How Are You Going To Deal With The Coming Storm?
“Winter brings cold dry harsh weather and trees are without leaves.”
-Lailah Gitty Akita
In 7 months, I’ll turn 50. I’ve worked as a business owner in dentistry since 1992 and had to hold my practice together after the tech crash of 2001 and the housing meltdown and subsequent “great recession” of 2008.
For many of you reading this, you’ve never owned a business through a recession. You’ve gotten out of school and started a practice during great times. The economy has been growing and the stock market rising and all the while your patients’ parents haven’t worried about their jobs or incomes like many do after major catastrophic financial events. So, the question I pose is: Are you ready for the next meltdown? It’s coming, sure as the sun rises in the east. As a matter of fact, we’re already overdue.
So, again, I’ll ask you what you’re doing to protect yourself when this time comes. Are you “just an orthodontist” who doesn’t think about the impact of economic cycles on your business life? Are you leveraged to the hilt having just stretched for a new home or a fancy car not having paid any attention to impending economic downturn? Have you stocked away cash to protect yourself? Have you minimized your overhead so that you can tack accordingly when it happens? How about your practice and student loans? Have you done anything to maximize cash flow? Secondary investments? How about hedging your investments?
As orthodontists, we tend to be very nearsighted and worry only about things like forces within our business; Clear aligners therapy provided by venture capitalists or new State Board rules. But most orthodontists are proud to not think like business magnates. We move teeth and focus on what we can control…or at least what we think we can control.
When the next recession hits, we know that discretionary spending will go down. It always does and for those of us who have practiced through these hard economic times, we can tell you that the world changes after each one. It’s impossible for me to truly relate how different our profession was before 2001.
But you’ve been working your practice(s) and watching your business grow over the last 5,6 or even 8 years. You figured that practice growth year over year is the norm. It isn’t. Trust any of us who’ve been out there for a while when we tell you that the recessions are what separate the real business owners from the posers who did well with little more than a smile and a great personality.
Should you be worried? Heck yeah. Was this meant as a wake up call? Yep.
Now go do something to protect yourself. Learn about the economy and spot the signs that things are changing. Set up your business to outlast the competition and be there long-term.
I don’t care what steps you take, but when the economic temperature drops and the markets, like snow, start to fall, I want to make sure that you have a cozy jacket and all the protection you can muster to withstand the first winter of your business life. There WILL always be a spring thaw, and getting there requires preparation.
By the way, this morning’s CNBC.com headline read: “US March auto sales indicate long boom cycle may be waning.”
Take cover because a storm is coming…
All the best,
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