Smart Budgeting For Growth: How To Scale Without Financial Stress With Austin Moffat

In this episode of Dental Wealth Multiplier, Jonathan Moffat sits down with his brother and Managing Partner at DSO CFO, Austin Moffat, to talk about the financial strategies that every dentist needs to know, but rarely sees from their current advisors. They dive into why EBITDA matters more than you think, how to tie personal goals to your practice financials, and why scenario planning should guide every big decision in your business. This is a tactical, behind-the-scenes look at how top practices are managing cash flow, measuring true profitability, and building toward personal freedom.

Find Jonathan at jonathanmoffat.com
Learn more about Aligned Advisors at alignedadvisors.com
Connect with Austin and the team at dsocfo.com

Find Jonathan on LinkedIn: https://www.linkedin.com/in/jonathanmoffat1/
Find Austin on LinkedIn: https://www.linkedin.com/in/austin-moffat-88715a59/

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Smart Budgeting For Growth: How To Scale Without Financial Stress With Austin Moffat

Welcome to another episode of the show. I have with me a very special guest, my brother Austin Moffat, who is the managing partner at DSO CFO. We’ve got an awesome topic we’re excited about talking. It’s actually something that I get people talking about a lot recently, which is around profitability and how do we operate our practice, or even grow or even scale without the stress and without having that stress.

We’re going to talk about some best practices. We’re going to talk about the smart budgeting for growth so that you can grow your practice or your group of practices without that stress, and talk to you about some best-case scenarios and some case studies of clients that we work with who’ve done this very successfully. Austin, welcome to the show.

Thanks for having me. This is a great topic. Excited to get into it.

Finding Financial Blind Spots: Monthly Dental Reviews

If you think about this topic, I’m sure you get almost every day, I’m talking to a doctor about how we’re seeing profitability is lacking. The biggest thing I’d say is “It doesn’t feel like we have any money left over or I’m watching my bank account. I’m keeping an eye on my bank account.” If you’re going to break it down into maybe let’s say three takeaways or three maybe best practices or things that you absolutely should be doing to reduce stress, to make sure that you have that you’re looking and handling your financials or budgeting or the financial aspect, operational aspect of a practice in a way that will help the owner reduce stress. What are some of those things that come to your mind?

I think every business owner goes through this, not just dentists and practice owners, but for me, in doing this for several years, I think the biggest thing is, are you reviewing your financials on a monthly basis, or at least just a regular basis, or at least a monthly basis? That’s one. B, do you understand your financials? Do you understand what’s taking place in your business from a financial standpoint? If I’m feeling I don’t have a lot of money, my bottom line is showing that we made $20,000 last month, but I’m not seeing that in my bank account, or we made $40,000 or $50,000 or whatever.

My bank account isn’t showing that. The math isn’t mapping. Are you understanding what’s happening in your financials in that aspect? Look, there are a couple of answers or a couple of reasons. It doesn’t show up not to get too in the weeds and nerdy on the accounting side of things, but your principal loan payments or your owner draws, for example, or even dental equipment or furniture or any leasehold improvements, for example, some of that stuff that probably is a little pricey, a little expensive, especially hits the bank account or the credit cards fairly heavy.

Some of that stuff doesn’t show up on your profit and loss statements for various reasons. That could be an answer why your net income is showing $40,000 net income bottom line, but your bank account is showing maybe $18,000, for example. I think that’s the transparency that needs to be conveyed to the owner doctors. Net income and cashflow, not to get confusing, they are not the same thing, unfortunately. They’re different things. Number two, for me, is do you understand what’s happening in your financials?

Number three, in my opinion, is do you have goals? Do you have goals that you are tracking and that you are following and then holding others accountable, yourself, and others accountable, that you’re reviewing in your monthly financials or your profit and loss? That could be revenue goals. You have a goal of doing $150,000 in revenue a month. Are you tracking that? If you are doing consistently below that, say you’re doing $20,000 consistently below your revenue goal, are your goals realistic? Yes or no?

