575: How to Calculate Your Overhead in 60 Seconds - Dr. Barrett Straub - a podcast by ACT Dental

How to Calculate Your Overhead in 60 Seconds

Episode #575 with Kirk Behrendt & Dr. Barrett Straub

If you're going to own a business, you've got to do some math! Overhead is one of the most important numbers that dentists should know, yet it’s the most neglected. To prove how uncomplicated it truly is, Kirk Behrendt brings back Dr. Barrett Straub, ACT’s CEO, to help you calculate your overhead in under 60 seconds. With ACT’s Roadmap to Practice Profitability, you can start thinking better and making the changes you need to improve your overhead. To learn where to access this free resource and start using it today, listen to Episode 575 of The Best Practices Show!

Episode Resources:

• Dr. Straub’s email: barrett@actdental.com 
• Dr. Straub’s Facebook: https://www.facebook.com/barrett.d.straub
• Dr. Straub’s social media: @bstraub10
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Links Mentioned in This Episode:

ACT’s Roadmap to Practice Profitability: https://www.actdental.com/free-resources/money-tool

Main Takeaways:

Overhead isn't as complicated as you think.

Understand why you need to know your overhead.

Learn how to track, control, and lower your overhead.

Give yourself grace. Make small changes and improvements.

Quotes:

“Overhead is going up. Costs are going up. And so, the problem or the challenge with overhead is multifactorial. One is, it’s going higher, and it’s harder and harder to keep that profit margin. Number two, we, in dentistry, have made overhead overly complex — way more complex than it has to be. And the outcome of that complexity, I believe, is many dentists, maybe most dentists, don't even track it.” (2:28—2:58) -Dr. Straub

“The complexity is coming from what we call buckets. What bucket does each expenditure go in, whether it’s team compensation, facility, supplies, lab, or operating costs? And us detail-oriented dentists, we get too into the details, and we worry so much about, ‘Am I putting this expense in the right bucket?’ that we eventually throw up our hands, wait for our accountant to tell us whether we’re doing okay or not, and move on. And that, ultimately, is not the right way to run a business.” (3:11—3:45) -Dr. Straub

“Overhead is a percentage of collections, not production, number one. Overhead has zero to do with production. Now, you could say that, ‘Well, your collection is a factor of your production.’ Absolutely. But it is a percentage of your collections. And you're right, we’ve been talking a lot about this, this push to produce, produce, produce. We like it when dentists produce more. But we want them to produce more when they have the gap set...

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