expense projection.

Go through item by item and determine what the expense would be. Remove what is not likely to hit in the next 3 months (for example an insurance payment due in July, don't include it here although you have an average dollar amount).

Start cutting. That is the process.

I am not qualified to give you business advice beyond the general idea of this process.

You overcame the initial shock of closing your practice. You started to adapt to the new reality and started to plan certain things.

Now we all must cut to the chase.

Figure out the expenses you'll be facing in the next 3 months. Cut what's not absolutely necessary.

Fat is not good for you. Start contemplating slight shaving of the "muscle layer" of your business.

You don't want to be debilitated when your practice opens up again. It's a fine line and also a work in progress.

Your projections will be dynamic and will change. Do the best you can!

There are many other steps and principles we all must focus on.

We start today and I'll share more this week.

You got your health. Be grateful and smile. That's most of the war won already.

Now it's time to survive and get to safe grounds. I'm in it with you.

Stay strong!

Ziv.