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You know what doesn’t make sense? Putting time and effort into creating a budget that doesn’t actually help you run your practice better and reach the goals you have for your business. I see way too many practice owners going through the motions of making a budget, without a full understanding of how their budget can work for them. (I also hear from practice owners who don’t create budgets at all.)
I get it. Budgeting can be a stressful process. It’s not always easy to look closely at the nitty-gritty financial reality of your business, and to think about the future. Financial issues and uncertain futures stir up fear and anxiety for a lot of us. But avoiding those issues won’t improve your practice’s financial health, or get you any closer to your goals. Planning and budgeting will.
It’s time to start thinking about budgeting differently. The fundamentals of good budget-building are the same: plan for cycles of demand, factor in contingencies for surprises and unknowns, work with specific-to-your practice data. Alongside them, every practice owner can create a budget that’s truly connected to your most important work, to seeding new goals, to growing your practice. No matter where you are in your practice today, you can do that. The questions below can help you get there.
The result? A budget process that clarifies, empowers, focuses, and prioritizes. A finished budget that functions a flexible, adjustable roadmap for enacting your business goals throughout the coming year. A relevant, dynamic, strategic document that you’ll engage with all year long, to help move your practice forward, energize your team, and make the very best use of your time.
So without further adieu, here are the five questions you should ask yourself when putting together your budget:
1. Do I know what a budget is, and how I will use it?
Be honest with yourself. Do you know how you want a budget to work for you? The first step in making your budget work for your individual needs and circumstances is to understand how you intend use it throughout the year. Is it a harness to keep you from spending money, or a guide to give direction about where money is most strategically spent? Those are two very different budgets. Going through the motions of allocating money without connecting to a deeper purpose isn’t worth it. Take control. You are in charge of your budget, it’s not in charge of you.
2. How well does my budget reflect my practice vision?
It’s time to stop thinking of budget as an obligation, or a test you’re afraid to fail. Think of it as a reflection of priorities for the coming year, and an outgrowth of the strategic vision you’re developing for your practice.
Every budget will reflect the basics, such as payroll and overhead costs. What else should be reflected in your budget for the coming year? Learning and mentorship opportunities for yourself and professional development for your team? Marketing and network-building to help you reach a larger and more targeted group of new patients, and develop collaborations with new referral partners? Hear me: this is not about spending wildly. Just the opposite. It is about allocating resources where they can deliver the biggest return and do the most good for your business and your life.
3. Am I budgeting for my time?
Not nearly enough practice owners do this. Some owners don’t include their own salary or draw in their business’s annual budget. Most of the ones that do wind up working way more than what they’re paying themselves for, with no sense of where their valuable time is going.
The point here isn’t to budget for endless hours. It’s to actually strive work in your business within the hours you’re paying yourself, and to be intentional about using the rest of your time to its best advantage to work on your business. There’s no better way to focus on your most important activities, and let the other stuff go. If you’re treating patients, I often recommend owners pay themselves for only time they spend treating. That’s an excellent starting point from which to grow your business without increasing your own treating hours. By delegating, you rely on your team to conduct day-to-day business without you. You focus on the big picture, and the growth you want to achieve.
4. Am I willing to share this budget with my staff?
How much does your staff contribute to the budget process? How familiar are they with the end product? Transparency in budgeting—as in so many other aspects of practice management—can be a powerful leadership and management tool. Don’t build a budget behind closed doors. Bring your staff in on the process. You’ll get valuable input and a helpful reality-check from the people who are doing the on-the-ground work in your practice. You’ll energize your team to think more about ways to run your business with greater efficiency. Transparency and inclusion in budgeting is a way to increase your team’s all-important buy in on your mission—and the incremental steps you take to achieve it.
5. Is fear holding me back?
Last question here, but this is actually where you need to start. Take a deep breath, and really ask yourself this question.
I mean it. Go ahead. I’ll wait.
There’s so much emotion wrapped up in finances. These fears may present differently from one person to the next—but we all grapple with some version. To transform how you budget and plan for your practice, start by acknowledging the emotional triggers that exist for you around money. Spell them out: tell a trusted friend, a therapist, a mentor or a coach. This simple acknowledgment can help you start to drain these fears of their power, and put the control where it belongs: back in your hands. A fearful mindset will color how you approach the budget process, and will shape the final product. It will be less useful: you’ll be less likely to want to engage with it, it won’t reflect your true goals and priorities. You’ll end up a roadmap made to avoid failure, instead of one designed to move you toward success, prosperity, and freedom.
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Join me for the Practice Transformation Winter Workshop
Setting a budget that works for your practice’s goals is only scratching the surface on your full practice potential. Ready to go deeper?
I invite you to join me for the Practice Transformation Winter Workshop in Gaithersburg, MD over an accelerated 2-day period from December 12th – December 13th. This immersive, hands-on workshop will cover topics around marketing, time management, revenue generation and will provide you with the tools needed to delegate, automate and grow your practice!
Click here to learn more.