Don’t be a silly dead sheep
Don’t be a silly dead sheep
You are unlikely to survive commercially if you reopen your business blind

In 2005 the BBC reported that Turkish shepherds watched in horror as hundreds of their sheep followed each other over a cliff. First one sheep went over the cliff edge, only to be followed by the whole flock of 1,500. Amazingly only 400 sheep died in the 15-metre fall — their bodies cushioning the others who followed. Perhaps we are about to see something similar in dentistry.

You don’t need me to tell you that silly things have been happening all over the place in response to Covid-19. In the dental sector there has been plenty of wind about if and when practices should reopen, which ‘authority’ gets to decide, and a breathtaking lack of trust in dental clinicians to manage cross infection; all while patient care has reached appalling levels, with little more than emergency extractions available to the public. Some lapses in common sense that cause suffering and waste can be forgiven in a crisis but there has to be a limit.

Talk of reopening has kicked me, psychologically, into the recovery stage. We did a lot of work putting practices on ice, which was fairly straightforward because it’s working with tangibles to reduce expenses. Now we’re moving into an unknown period in which practices are preparing to reopen but they don’t know when or what it will look like when they do. A key unknown is what the demand for high value treatments will be. Somewhat known is the increased cost base because of PPE requirements, which are expensive in time and material, although we’re not sure how expensive yet. The notion of one patient per hour has been thrown around, which would significantly impact all practice and, make many unviable. As a response people are talking about extending their opening hours in order to keep volume as high as possible.

In the face of unknowns it’s human nature to procrastinate, live in denial and cleave to the logic of the old, known world. Comforting though that bubble is, survivors pop it and draw a line in the sand. To avoid paralysis they make some assumptions in order to hang a plan on. At this stage the only thing worse than making incorrect assumptions and decisions is making no decisions. Not easy if, like me, you crave empirical data (which dentists do just as much as accountants). Nevertheless my training and experience is about making sense out of chaos. Certainly in this situation there is a lot going on, one major headache being when to bring people back and how to pay them, but the main focus must be cashflow. If you reopen in style only to see your revenue on month two stuck at 60% of pre-Covid levels, your business is over.

To model such hypotheses visually we created a post-Covid cashflow forecast template that allows you to play around with unknowns and see how long you get, in various versions of reality, before your business snuffs it. You can see what happens if, say, you extend your opening hours by 40%, double expenditure on PPE, and revenue dips to 80% or 60% of pre-Covid levels. I should warn you, it’s unpalatable. But it affords you some sense of what you will have to do to make it work and in what kind of timeframe, which should indicate what you can start doing now to that end. For example you could start filling the diary with video consultations a month in advance so you have clarity around what your revenue will be.

You are unlikely to survive commercially if you reopen your business blind. Our post-Covid cashflow forecast is a tool designed to support you by making this reality impossible to ignore. We feel it’s our duty to spur you into action now, before it’s too late. The tool is free to use, just email for a copy. You can have us review it with you for a discounted fee, or you can have us provide our usual in depth service and collaborate with you to help you get prepared for what lies ahead. Give me a call for chat on 07557 780225 if it’s either of the latter.

The information contained in this article is based on the opinion of Hive Business and does not constitute formal tax advice. Any tax outcomes will be based on individual circumstances, tax legislation and regulation, which are subject to change in the future. You should seek specific advice before embarking on any course of action. Hive Business does not provide regulated Financial Advice, including advice on investment, insurance or lending products or their suitability for you. This article is provided for information only and does not constitute, and should not be interpreted as, investment advice or a recommendation to buy, sell or otherwise transact, or not transact, in any investment including Bitcoin and other crypto. Any use you wish to make of any information contained within this article is, therefore, entirely at your own risk.

By Hayley Robins Senior Accountant
If you have any questions or comments about this article, please get in touch.
Call Now Button