Although root canals can be difficult to market, they are the most cost-effective dental procedure. Charles Blair, DDS and John McGill, MBA, CPA, JD Dr. Blair urges all doctors to invest in the best clinical and business advice available to maximize returns. Like The Millionaire Next Door, he finds that those who are most successful have sought help from competent professionals - and implemented their advice.
Are you busy producing week after week, only to find that there isn't much money left in the account at the end of the month? Well, chances are you're making one of the following four mistakes that increase your overhead and ruin your finances. However, for now, let's focus on some particular mistakes that I see dentists make more often. You should analyze your output, income and profits at least once a week to see how things are going, if you are on track towards your goal that month, and if there are any alarming trends you need to address. This allows you to run your business in real time and get back on track before something becomes a real problem instead of realizing it at the end of the month: “Uh, oh, I don't have money for payroll (or taxes) or “Dang, with all these other expenses, I can't seem to pay myself again.
So watch your own finances on a regular basis. We can teach you exactly what numbers to look at and how to interpret them. The proper definition of “overhead” is the amount of money you NEED to spend to keep your business running. Now, I'm not saying that you can't spend money on anything but the basics.
You can buy things completely just because you want them, improve the quality of service in your office, reward your staff and renovate your office. Before you make those expenses, describe your true overheads of what is actually needed. Once this is done and set in stone, you will see how much additional money you will need to earn in order to purchase the new CEREC machine, the X-ray machine, the elegant sign, the decorative flowers, etc. Set your weekly and monthly production goals with this in mind.
And you'll probably find that you'll have to set aside a small percentage each month to save on things you'd like to splurge on. And if you have a week or a month off, those “waste” items will be the first things that are sacrificed. Payroll is usually the largest percentage of your overheads. And that's the way it should be; it's the staff who keep the practice running and allow the production to take place.
But the idea is that the staff is highly productive and the work they do, in turn, will attract more patients, create production and, in general, generate income that is worth many times more than what you are paying them. Therefore, if certain employees are not doing their jobs well, they do not contribute to generating this resulting income, and then the payroll percentage seems too high. An additional comment here is that you don't be afraid to delegate and allow your staff to do their jobs. A big mistake many dentists make is limiting their staff too much and not trusting them to handle their work independently.
If you don't trust them enough to do so, then it's time for you to study how to better train them. One of the biggest mistakes I see dentists make is the lack of staff in the front office to save on payroll. On the surface, this seems to make sense. But if you dig deeper, you'll find that you're stifling your potential production here.
It's just not a good business decision. The same goes for the doctor who tries to do his own hygiene or keep only one hygienist despite having thousands of medical records (whether they are overdue, inactive or not). Believe it or not, a well-managed hygiene department should cover all the general expenses of your practice. That means that the doctor's entire production is salsa.
It would be nice, right? Well, you can do it. It requires a little effort to reactivate late patients and hire a hygienist, but it's the best way to improve cost-effectiveness and value of the practice. We created a free hygiene production calculator that calculates your potential hygiene output and how your current production compares. I highly recommend using it, at least just to see where you are.
Here are my tips for keeping your overhead under control and maximizing profitability. Obviously there is a lot more to this topic, in fact, we have a 3-day seminar on the MGE program dedicated only to this topic, but I hope these four tips help. Do you want to improve your leadership skills? While leadership is an important topic. Which procedures have a higher profit margin? They include implants, endodontics, porcelain veneers, and crowns and bridges.
In general, these dental procedures generate more profits than your standard care treatments. For most dental offices, a certain percentage of dental patients generate the majority of profits. The Wealthy Dentist conducted a survey asking dentists what type of dental patients they find to be the most cost-effective for their dental practice. .