How to Best Utilize Your PPP Loan

Congratulations if you received either your PPP 7(a) loan or notification from your lender that you will receive those funds soon. Now you need to figure out how to make the best use of this forgivable loan.

Please remember that the primary purpose of the PPP loan is to provide money to small businesses to retain their staffs. Pay out 100% of the amount of the loan over 8 weeks with at least 75% being spent on payroll costs and the rest for certain facility costs and the full amount of the loan will be forgiven. Even if you don’t pay out the full 75% for payroll costs you should still qualify for a portion of the loan to be forgiven.

The challenge for many small medical and dental practices is that most practices shut down and immediately furloughed their staff and the owners mid-March upon being told to stop treating patients. How should the PPP funds best be utilized when your staff is not currently employed at your office and you probably won?t reopen your practice until mid-May or later?

Still Employing Your Staff?

Your decision is easy if you continue to maintain your full staff even if your office is closed or working at a reduced schedule. You will use the PPP funds to pay your staff, rent and utilities over the next 8 weeks, at which time the loan should be forgiven. The government will, therefore, subsidize the staff and facility costs of your practice over the next two months. Make sure that your staff count and payroll costs don?t dip by 25% during this period of time.

No PPP For You

If you didn?t apply for the PPP or weren?t approved and don?t plan to apply again later, then please make sure to contact your payroll provider. They will help you take full advantage of the $5k per Retained Employee tax credit by having you not remit your federal payroll tax deposit each pay period. Doing so will help you recoup the full tax credit very quickly. You also have the option of holding onto the 6.2% Employer Social Security match and repaying those deferred taxes ratably over the next two years.

PPP Basics

Below are the basics of the PPP loan. (The PPP guidelines are still very fluid. The info below is based on our understanding of the rules as they currently apply. If there are any errors, please let us know ASAP.)

What if you do NOT rehire your staff?

  1. Every week your state will continue to pay your staff their regular state unemployment benefit plus an extra $600 from the federal government.
  2. The government will also pay your unemployment benefit of your state’s benefit plus $600 from the federal government per week.
  3. The full amount of PPP funds remains available for when you reopen your practice but won?t be forgiven and, instead, will be treated as a loan to be repaid over 24 months at 1% interest.

What if you rehire your staff very soon?

  1. You will use the PPP funds to pay your staff?s payroll costs.
  2. You will also use the PPP funds to pay yourself up to $1,923 per week ($100,000 max divided by 52 weeks).
  3. The PPP funds can be used to pay your rent and utilities, including phone and internet. (On the contrary, unemployment will not pay your facility costs under any circumstances.)
  4. As long as you spend the full amount of the PPP money over 8 weeks, with at least 75% for staff payroll costs and the rest on rent and utilities, the full loan will be forgiven. (Partial forgiveness looks to also be allowed based on staff counts and salaries paid during the 8 weeks following when you get the loan.)
  5. The PPP funds could be completely spent by the end of 8 weeks, no matter when you reopen.
  6. It appears the forgiven loan won?t be taxable to you as Cancellation of Debt which might give you an extra financial boost by letting you claim these expenses without picking up any income.

What should you do?

Which path you take depends on how quickly you think you?ll be able to reopen your practice. The sooner you can reopen, the more you want to rehire your staff within the next week or so and begin paying everyone once again. Practices paying high rent might also want to rehire their staff soon as a way for the government to subsidize their facility costs over the next two months through the PPP.

Let?s say you reopen on 5/18. The PPP money would pay you and your staff for two weeks while being idle, and then would continue to pay your practice salaries for the first six weeks you are open. The loan would also pay your next two months? rent and utilities. That should hopefully give you time to build up your practice A/R and cash flow again. At the end of 8 weeks, the PPP would be fully forgiven.

