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A Bonus System for the Doctor!
[Click on image for Dr. Carlsen video on the Bonus System described below.]
We all know of staff bonus systems. Some of us find they work well; others loathe them.
But what about the doctor?
Let's give you docs a significant bonus too! Doesn't the boss deserve it? Some office bonus systems actually give the doc a portion of the "staff" bonus. This is much more, though, docs: a brand new paradigm. Don't you hate that word? How about "archetype," or maybe "model"?
Whether your office has a staff bonus in place or not, employ this system immediately. The staff bonus system does not supersede this system.
The setup is quite simple and works off the practice checkbook. Set a BAM, "baseline account minimum" for those with weak ears, for the checkbook---an amount you don't feel comfortable going below, say $5,000, $10,000, or $20,000.
Look at the checkbook balance at the low checkbook point of your monthly bill-paying cycle. This is usually at the end of the month or beginning, depending on payroll payments. This is after all payments, including the doctor's draw or salary and all retirement and benefit funding is done. If your balance is over that BAM, you, the doctor, receive 20% of the difference between the balance and the BAM. That's it.
If your BAM is $5,000 and you find $7,000 at the low point, you get 20% of $2,000 or $400. If it's $10,000, you get $1,000. Why 20%? That way you won't endanger the following month's checkbook balance.
What if the balance is below BAM? Do I give back 20%? No! You wait until the balance goes over BAM again and then take your 20%. A stable, growing practice should have the checkbook gradually increasing in value. If it isn't, take a close look at two articles of mine that can be found by clicking
Five-Minute Financial Monitor 1 and
Five-Minute Financial Monitor 2.
How does one spend the 20% above BAM? Any way you want! This is reward money; you may buy a watch or take a trip. I tell docs to spend it immediately, as the more personal celebrations you have, the more positive your work attitude will be. Some let in build over a few months to buy a cruise or something special. Others keep up with the latest Apple gizmos with this "spare change."
If your low checking point continues to increase above your BAM for three consecutive months, take your bonus, then "reset" your checking balance back to the original BAM by making out a check to yourself.
Example: Your BAM starts at $5,000 and after three months your checkbook is up to $10,000, after giving yourself three bonuses. To continue to take 20% of an increasing amount provides too high a bonus and it must be reset. Make out a the check to bring your checking account back to $5,000. And what does the prudent doctor do with that extra amount, in this case $5,000? Take that trip or buy that watch? NO! Put it into you cash retirement account or college fund! This is a major key to wealth guys. Treat yourself, yet don't get carried away.
This is easy to initiate docs! If you have emotional trouble getting past your financial Dominatrix at the front desk, sneak into the office at night and write your own check. Remember those days? Then, when Diva Donna asks you why you did it, blame it on your spouse, or me.
To access additional Carlsen Dentaltown Magazine articles, click on the image below.
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