The Need To Create Cash!

In a recent blog, I wrote that COVID-19 had seen many of us dropping down Maslow’s hierarchy of needs.

Abraham Maslow was an American psychologist who developed a now well-accepted theory that our psychological health is predicated on fulfilling innate human needs in priority order or steps, culminating in self-actualisation.

Maslow portrayed human needs in the shape of a pyramid, with the most fundamental levels of needs at the bottom. Of course, most of the world’s population find themselves at the bottom levels. In order for you to arise to the next level, each previous level’s needs must be first satisfied.

As you can see in Figure 1, prior to COVID-19, you were likely to have been functioning from psychological and self-fulfillment needs. You were working in a stable job with regular income to ensure you maintain your shelter and food supply. You took for granted that your basic needs of survival were satisfied for the foreseeable future. This allowed you to live life focusing on your relationships, your career and achieving your full potential.

However, the impact of society’s response to COVID-19 shifted your needs from these psychological and self-actualisation needs to the more basic physiological and safety needs.

As individuals and as a society we found ourselves in the unfamiliar situation of trying to re-establish a stability in our lives that we have long taken for granted.

Such is also true with your dental practice.

In his latest book, Fix This Next, author Mike Michalowicz represents the needs of your business in a hierarchy of needs much like Maslow’s pyramid for psychological needs.

You will see in Figure 2 that the most basic need of a business is SALES. That is the creation of cash. 

We have all seen businesses that suffer from bad leadership, bad systems or bad customer service yet they still remain operating year after year. And that’s because they are creating cash.

Once your business has satisfied the need of SALES, it can then strive for PROFIT. Profit does not mean the business is making so much money that the owner spends the day throwing around wads of cash. What profit allows the business to do is achieve stability. You are paying out your debt. You can buy a piece of equipment if you need it. Lending institutions will happily fund your growth.

After PROFIT comes ORDER. This is the creation of efficiency. Your business has satisfied this need when it can continue to function and grow without being solely dependent on the owner.

Next comes IMPACT, the creation of transformation. This is when your business has a transformational impact on your customers. In an interview I listened to, Mike used the example of Harley Davidson motorcycles. When you buy a Harley, you don’t simply buy a motorcycle. You buy into a tribe. Impact is when your customers don’t just see you as a service, but as something that impacts their lives.

At the top of the Hierarchy of Business Needs is LEGACY. Legacy is the creation of permanence, that your business impact will live on long after you have gone. Think of Steve Jobs and Apple, as an example.

Dental practice restrictions have now been lifted to level 1. Just as teams found themselves psychologically at the base needs of Maslow’s Hierarchy of Needs, so too have dental practices found themselves at the base needs of Michalowicz’s Business Hierarchy of Needs. Sales.

Now is a time to reestablish the foundations of your practice. Do what you can within the Government, health authority and dental associations guidelines to drive the creation of cash back into your practice. You cannot move up the levels until you do. The longer you wait, the more vulnerable you are.

YOUR TO-DO LIST

Above all, be happy and optimistic, and passionate about what you are choosing to do. It can only get better from here!

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