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865: Metric Mondays: How Many Days Do You Work for Free? – Dr. Barrett Straub

How many days do you work for free? You're probably thinking, “I don't!” But you may be shocked after doing the math. In this episode of Metric Mondays, Kirk Behrendt brings back Dr. Barrett Straub, ACT’s CEO, to break down a new important KPI: days worked for free. They explain why it happens, how to calculate this number, and what you can do after knowing the data. Stop working too many days for too little money! To learn how, listen to Episode 865 of The Best Practices Show!

Learn More About Dr. Straub:

Learn More About ACT Dental:

More Helpful Links for a Better Practice & a Better Life:

Episode Resources:

Main Takeaways:

  • Time is the new rich. Control over time is more valuable than money.
  • To start collecting revenue, you need to work fewer days for free.
  • Learn how to calculate the number of days you worked for free.
  • Figure out how many days you are willing to work for free.
  • Work requires energy and effort. Don't do it for no pay!

Quotes:

“[Days worked for free] is a legitimate metric you need to understand. As write-offs will continue in dentistry, there's a certain number of days where you get up, you drive to work, you employ everybody, you accumulate costs, you see patients all day long, and you exhaust yourself — and it was all for free.” (2:18—2:44) -Kirk

“[Days worked for free is] basically the number of days that you work for free in order to afford your write-offs. So, let me put it another way. It's a very tangible way to look at the amount of write-offs you grant due to your PPOs, due to your elective write-offs, and due to your membership discounts. The fewer days you work for free, the sooner you can start collecting revenue.” (2:54—3:19) -Dr. Straub

“What we're talking about is, again, we're back to this financial story. We're back to gross production. You produce X amount of dentistry every day. You have a gross production, and you worked X amount of days. So, our number one equation is, how many days is your office open, times how much did you produce each day? That's your gross production. Now, the next question is, how many days into the year was it before you could start earning revenue? You'll be surprised how many days many of us are working for free.” (3:20—3:53) -Dr. Straub

“If your effort gap is 37%, now I want you to not just say, ‘Well, 37% of my time.’ How many days did you work? So, if we work 200 days a year and our write-off is 30%, that's 60 days. Now, let's put it in a different way. Let's say we have a practice that's producing $1.2 million a year, and they have 37% write-offs. That means that of that 37% of $1.2 million is $444,000. This is fourth grade math, but it helps put it into a tangible perspective for us. They worked 200 days, so that's $6,000 a day. So, every day they go in that practice, every day the door is unlocked, that practice produces $6,000 a day. They work 200 days. That's $1.2 million of gross production. So, now the question is, how many $6,000 days did it take for us to afford our 37% or $400,000 write-offs? It's 74 days.” (4:52—6:00) -Dr. Straub

“If you're writing off $444,000 on $1. 2 million, I guarantee you you're not collecting 100% of your net production. There's something else going on. And your net collections is probably at 95%, 94%, which adds a few days to that. Now, don't get angry. We always start with the truth of where these are. Here's the point of this: every single adjustment we make adds one more dollar and lessens the amount of days we work for free. We actually are starting to get paid for what we're doing in there.” (6:17—6:53) -Kirk

“It takes energy to work. It takes effort. So, how many days are we working for free due to our write-offs? And I love that you said that, adding on due to our collection's gap or lack thereof. So, if we're anywhere lower than 100%, we're going to do the math and say, ‘If I were at 100%, I'm only at 95%. Five percent is X amount of money. I know I produce $6,000 a day, so that was six more days. We worked a whole week more just because we didn't collect our net production.’ When we add these together, you get a number. You either feel pretty good about that number, or you feel awful about that number. So, if we're at 74, 80 days, we're months, and months, and months — we're a third or even almost half of the year before we can even start paying our overhead. Now, obviously, you're collecting money. This isn't linear. But you get the model here. Now, we work a bunch of days to pay our overhead. Hopefully, there's a couple of days left in the year, doctor, where you get to pay yourself. So, we can start to see, basically, what financial gaps modeling is doing for us and our clients, is showing different ways to evaluate and improve your profit margin. And the number of days working for free is a very emotional, tangible way to evaluate your profit margin and say, ‘I'm good with that,’ or, ‘I'm not.’” (7:01—8:23) -Dr. Straub

“Time is the new rich. I don't care what people make. It doesn't matter. I think dentists that have the ability to control their time are the richest people in the world. When you don't have the ability to control your time, you feel helpless, and your only answer is, ‘I'm just going to work more days to cover that.’ If you have children, you only get 16 summers with them. It's all you get. You get more than that, but 16 that matter that determines what happens in the next 16, and the next 16 after that. You don't want to spend more days away from the things that matter. You became a dentist so that you could pick and choose how you wanted to practice. That's why knowing this number is so important.” (9:12—10:00) -Kirk

Snippets:

0:00 Introduction.

1:59 How many days are you working for free?

2:45 Days worked for free, explained.

3:54 The simple math.

9:01 Last thoughts.

12:33 Why you need to join the BPA.

Dr. Barrett Straub Bio:

Dr. Barrett Straub practices general and sedation dentistry in Port Washington, Wisconsin. He has worked hard to develop his practice into a top-performing, fee-for-service practice that focuses on improving the lives of patients through dentistry.

A graduate of Marquette Dental School, Dr. Straub’s advanced training and CE includes work at the Spear Institute, LVI, DOCS, and as a member of the Milwaukee Study Club. He is a past member of the Wisconsin Dental Association Board of Trustees and was awarded the Marquette Dental School 2017 Young Alumnus of the Year. As a former ACT coaching client that experienced first-hand the transformation that coaching can provide, he is passionate about helping other dentists create the practice they’ve always wanted.

Dr. Straub loves to hunt, golf, and spend winter on the ice, curling. He is married to Katie, with two daughters, Abby and Elizabeth.
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