What if you can?t reopen until 6/15? If you hire back your staff next week, you would use the PPP to pay their salaries, your salary (up to $1,923 per week) and your rent and utilities. When you open on 6/15, there would be 25% or less of the PPP funds remaining to help you get your office up and running again. Would you have been better off keeping your staff and yourself on unemployment for those 6 weeks and then have the full amount of the PPP loan available to jumpstart your practice when you finally reopen even though that loan will no longer be forgiven? Remember, unemployment benefits paid by the government are comparable to salaries paid with a loan forgiven by the SBA. Both are ?non-loan? money.

The Wildcard

Many national and state medical and dental societies are pushing Congress to allow practice owners to delay the 8-week period to determine loan forgiveness. If this option passes, then practice owners who don?t immediately rehire their staff and instead save the funds to use upon reopening their practices could fare best. No one is sure of the likelihood of something like that being enacted, however.


“Million Dollar Metrics” for General Dentists

Managing a practice requires that you look at “the numbers” on a regular basis. If you’re like most practicing Doctors, you probably try to glance at the production and collections figures at least monthly. Did you know that there are a lot of other performance metrics that can help you gauge how your practice is performing?

Figuring out which metrics are meaningful is one challenge. The problem is that calculating those metrics and then looking at those performance indicators in a vacuum doesn’t provide you with much insight at all. For that reason, calculating various performance metrics will be much more valuable to you if you can compare your practice’s metrics to your peer group.

My CPA firm currently provides tax, accounting, payroll, and basic practice management services to more than 130 dental practices. This past winter, we collected practice management data from many of our practice clients and used that data to calculate the following ten meaningful performance metrics for general dentists for 2012:

  • Number of Active Patients (Defined as an individuals?treated at least once during the prior twelve months)
  • Collections per Active Patient
  • Collections per Doctor Hour
  • Collections per Procedure
  • Number of Procedures per Active Patient
  • Number of Non-Diagnostic and Non-Preventive Procedures per Active Patient
  • Re-Care Efficiency (Defined as the percentage of Active?Patients who came in for two exams during the year)
  • Number of New Patients brought in during the last year
  • Percent of New Patients to Active Patients
  • Percent of Adjustments and Write-Offs to Gross Production

Please note that even though the data was collected mostly from practices in the Greater Boston area, I feel that most of these metrics are relevant to practices located within all 50 states.

To make these metrics even more meaningful, we calculated each performance metric based on the data collected from all the participating practices, and then re-calculated them based on the practices that collected $1 million dollars or more during 2012. It’s very interesting to see how the performance metrics for the total sample compare with the same metrics calculated from just the million dollar practices.

An part of our analysis, we also created a graph that we call our “Internal Marketing Matrix”. This graph plots Re-Care Efficiency on the x-axis versus New Patient Percentage on the y-axis for each of the participating practices. Depending on your practice metrics and where you fall on this graph, you’ll either be apolitician, engineer, neophyte, or “dentist-preneur”.

To learn more about these ten metrics and the four quadrants of our Internal Marketing Matrix, and to find out how your general dental practice compares against the average practice and the “million dollar” practice, please watch this 13-minute recorded PowerPoint Presentation on Million Dollar Metrics for General Dentists?or watch below:

If you’re practicing in the Greater Boston area and would?like to set up a time for my firm to help you figure out these metrics for your practice, please do not hesitate to e-mail me that request.? We’d really appreciate the opportunity to help you gain some insight on the performance metrics for your practice.


Whether you have your own practice, are a partner in a large group practice, work at a large company such as a hospital or research center, or are not even a health care professional, maximizing your “internal marketing” is a must. So agrees Fred Joyal, co-founder of 1-800dentist, in his book Everything is Marketing: The Ultimate Strategy for Dental Practice Growth.

Fred’s basic premise is quite simple. “Patients can?t assess quality of care, but they can assess their own experience.” Think about your own experience when going to a dentist or physician, having your taxes done, meeting with an attorney, or getting your car fixed. Don’t you just automatically assume the person is proficient in their profession or trade?