Are you meeting with your team members, your producers, your associates, your hygienists? Meeting with them and making sure that they’re buying in on the goals. Are they too high? Are they too low? That’s just one example. You can go on the expenses from there on. Do you have a goal as to how much you should be spending on dental supplies, lab fees, marketing, and payroll? Do you have those goals in place? Yes or no? It’s okay if you don’t.

We can maybe touch on a little bit today, maybe a good starting place. Anyways, not to get too far into the weeds, Jonathan, but I see those are the three things that I would heavily stress. It’s one, are you reviewing your financials regularly or at least monthly? Two, do you understand what the heck your financials are saying? Are they telling a story that is realistic to you, and it makes sense to you? Three, do you have goals that you’re tracking on a regular basis?

Turning Red To Black: A Dental Finance Success Story

As you were talking there, I thought about a mutual client that we have. They’ve got four practices. They’ve gone through, I think, what’s probably a typical cycle for groups that we see that we work with that go from one practice to 2 to 3 to 4. It’s this natural progression that groups go through, and they were working with a consultant, and they were doing a lot of things right. It was like they weren’t understanding.

They weren’t getting the right reports from their accounting group. They weren’t really reviewing them. The doctor, I think, thought that they had a really good understanding of what was going on financially, but for whatever reason, it wasn’t looking at the right numbers. A lot of things weren’t happening that the doctor thought were happening and all that came to a head Q3 of last year, and they found themselves in a really actually bad position where they were like very low cash flow, dipping into personal savings to keep the practices afloat, looking back to banks for lines of credit to again, keep the practices afloat.

Around Q4, they’re like, “We want to start working with you guys.” We’re like, “Let’s take them through the process.” Maybe we just talk about that process a little bit. We can talk about the success that they’ve seen just in the last four months. In fact, I just met this client earlier this week. These numbers are fresh in my head. The first thing we did was we looked at their past prior experience, of the practices. We created a budget forecast.

We call it a budget or forecast, but for 2025, basically saying this is what the practices have been done historically. What do we think they can do in 2025? Let’s forecast that out over the next twelve months as far as revenue that we want to hit. The goal of revenue you want to hit. Expenses. Ultimately, what drives all of that is what’s the actual bottom line net income or profit that we’re shooting for, for the owners.

That’s ultimately, in my opinion, the most important number. That’s what should drive all the other numbers is that number right there. You and I, you’ve heard me say this before, especially around KPIs or setting budgets. A lot of times in the accounting world, you hear this acronym BAM, Bare, Arse, Minimum. When I speak, I’m like, “It’s like the dumbest thing I’ve ever heard.”

You’re like, “How many of us go into business? I’m going to go start a business so I can make the Bare Arse Minimum.” Not a lot of people like that’s their goal. That’s not your goal. Why would that be something you measure? Now look, I understand that it’s like, “What’s my breakeven?” Again, that’s fine if you’re going to track your breakeven, you better make sure that your personal revenue goals that you need as an owner operator or as the owner of the business, you better make sure that revenue or that desired income is built into that breakeven.

Otherwise, you’re to find yourself in a situation where every month you’re like, “I’m paying the practice bills, but there’s nothing left over for me.” I was thinking about that, and then this mutual client that we started working with together in Q4 of last year. What I think is cool about that is you did a great job of building a budget and a twelve-month forecast. We did two couple meetings with the client to get that dialed in. We were like, “Perfect.”

They hired a new consultant. We shared that budget and liked those forecasts with the consultant. They’re like perfect. They put all that information into their dashboard that they’re tracking their dental software. They got the team on board. This was the goal. They would have regular reviews of those financials, goals. Most people look at their financials monthly. That’s what my challenge is. That’s fine if you do a review, but like, there are aspects of the plan I think you should be reviewing on a more regular basis. What we’ve learned having seen the success, there’s a pattern of success.

The clients that we’re working with, that you’re working with, that have, like we’ll get into our client, and you know well, who have a 30% EBIT or a 30% net income, and they have eight practices. Thirty percent, I’ve heard of. There’s this pattern that these doctors, these groups have, and that they implement, that it’s just like, “If you do this, you’re going to see positive results.” I think to your point, like they had a plan, put that plan in place, and regular reviews. You do like a full financial review. How often with them?

