How well are you running your business?
Dental practices often have little knowledge of their competitors internal working arrangements or profitability; however, it’s only by knowing how other practices are performing that you can determine whether your own business performance is as good as it should be. This is called ‘benchmarking,’ which compares the data from your practice with that of other similar practices and the UK dental industry as a whole.
We’d all like to know what the competition is charging for the same services we offer! Benchmarking makes this possible, along with details of other commercially important criteria which ultimately determine our practice’s place in the success hierarchy of what we do.
Some data is available from official surveys, and more specifically from the practice’s annual accounts, but to realistically assess your own performance against competitor practices and identify those areas within your organisation which are out of step, more comprehensive information is required, usually gathered by filling in a survey document. There are ten recognised areas in the financial operation of a dental practice which define its overall performance – income (specified by type of work), associates fees, staff salaries, premises costs, profit, liquidity (assets and liabilities), actual as opposed to notional hourly rates, prices charged, the size of the patient list and the conversion ratio for new patients.
Principals need to remind themselves that potential patients will certainly be making practice comparisons, and the internet leaves no stone unturned.
Suppose you were slightly overpaying your associates relative to the industry standard – your fees would have to be higher than average, new patients would be harder to come by, and ultimately the practice’s profitability would suffer.
Providing information for benchmarking involves no breaches of confidentiality – all data is pooled and no names are requested, only facts and figures.
Benchmarking helps you to develop a keener competitive edge to trounce your local rivals in the areas where you are already strong, and it often throws up new ideas to take the practice forward.
For more information please visit www.lansdellrose.co.uk or call Lansdell & Rose on 020 7376 9333.
Claire is practice development director and joined Lansdell & Rose in January 2013. Claire is a qualified accountant with a background in healthcare but uses her knowledge of the industry to ensure Lansdell & Rose are continuing to develop client offering by implementing efficient systems and processes, growing the team and establishing new professional contacts who can also assist clients. She is also responsible for the marketing of Lansdell & Rose.