3 Steps for Managing Risk in Your Dental Practice|
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At a glance:
- The main takeaway: Building a thorough risk management plan could be the key to taking your dental practice to the next level.
- Not all risk is bad risk: Only unmanaged risk threatens the growth and stability of your practice, while calculated risk with appropriate planning can create great opportunities.
- Next steps: Dental practices need to complete a risk assessment and generate a risk management plan. We’ve outlined three steps below to help you get started.
Don’t let unmanaged risk be the downfall of your practice. Schedule a no-obligation risk management consultation with Aprio’s Enterprise Risk Management Team.
The full story:
Most dental practice owners think of risk as something inherently bad, but it’s time to consider a different perspective. Risk is only bad for your practice when it is unmanaged. While unknown and unplanned-for risks can be dangerous, calculated risk creates the opportunity for growth and change.
The difference between good risk and damaging risk primarily relies on a thorough risk management plan. Keep reading to learn more about risk management and the three steps your practice should take next.
At Aprio, we like to define risk as anything that keeps you from achieving your business objectives. When you view risk from this perspective, then risk management is simply creating a business strategy to identify and prepare for those risks.
Effective risk management begins with a thorough risk assessment, which requires analyzing all aspects of your business and categorizing potential risks into one of these five categories:
Most dental practices will find the majority of their risks fall into the financial and operational categories. For instance, if you don’t have robust financial data, lack controls around cash management, or haven’t enhanced your cybersecurity plan recently, then you may have a high degree of financial risk that needs immediate attention. Likewise, inadequately trained or understaffed front desk and back-office operations could leave your practice more vulnerable to operational risk.
Risk management in three Steps
While every dental practice faces unique challenges requiring an equally unique risk management approach, the following three steps provide a universal starting point that all practices should consider.
- Perform an annual risk assessment – This line is worth repeating: effective risk management begins with a thorough risk assessment. The best way to achieve a thorough risk assessment is to call in the experts. Team up with experienced risk advisors who can establish an annual assessment and provide expert insights.
- Create financial controls – Assessing financial risk will be critical for dental practices, but identifying those risks is only the first step. Effectively mitigate and manage the risk by building out appropriate controls and then putting in the necessary structure and support to make them successful. Expert help from a knowledgeable financial advisor will be critical for this step, as well.
- Develop an exit strategy – Failing to establish an exit strategy is the fastest way to undo all of your careful risk management from the first two steps above. If you decide to sell, retire, or otherwise transition out of your practice, having an exit strategy in place can help ensure you get the maximum value without the unnecessary risk. Once again, make sure you call on the right experts, such as Certified Exit Planning Advisor (CEPA), to make your strategy as successful as possible.
As I emphasized above, each of these steps requires assistance from an experienced, multidisciplinary team of advisors. As a dental practice leader, you can’t be an expert on every aspect of your practice’s operations; however, you can surround yourself with a team of experts to make each of these decisions easier.
Aprio’s Enterprise Risk Management team, led by David Recchion, MBA, CEPA, can be your practice’s key to successful risk management. Our risk management team works closely with our National Dental Practice to provide comprehensive advisory services with deep industry expertise. We can help you accomplish all three of the steps outlined above and more, so your practice can focus on what’s next. Contact us today to start your practice’s risk assessment.