Winning With Weekly Cash Flow Strategies

We have a couple of me. We do like a full set at least once a month, like full on in the detail. Each of the locations is like a full-on month. On a weekly basis, we review their cash flows with them. Now they’re a little bit more hands-on on but that’s okay. That’s what they hired us for. That’s what they wanted. That’s what we can certainly deliver. It’s on a weekly basis. It’s a little bit more than that because we then communicate throughout the week.

On Fridays, we send out reports to them as well to pay themselves management fees, so we can touch on it in a little bit, which is new to them, new in the last quarter. Again, a financial goal that we set with them. Anyway, so we’re talking to them a couple of times a week. Touching base, and they’re pretty dialed in as to what’s going on in their practice from a financial perspective. It’s pretty hands-on.

Just to give a little background that she mentioned it like they weren’t paying themselves a management fee. They weren’t paying themselves anything really. They were dipping into their savings to keep the practices afloat. This system that we know works, which is create a plan based off of historical numbers and where they want to be forecast out of the future, measure that at least monthly, but with cash flow check-ins on a more regular basis.

All of a sudden, now they’re paying themselves a debt. By the way, their management fee is eleven percent. They’re paying themselves an eleven percent management fee. They’ve been paying themselves that consistently now over the last few months. The other cool thing is we’re looking at their numbers. I said I had a call with them earlier this week. These numbers are fresh. We pulled their 24, they’re rolling 12 months. That’d be like February of ‘24 through February of ‘25. Their net income was negative eight percent.

That was their net income. We looked at the last six months, and it was almost break-even. I was like, “What about the last three months?” Since we started implementing the system, what has it been? They were 17% profitable, even from a negative 8% profit to a positive 17% profit. They’re looking at their goals, are mindful of where they are. They know exactly where the cashflow is.

They’re getting weekly financial cashflow projections from you, saying this is how much is in the bank account. This is what payroll is this week, or this is what your loan payments are, or this is when rent is, and this is how much is left over. Again, as a business, you need those reports, like with our group, with our eight locations, every Monday was that meeting for me. Every Monday, I’d be on the phone with Austin and someone from your team.

I’d have my regional manager there with me, and we would go through all of our practices, and we would look at the cashflow. Be like, “What do we need to collect? What do we collect? What didn’t we collect?” We’d go over those key numbers for us. If you’re not looking at those numbers, in my opinion, on a weekly basis and analyzing that, then you’re not serious about growing or being running a profitable business. You should be looking at those numbers. Now, you and I were talking for the podcast, and we’re like, “Do you always look at those numbers?” I’d say this.

Many of you know there’s a podcaster, a business guru, Alex Hormozi, probably from Erdem. I was listening to him a few weeks ago, and he said, “I used to check my bank balance every single day.” He’s like, “Do you want to know when I stopped checking my bank balance every day?” I think he said $20 million in the bank.

He’s like, “Once I had $20 million, I stopped checking every day.” It’s like maybe every week or every month or whatever. The point is this. If you’re feeling the pain or you’re not in a place where you want to be in your business from a cash flow standpoint, you should probably be checking the bank balances every single day. At a minimum, I’d be in there every week understanding, “Where are we? What needs to happen?

What’s working? What isn’t working from a cash flow standpoint, from an expense standpoint, from an overhead standpoint?” Maybe it’s a good lead into like KPIs, because key performance indicators, budgeting, like all that, you’re going to have to have certain percentages within your budget of what you want to hit for those. Talk to us a little bit about what we see for as far as like best practices around the KPIs and setting those.

Demystifying Dental KPIs: Making Numbers Work For You

Let me talk on the KPIs for two seconds because I think there’s a level of understanding as to the KPI. Look, here’s what most practices should be tracking. I’ll give you the percentage out of a hundred, what these are, and why it’s so important. You want to start with revenue. Now that’s certainly a KPI, but that’s an internal goal. That’s something that you absolutely 100% should be tracking on a monthly basis.

