Long before I was a dental consultant, I’d always assumed that new businesses failed because of changes in the market or unforeseen competition.
I also believed that budgeting and cutting expenses was something reserved for college students and strapped-for-cash families.
My assumptions were blown out of the water during graduate school, when I learned a surprising fact: most new businesses fail because the founders run out of money to live on, and cutting everyday expenses can dramatically increase the chances of success for a new business.
This information stayed with me through the years, largely due to my aspirations to start my own business.
As I grew closer to launching my own company, I took some drastic expense cutting measures to increase my chances of success as an entrepreneur.
I can’t say I was excited about this at first. It sounded about as fun as eating a big plate of stale bread.
Then came a surprise. I was shocked that cutting my household expenses ended up being an uplifting experience. More than uplifting, it super-charged me in business and in life.
What Does Cutting Household Expenses Have to Do with Dentistry?
The idea of cutting household costs to increase business success totally applies to dentists.
Why?
First, there’s the debt reality. Dentists go to school for a long time, and specialists even longer. Some (okay, most) end up with several hundred-thousand dollars of student loan debt when they graduate. Then they have to buy or start a practice, taking on even more debt.
Then, there’s the fact that dentists and orthodontists are in a special situation: they’re not only doctors, they’re also small business owners. (This in itself brings a unique set of challenges). Dental professionals most commonly struggle with keeping their business cash flow even. For example, overhead stays the same–team members’ salaries, rent/mortgage, capital equipment payments–but production and collections can vary drastically, making it challenging to manage money month-over-month.
Learning to live a little leaner could give you tremendous freedom and peace of mind through your business’s ups and downs. Going back to the point above, most dental practices experience high variability in cash flow month over month. If your personal household expenses are ship-shape and pared down, you don’t have to worry about bringing so much money home every month. Those lower cash flow months don’t keep you up at night. And the higher cash flow months give you the freedom to invest back in your business – maybe that intraoral camera system you’ve been wanting, or a redesign of your waiting room.
It also protects you against unexpected personal or business expenses. When your baseline expenses are under control, the unplanned costs of life are less scary.
Dentistry is a tough business. Dentists receive no business training, yet are tasked with running a huge overhead business, with high competition and a lot of uncertainty. Getting rid of those unnecessary household expenses can give you peace of mind in the very challenging business you’re running as a dentist.
There’s no shortage of dentists who are happy to live decently. There’s certainly nothing wrong with that! After all, as a dentist, you’re expected to make good money, and you want to enjoy the fruits of your education and training. The important thing, of course, is to make sure you really can afford all of the lifestyle enhancements you make.
Cutting Household Expenses to Benefit My Business: How I Did It
I’m not a dental professional, but like you, I am a small business owner – and by cutting my household expenses, my business has benefited.
Our professions may be different, but I bet out cost-cutting methods can be seriously similar.
Here’s how I did it.
I started by looking through my credit card bills and canceled any recurring services that I wasn’t actively using. Then I cut out expenses for things I could do myself like house cleaning and gardening. One of my favorite examples is the drinking water delivery that used to run us $80+/month – now we bring our 5-gallon bottles to fill at the store and they’re $1.50 each. I was astounded when I added up on a yearly basis how much after-tax money I saved, on stuff I didn’t really need and wouldn’t miss.
As a household, we achieved 70% reduction in monthly credit card bills alone!
Then I looked at my variable expenses like groceries and household essentials, and worked on shopping at less expensive places to see what I could save. I expected to be pining away for $4 kombucha, $200 spa treatments and never looking twice at a grocery bill –- but instead, I felt giddy every time I avoided spending money on non-essentials.
The main reason I found this so fun was that there was a purpose behind it. The best part about saving money–which doesn’t sound fun to most people–is that it was allowing me to realize my dream of owning a business. It’s hugely important to do something rewarding with the money you save.
That’s what makes it fun!
Spend on the Stuff that Matters
As a counterpoint to this: I know there is no greater joy that that moment when you realize your time is too valuable to clean your own house or mow your own lawn. And it’s a wonderful thing when your business is at that successful point.
But rarely do any of us go the other way and pare down our spending as we become more financially solvent. We just continue to add expenses without critically evaluating them, or examining if they’re truly adding value to our lives.
Most of the things I’ve cut won’t make it back into my life.
There are a few things I’ll stil gladly spend hard-earned money on: organic and sustainable food, health and wellness services, and travel.
But sorry to the monthly water delivery company -– I’ll be putting that money into the Biarritz fund!