I often think understanding finances can be a little like reading sheet music. For the record, I can’t read music, and I doubt I’d be able to learn – I can look at it and appreciate its strange beauty, but as a collection of lines, dots, and interconnected lines and dots (apologies, musicians) it means absolutely nothing to me.
Like music, business finances exist within a complex, coded, and often confusing, system that’s all very well if you’re “in the club” but alienating if you’re not. However, unlike music, understanding finances is crucial for our future success. If I never learn to play Chopsticks on the piano, my life will be fine. It might bring me a small amount of joy, but its lack will do no harm. If, as a practice owner, you’re never confident in understanding things like profit and loss (P&L), your business will certainly be poorer.
This matters because as an owner, there’s never been a more important time to get a handle on your finances. Less than ten years ago, we could reasonably estimate that it cost £550 to open a private dental surgery for the day. Post-Covid, this rose to around £600. Now, it’s around £650 per surgery, per day. Clearly, costs are rising, and while this could feel demoralising, it can also be motivating. When we carry out a practice analysis, it’s an inspiring process; it’s always a positive step to see the true lay of the land. When we know and understand our financial position, we can act on it.
But it’s this level of understanding that trips people up. Among our clients, we find many that feel they should understand their numbers, but for whatever reason, simply don’t. In this, there’s an element of that old enemy: imposter syndrome. None of us likes to acknowledge what we see as a weakness, so we soldier on, not admitting that it’s all like sheet music to me. After all (that inner voice says), I know and use numbers, so I should be able to do this, right? However, recognising numbers, and even knowing what those numbers mean when they’re structured as profit and loss, doesn’t mean that you really know how to use them. The lexicon is the same, but there’s a long journey in the middle that’s missing.
And even if you’re someone that does understand how to read P&L, there’s so much more to the financial field than this. There’s the real-world application of this understanding, along with discussions about price elasticity, margins, overheads, tax, and on, and on… This is complex enough, before we even consider that the economic environment itself is constantly changing.
For this reason, unlike a skill you can either learn or not learn, financial literacy is an ability that grows by degrees; from being an absolute beginner to having the kind of tax and accountancy expertise that many of our team members share. You may know more or less than you think, but the heartening thing to bear in mind is that we’re always here as a backstop.
If contemplating your figures leaves you in a cold sweat, you’re really not alone. To us, client confidentiality is paramount, so if you pick up the phone to speak to us, we’ll be entirely focused on helping you. You might have a good grounding knowledge that you’d like to advance, or you might know nothing at all; it doesn’t matter. The main thing is to pick up the phone and learn from there. We’re so confident we can help you, at your level, that we even offer a money-back guarantee. So, just give us a call to find out what we can do.