I would go as far as to add, if you’re on the cash basis of accounting, and what that means is simply just reporting what has come through the bank, and speaking specifically to deposits, that’s just what was deposited in a certain period of time, i.e. month. If you have a goal of producing $150,000, but you’re consistently collecting about $130,000, $135,000, $140,000, whatever, $1,000. You’re consistently collecting below what your production goal is.

Now that’s a direct indication of collection. That’s a separate discussion, but that’s going to accrue over time. Anyways, not going too far deep in the weeds on that. That’s absolutely something that you should be tracking. For our clients, we actually customize that line item. Those are on a cash basis. We actually go in, we’ll pull the numbers from their practice management system, and we’ll enter what, like the net production.

After adjustments and write-offs, what that is so that they can know, “You produce X, but you only collected X. That means that you should have $10,000 or $15,000 more in your bank account. You track that on a monthly basis. That’s just straight EBITDA. That’s just straight money in your pocket. You’ve already done the work. You’ve already paid the overhead expenses. You’ve already done it all. That’s just straight money dropping in your pocket at the end of the day.

That’s too far in the weeds on that. That’s KPI number one. Number two is this clinical expenses. That’s dental supplies and lab fees. Now it varies per practice, per group, per business model. Generally speaking, you want to be about 6% of your revenue on dental supplies and 5% of your revenue on lab expenses. Now again, that varies per practice, per strategy. That is just 11% in just those two areas. That’s 11% of your revenue boom out the gate on clinical expenses.

Let’s go down to marketing, is your next KPI. Again, based on your business model, your business strategy, you want to be somewhere between 3% and 5%, depending on what your goals are. Let’s just be conservative and let’s just call that 3%. There’s 14% of your revenue, and just clinical expenses and marketing. Let’s jump straight down to the big one, payroll. Now, you should be no more than 50% of your revenue on payroll. Now that does include associate wages. That does include the owner doctor as well.

If they’re clinical, if they’re actually in there doing dentistry, right?

Yes, correct. You can break that down. I’ll touch on that for two seconds. Again, it varies. Generally, you want to be of that 50% or 20% of that is associate wages, 10% is hygiene. That’s 30%. 8% is a dental assistant. 7% is office manager administrative wages. There’s 45% right there, and 3.5% to 4% is payroll taxes. The rest is like payroll fees and a little bit of fast. That was probably TMI, probably on the breakdown, but that’s how that’s broken down. Now you’ve got 14% between clinical expenses and marketing.

Add on another 50% to that in payroll. Now you’re looking at 64% of your revenue out of the gate in those three categories already. Again, that’s why they’re key performing indicators on your financials. Another one is rent. Rent is obviously a big expense. It’s fixed. You don’t want to exceed 6%. You’re like, “How is that possible? It’s a fixed expense.” It’s purely an indication of your revenue. Are you producing? Are you doing enough revenue to justify the space that you’re in? Yes or no.

That’s really what that is. You’re at 6%. Now you’re at 70%. You’re at 70% of your revenue in just those areas. That doesn’t include office expenses, internet expenses, Disney subscriptions, travel, continuing education, or any legal, should you have any legal. Any professional fees if you have a consultant? It doesn’t include any of that stuff, meals and entertainment. That’s why those KPIs are so important to A, have, and then B, track.

It’s so key because if you’re not, then how do if you’re fat in areas where maybe you shouldn’t be fat? Look, what’s awesome about that is that we have a couple of clients where they crush it on their budgeting. That I’ll just use that group that you mentioned, Jonathan, our client with the eight locations that are doing about 30% in EBITDA. Like they are consistent month over month, and all their practices. Their model is so awesome to watch.

In fact, they’re one of the clients that I prepare my monthly meeting for and I go, “What can I learn from them?” Which is pretty awesome because it’s a little unique in that regard, but they crush it. I was just reviewing their financials yesterday as we’re preparing to close out February for them. I was reviewing their stuff yesterday. I’m like, “Holy moly.”

They did about three, it’s like a little bit close to 4% in dental supplies in the month of February. How did they do that? I’m like, “Do you know what that does?” That allows you, and if you’re consistently performing better in some of those areas, then you can actually either A, take a little bit more of a draw as an owner. That’s an option, which is pretty awesome. B, if you want to invest some more money into your marketing, into the growth of your business, if you are doing consistently 4% in dental supplies, 4% or even 5% in labs, you’ve given yourself a 2% window.

