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MailMarch 2020--Dental consultant John Meis, DDS, recommends dental practice owners talk with their landlords, lenders, and vendors to explain their financial situation during COVID and improve their terms.
Many dentists are struggling financially right now as the coronavirus spreads across the globe, shutting down most types of non-emergency dental care, and causing an unprecedented hardship for people who are now juggling dental practice closures, school closures, and stay-at-home directives. There are steps that dentists can take immediately to reduce costs by cutting some of their biggest expenses: rent, loans, credit card fees, and supplies.
Dentists Need to Check: How Fast Are You Burning Money?
We don’t know how long the coronavirus is going to impact the dental industry. Dentists need to reduce the burn rate, which is how fast they go through money each month.
Dentists have two types of costs:
- Variable Costs: The variable costs are things like the amount of supplies the dentist uses and the amount of advertising. If the dentist is performing fewer procedures, then the dentist will be using fewer supplies. If the dentist has hourly team members staying at home more, then the cost of payroll will be lower.
- Fixed Costs: Dentists usually think of fixed costs as fixed recurring expenses. These might include payroll, mortgage or rent, utility bills, bank loans, and credit card bills. You don’t usually think your fixed costs can be reduced, but maybe they can.
Request No Interest, No Payments and No Penalties
Try to reduce your “fixed costs” by requesting “COVID relief.” I recommend dentists call their landlords, lenders, and vendors to explain the temporary situation and request a 90-day deferment with no interest, no payments, and no penalties. You may not get that, but it’s a good place to start the negotiations.
It’s important to explain to the landlords, lenders, and vendors that this is a temporary situation and that you expect to return to normal services as soon as you are allowed. Explain the safety protocol and communication measures you have in place to continue engaging with your patients and attracting new ones. Explain that you are on the frontline of preventing infection and keeping patients out of the ER. Explain the other cost containment measures you are taking to demonstrate you are a good manager of your business.
Other businesses are making similar requests during the current pandemic, so you are not alone doing this and not setting a precedent. Many vendors and lenders are giving financial relief. Commercial landlords are facing the challenge of balancing revenue stream with maintaining business relationships and certainty of future financial security.
More Patient Prism COVID-19 Resources for Dentists
Dr. John Meis talks about additional ways to manage your finances when your dental office is closed or no longer predictable on the Patient Prism video:
Visit PatientPrism.com/Overview to find out how we can help your team convert more callers into booked appointments.
Patient Prism’s downloadable PDF guides to help dentists navigate COVID-19 include the following:
Free Checklist to schedule more patients!