Fred starts his book on marketing for dentists by talking about the difference between a satisfied customer and aloyal customer. ?A satisfied customer got what they expected. A loyal customer experienced something unexpected.? Fred goes on to explain that while a satisfied patient will keep coming back to your practice, only a loyal patient routinely refers their family members, friends and co-workers to you and your practice.

Think about the professionals you regularly recommend to people. And then think about those you wouldn’t recommend to your arch enemy in a million years. Fred is right. It’s all about the experience, right?

Please keep in mind that the patient experience isn’t limited to when he or she is “sitting in the chair”. The experience starts when the person researches which Doctor to call and then books an appointment, continues through the pre-appointment correspondence, followed by being greeted at your office by your front desk staff, and ends with the follow up information and/or phone call, paying the bill, and responding to your patient survey. Is your operation set up to maximize the patient experience at each and every step of the process?

My Patient Experience

I recently had a simple procedure at a local outpatient clinic. Prior to the procedure, the GI practice sent me a copy of instructions to follow the day prior to the procedure. The copies looked as though they were made by a 5 year-old child on a Xerox machine from the 1970s. Based on the poor qualify of the pre-procedure materials they sent to me, I didn’t feel overly confident about the care I would be receiving from this group. I ended up a satisfied customer, but I most likely wouldn’t refer anyone to this group if asked for a recommendation of a GI doc.

What do you need to do to reach that higher threshold of patient satisfaction? For starters, according to Fred, you can maximize the patient experience through:

  • Genuine Empathy
  • Effective Communication
  • Listening

If someone is trying to tell you something, that person wants to be heard at that time. Let the person fully explain their situation, and listen intently to what he or she is saying. Interrupting the person or finishing their sentences does not demonstrate empathy.

For many of us, listening is a skill that we never fully developed. Remember, at most schools in the US, we learn to read, write, and speak. Very few schools teach us to listen.

And while empathy is a trait that some people are born with, all people can learn to be empathetic. Trust me, as a Schwartz, I was born with very little empathy, but feel that over the years I have managed to learn to be much more empathetic when dealing with others in my home and professional life.

If you’ve had the privilege of reading Stephen Covey’s Seven Habits of Highly Effective People, he discussed Empathetic Listening in great detail. I strongly recommend that you read this book at some time if you haven’t already done so. (This past summer and fall, we had a book club in my office and read one habit per month starting in May. It was a big hit and we all learned a lot by discussing the chapters together.)

Do Something Unexpected

What are some easy ways that Fred recommend to maximize the patient experience by doing something unexpected?

  • You and all your staff should greet each patient by name. Who doesn’t like to be addressed by name?
  • Put personal info into your practice management? software (such as the birth of a grandchild or a great trip they were telling you about) and bring up that nugget to the patient at their next visit.
  • Call all new patients at the end of the day they contacted your office staff to book their first appointment with you. How?reassuring would it be to get a call from your new Doctor welcoming you to the practice? Yes, you’re busy, but it shouldn’t take too long to leave a??message on their cell phone.
  • Track how each new patient came to your practice so you?know where to focus your marketing dollars and efforts.
  • Thank patients for referrals. This doesn’t need to be a?gift card or movie tickets. A hand written note is a nice touch.

My closing bit of advice? Read Fred’s book. I read it and ended up instituting changes in my CPA firm based on recommendations that Fred made to the dental community. During one of our staff meetings, we utilized the chapter on phone scripts and took turns reading his recommendations for the right way and the wrong way to handle certain situations. Even though the scripts were for a dental office, everyone found this exercise to be very worthwhile.

After reading the book, think about every aspect of the experience you are offering your patients, clients, or customers, and determine what you can do to maximize each person’s experience. Ask your staff to help come up with ideas. Then take the steps necessary to improve the internal marketing at your practice. Hopefully you’ll soon see an uptick in referrals coming to your office, and the improvements you have implemented at your practice will become as routine to you and your staff as going to the dentist.