What could that mean? If you’re doing $100,000, 2% is $2,000. You can initially inject another $2,000 a month if you’re consistent with the savings to marketing. Now you’re setting yourself up for growth, and you’re setting yourself up for success down the road. I think that’s pretty unique if you’re in a position to do that. That’s what these guys do, really. Anyways, go ahead.

Powering Growth: Strategic Reinvestment in Dentistry

No, I was thinking you reinvest it back into like, just training and team development. I like what you said about the space, like, “You’re on rent, you want to be around 6% of your revenue, like your cost of your space where you rent, or you have a mortgage payment.” What’s interesting about, again, I having this conversation just a couple of days ago with a client around on the employee side is

most businesses think, and you do want to run efficiently. That’s why you’re looking at these numbers on a regular basis.

You’re setting goals. “If my supplies are this and my lab is this and my employee costs and all this, this is what I should have leftover in net profit.” Which is what I, as an owner, would need to then go do the things that I want to do, fund my personal goals, go grow, whatever. What’s interesting is when those numbers aren’t like, “I’m at 9% in my cost of my space, or my employee cost is not 50%, it’s 57% or 58%. I need to downsize. I need to fire some employees, or I need to downsize my space.”

Instead, what I would say is “You can think that way.” It’s that scarcity mindset of like, I’m going to think of how I can downsize to get the number versus what I would tell you is what most of these doctors and business owners do that are successful is they think, “How can I use that space or those team members more efficiently and effectively to drive up the revenue? How can I do more with what I have?” Sometimes your space, you’re stuck with that. Again, on a call yesterday with a client, they’re in a ten-year lease, have nine years left in this lease, and they’re like, “How to get out of this lease?”

I’m like, “Probably not going to get out of that lease.” It’s really hard to get out of the lease. Instead, let’s think about how can we maximize the space in order to drive more revenue so that the percentage goes from 8% or 9% to 6% to 5% to 4% to 3% or whatever. The only thing that’s going to affect that fixed cost. There are fixed costs in our business. That’s one of them is increasing the revenue is the only way to drive that down. Same thing with employees. Again, I think about this group, and we did a podcast interview with any of them.

If any of you want to go listen to that, they’re amazing, this eight-location group. They talked about this around their team. We realize that the only way to have that team costs, “How do you get the 30% EBITDA?” You get there because your team is so good and so efficient and so effective that their revenue contribution to the office offsets their costs so much that it drives down your expenses and drives up your EBITDA and your net income.

To your point, you’re like, “Good. You’ve been able to free up 1%, 2%, 3%, or whatever percent by cutting whatever expenses, labs, whatever.” I’m super passionate about this idea, this concept around leveraging or capitalizing on these opportunities in business. What could that 3% do if you reinvested into the training your team, who then now your team costs, your employee cost goes from 50% to 47%, to 45%, to 43% because your team is more productive in contributing revenue at a higher rate to your practice, which is causing that overhead is not dropping because you’re firing or letting go of people.

It’s dropping because the people you have are more efficient and effective. That’s the piece that I think most of us, again, I’ve shared this story when I was early on in my career. I’d look at my overhead like every week and stressing out and racking up credit card debt and taking lines of credit against my home just to get my business started. I was so fixated on the cost and the overhead because that was the easy fix. Like, “If I just shave off a dollar, $50 here, $40, which can you should be efficiently and easy.”

I’ll never forget how to consult it. She goes, and it was Ann, like “Jonathan, stop. All this time you’re spending on focusing on cutting expenses, you could be focusing on going out and getting more revenue. The revenue is going to fix that problem a lot faster than looking at cutting these expenses.” The additional revenue is going to help you feel less stress and anxiety, more than like, “I just saved $40 because I found out this is going to date me, but how to go get photocopies made at like $0.10 each less or whatever it was?”

