Top tips for profitability
Lindsey O’Neill of Profitable Practices gives some tips on improving the bottom line at your dental practice
Profitability isn’t rocket science, it’s about the relationship between revenue and expense. So why do so many dental practices struggle with profitability? There are a number of reasons, one of the most common is keeping their fees too low. They are focussing on everything other than what really matters, their patients. Practices have far too many expenses, and don’t really know which are working and which are just costing them money. The list of reasons is unfortunately endless. Even if your practice isn’t earning lots of money to start with, your goal should ultimately be, to be sustainable and make a profit to reward yourself and your team. You are then indirectly rewarding your patients through a fantastic patient experience and re-investment into the practice to provide them with the very best standards and new cutting edge equipment.
Here are some top tips to help increase revenue and cut out excess expenses:
Calculate the exact costs for your business.
Before looking at profits you need to know where you are starting from. This includes knowing all your individual costs, not just a general expenses cost. How much is one item or service in the practice actually costing you. This way you can work out if it’s worth it.
Don’t spend too much time on low value activities. By working out your exact costs you have a clear picture of what is generating you profits, don’t therefore waste time on the low value activities, delegate or re-think.
Automate where possible. Don’t have staff wasting time on routine administrative tasks that can be outsourced for a lot less time and money. There are some great software and automative tools to help practices become much more efficient.
Track your time, and don’t forget your team. It is a valuable exercise for the whole team to work out where their time is going, and ultimately if they are using it effectively. For most practices their biggest expense is people so they should be used to their full potential.
Find a good team and retain it. Once you have found a team that works well, make sure you hold onto them. Attitudes are important to success, and something that cannot be taught.
Analyse your finances regularly. Once you have set up systems to track your time, earnings and expenses you need to ensure that you are analysing these figures regularly to help you spot changes and foresee potential problems. You can also see what is working for the practice and where changes need to be made.
Don’t undercharge customers, and don’t undervalue your time. Base your fees on your time and the expenses that are involved in providing that service. Patients won’t question you on your fees if you are attaching the correct value to what you are providing them with. Let them know how difficult a procedure it is, what skills are involved and the expensive lab work that is necessary to provide them with the end product. Don’t let them just assume the fee is for 15 minutes sat in your chair.
Don’t focus too much on bringing in new customers. Whilst this seems a contradiction in all we strive to achieve, it is worth bearing in mind. Whilst new patients are fantastic don’t neglect the ones you currently have. They are a fantastic tool to attract the right sort of patients to your practice.
Prevent waste. This is a tricky one as ultimately there is waste in all we do. However, by putting in place systems to monitor waste and consumption, you will be alerted to any abnormalities and address them as quickly as possible.
Don’t discount. Even if your fees cover your time and your expenses, you might want to sometimes offer discounts to new patients or on seasonal offers, which can be a good strategy at times. However, it can definitely be overused and as a result can devalue your services, so beware.
Don’t overstock. Most companies deliver next day, it amazes me why then there are stock cupboards overflowing with costly products that are just waiting to go out of date. Only order what you need, don’t plan for Armageddon!
Give opportunities to top performing staff.
If you have staff who excel at certain areas, give them the limelight, utilise them and reward them for their efforts.
Confirm appointments. So much time is wasted by FTA’s, remind patients, and remind them again. Make sure they repeat the day and time back to you to ensure they have it written down somewhere. Where possible you must automate this process, however for long and time valuable appointments a human reminder is also vital.
Focus on providing excellent service, consistently. Providing an outstanding experience to patients should always be top priority. By doing so it helps build repeat business and gain referrals, which serves as free marketing.
Don’t continue with unsuccessful marketing. Marketing can be costly, so if you are only seeing minimal results from one form of marketing, try something else but don’t keep going with what is unsuccessful.
Track the performance of everything you can. From your team’s performance individually, to marketing and everything inbetween, it’s a good idea to track performance, and re-evaluate the costs and if they are worth it to the practice. Cut out what isn’t working, don’t keep going with it because you always have.
Once you have an efficient business focus on the bigger picture.
Keep your goals and aims in sight and re-evaluate on a regular basis, where are you wanting to go, and are you still getting there?
If you would like to discuss anything raised in the points above, or have any queries on how Profitable Practices can help your practice please contact us using the details below.
Lindsey O’Neill is the managing director of Profitable Practices, and is also a partner in an eight-surgery mixed practice in North Yorkshire. Having grown and developed her own practice, she recognises the day to day challenges practices face trying to improve their business. She is passionate about helping dental practices, grow and develop, and reach their full potential. She can help you become a profitable practice, with an excellent team, and happy patients.
Telephone: 01937 326032
Email: [email protected]