Again, I think a lot of times as owners, we were so fixated and focused on cutting overhead and expenses. Again, there’s a certain element of that you should be, you need to be aware of and tuned into what your expenses are. I think there’s waste in almost every business. You want to always be looking through how you can run more efficiently. As far as like, how do you get the needle to move in like these big swings? It’s going to happen by reinvesting your business, looking at what can you do to drive more revenue, and make the space that we have more efficient and make the people that we have more efficient for us.

Revenue Focus Vs. Cutting Costs: Key Financial Shift

Look, I agree. It’s just like a short little phrase, if you will, that I often say just to our clients, just when in the exact same situation that you’re painting, I say, “Look, agreed. There’s always an opportunity to look at expenses. There’s always a little bit of fat that needs to be trimmed down always.” I think you should always be looking at that. Focusing on the revenue, that’s the long-term solution at the end of the day.

Cutting expenses, you should always, always look for an opportunity to do that, but that’s a short-term solution too. Let’s say you look at your wages, and if truly you feel like there are too many people. Back to your point. Am I using everyone efficiently? Yes or no. Maybe you do have too many bodies. That’s very well could be a possibility, but if you focus on the revenue, then there’s likely going to be an opportunity for you to deploy those employees right to revenue-related efforts. I think there’s so much truth in that.

If you focus on the revenue, use the resources that you have to go and grow revenue, then you’re setting yourself up for success. You’re giving yourself more opportunities, more options. Anyway, it’s just echoing your sentiment. I think it’s easy to climb up and to play a little bit of defense when you’re tight, but before you get there, I think I was speaking with someone earlier this week. There are up and down months. Some months, like during the holidays, for example. We’re on the backend of the holidays now, but what will be on the holidays?

Like, “Look, January was tight for a lot of our clients, almost all of our clients. Let’s talk about that.” November. You had lower production days. People going on vacation. Team members going on vacation, patients. I’ll speak as a patient myself. I’ll tell you the last probably two weeks of the month in November, I didn’t want to go see the dentist because I wanted my teeth feeling good for Thanksgiving. I wanted to be able to enjoy Thanksgiving without being having sensitive teeth or having work done. I didn’t schedule.

I’m sure I’m not the only one. Just from a patient perspective. You’re going to have lower working days, and then you’re going into Christmas, which also provides even less working days. You have Christmas parties, you have end-of-year bonuses that you’re paying out. Your expenses are staying the same, arguably going up a tap. Your revenue is dropping, or your production is dropping a little bit more. In comes January, and you’re on the backend of back-to-back lower production days.

You’ve had throughout the year. You’re stressed. We had clients who were stressed. We were stressed with our clients. Reviewing their cashflow with and it goes up and down. Before that, though, maybe in your August, maybe in your October months. I think there’s an opportunity to be proactive during those successful months.

Maybe on those really awesome months, maybe you put some money aside for some of those lower production day months, if you will. I guarantee you, if right now I know January and February have been relatively awesome for a large majority of our clients. There’s been a pretty serious rebound in early 2025, which has been pretty cool to see. Look, keep doing what you’re doing. Obviously, celebrate your wins, celebrate your victories, but can you put some of that money aside for some of those tough periods, for example, from a cash flow.

Maybe you’re not worrying about the stress. You’re not as stressed out during the September, during the holidays, during maybe the summer, where, historically, you’ve had a lot of associates or patients leave to go on vacation in the summertime or what have you. Is there an opportunity to do that? Go ahead.

I think that comes into also what we’re talking about the very beginning, which is like on the butt forecasting, budgeting, having a plan. Part of that forecast you’re going to see, in fact, our cohost, Dr. Eric Roman, talks about this with his practices he had, which is that they just knew that because they saw the pattern, they pay attention to it, that September was always going to be a slow month.

You’re like, so what if you knew what those slow months were in your practice months ahead of time, and you could start planning and preparing for those slow months. You’re like, “If I know that September is consistently a slow month for us, what can I be doing now in February or March or April to begin to prepare?” Not necessarily like, we’re going to be back, but you could be like, “If people want to take vacation, maybe you encourage them to take it in September.”

If you’re like, “Do you want to do a clear liner day and build it up in September, like back to school, whatever.”  “Moms, we have a client is an orthodontist in LA.” He goes, “I do that for moms on Mother’s Day.” I’m like, “That’s such a great idea. Do it like a clear liner day where there’s some a discount or a benefit or whatever, where you’re building up to one day.” You do that. If you have multiple locations in those practices in September, to help curtail that so that’s not a slow month, or put specials, or do more marketing.

You start to think about and start to look at your practice as a business ahead of time because you have the tools, the budget. You know what those are. You review where they are. You know, are we off track or ahead of track of our goals that we set back in December for the year? You’re looking at it on a regular basis to see what modifications and changes you can make.

What was cool going back to this client we talked about earlier on, who has the four locations, who none of the practices were hitting goals, and none of the practices were profitable. They were putting their own money in is now their consultants are having a conversation with them about, “Your practice is about to hit goal for the fourth month in a row,” which they never did before this practice doing about $260,000 a month. They weren’t doing it before, they’re hitting it now fourth month in a row.

Let’s now have a conversation around where do we go next with this practice? Which is a really cool thing to see. We wrap up here, Austin. What are one of the things you do like at the end that just you want to go, “If you didn’t want to listen to the long two brothers wrapping out over the last whatever 30, whatever minutes, like you can fast forward to this part of the podcast and get the top takeaways.” What are our top three takeaways for anyone who’s either did listen or maybe wanted to fast forward to the top three takeaway segment of the show?

Top 3 Budgeting Hacks For Dental Practice Owners

I think the three things, and I’m going to highlight it in the middle, are this one, are you reviewing your financials on a regular basis at least once a month? Yes or no? Two, do you have goals that you’ve set for your practice on those KPIs? Again, revenue, dental supplies, lab fees, marketing, payroll, and rent. You can add on net income.

Ultimately, I think you’re saying like those KPIs or those budget numbers should be customized to you. Those should be customized to your practice or group of practices. If you want to start with like the industry averages at first, fine. Ultimately, you should have a goal to have those customized to you.

Correct. Look, it’s okay if you don’t know what those are. It’s okay if you feel like maybe what you have is unrealistic. It’s good to have a gut check every now and again and just see, “What are the benchmarks as of right now?” It’s good to know. It’s never a bad thing to look and see what those are and compare them to what you have and determine, is realistic or not what I have. That’s two.

The last one is, are you being accountable to yourself? Are you holding others accountable to those goals, assuming that you have them set up? Again, you could say, “I want to do 5% of my revenue on dental supplies.” If you’re consistently hitting 7% or 8%, then what’s the point of tracking if you’re not holding others accountable at the end of the day? Those are the top three things. Look, we have clients that they know their financials so well because they’re reviewing on a regular basis these financials.

We meet with our clients monthly and touch on these things per location every single month. In areas where they’re high, we drill in and we say, “Why was this high? Can we go speak to the operations manager, Susie, or can we go speak to Jeff, the office manager, and ask why this is high and why it’s above the budget that we set?” That’s what happens during our meetings. That’s where you can involve the other team members. That everyone is now growing in the same direction, if that makes sense.

Have a plan, budget, forecast, have a plan, make sure you’re it regularly, minimum monthly, you should be in there every week. If you want the best practices of how these groups that are crushing it are doing it, they’re doing it weekly. They’re in there looking at their cashflow expenses, doing cashflow forecasting weekly, but you can certainly monthly. Have a plan, review it often.

In that plan should be custom KPIs, Key Performance Indicators, for those who don’t know what that is, or just basically those percentages of like this much percent for supplies, labs, all those percentages. Again, tracking and reviewing those on a regular basis as well. Those three things, if you’ll do those three things, that is what the top of the top are doing. I’ll just add this again, this is probably a topic for another podcast, Austin, but it is so important as the owner of the business to make sure that you’re getting paid and that you should be getting paid first.

I know that sounds crazy. I know you’re like, “How does that make sense?” As business owners, we always put ourselves last. My wife’s always telling me, “You put yourself last.” That’s something I was trying to work on and try and be better at. You certainly, and especially as a startup company, it’s really hard to think about that.

As you find a 2nd, 3rd, 4th, 5th location, you should make sure that you are getting paid. You need to be getting paid. Again, if you’re not working with a group that is consistently giving you that information, reviewing those on a regular basis, and making sure that you’re actually getting paid. Austin shared that example of that group that was not getting their management fee, eleven percent, pretty healthy and management fee.

All of a sudden, it was like, “No, we’re going to make sure that gets paid first and we’re going to actually do it on a weekly basis instead of a monthly basis because a lot of times they have more money left.” What happens? They start getting their management fee paid to them, which they, I’m sure, we’re like, there’s no way this is going to happen. Again, it’s designing it, taking action, getting in there on a regular basis, and really understanding and knowing your business and the financials around that. Anything else to add before we sign off here?

No, other than you have your financials at your disposal. You likely have a bookkeeper. Are you getting the most out of your bookkeeper? You need financials either to stay in compliance with your bank or your funding partner, and certainly to submit for tax purposes. The question that I ask is, are you getting the most out of those financials, or are you just getting them to stay in compliance and just to submit taxes?

Look, your financials need to be done one way or the other. Why not add that layer that speaks to you as a dentist and as a dental practice owner? I think the more that you take your financial seriously, I can almost guarantee you’ll see areas of improvement and you’ll find areas to open up your cashflow and you will be a little bit more stress free, anxiety free if you will, when it comes to your cashflow, the more involved you are in your financials.

A 100%. Again, it’s one of those things where you’re like, sometimes we tend to overcomplicate things. How can I be healthy? How do I lose weight? It’s like, it’s pretty simple. You just eat healthy. We tend to overcomplicate things a lot time. That’s the same thing here. It’s like one of our profitable practices, it boils down to these things that we’re talking about here. Austin, how can people reach out to you if they want to reach you? Number two is, do you guys do any like complimentary financial review or any reports that you have that people can hit you up for and get a copy of, like a dental KPI report or budgeting report, or anything like that?

Free Financial Analysis: Explore Growth Opportunities

Yeah, absolutely. There are a number of ways you can visit us on DSOCFO.com. An easy way to contact us is there. There’s also an opportunity to get updated benchmarks. You can see how your practice stacks up. Those average practice benchmarks. I’m pretty accessible via email. That’s AMoffat@dsocfo.com. That’s AMoffat@dsocfo.com. Pretty accessible there. Fairly responsive there. In terms of comp, look, we do free financial analysis.

We’re really big on that. We see it as an opportunity to A, introduce ourselves, and then B, let you know exactly where you stand, but in areas where you can improve on some stuff. That’s free. That’s complimentary. That’s something that we do often for a lot of people, and it’s an easy way to make an introduction. We absolutely offer those things.

Thanks for being on here, Austin. Thanks, everyone, for reading. I’d encourage you to reach out to Austin and get that complimentary financial review, or just even pick his brain on some of these best practices that we see working every single day in practice, and they work. Austin, thanks again for being on here. We’ll talk to you later.

Thanks.

Important Links

• Austin Moffat on LinkedIn
• DSO CFO
• AMoffat@dsocfo.com
• Jonathan Moffat
• Jonathan Moffat at LinkedIn
• Aligned Advisors

About Austin Moffat

Austin Moffat is a renowned expert in the dental accounting and fractional CFO sector, serving as the Managing Partner of DSO CFO, a specialized firm dedicated to providing comprehensive financial services to dentists, Dental Support Organizations (DSOs), and dental group practices. With a wealth of experience and a deep understanding of the financial intricacies unique to the dental industry, Austin has established himself as a pivotal figure in helping dental practices achieve sustainable growth and secure necessary funding.

In his role at DSO CFO, Austin leads a team of professionals who offer tailored financial solutions, ranging from bookkeeping and tax planning to strategic financial management and growth funding. His expertise extends to managing the financial complexities of multi-location dental practices and DSOs, ensuring they operate efficiently and profitably. Austin’s approach combines detailed financial analysis with strategic insights, enabling his clients to make informed decisions that drive their businesses forward.