Why You Must Pay Attention to Your Money

Most dentists don’t truly know their numbers.  They often defer that part of their business to their office manager.  You MUST know your numbers. 

We’ve always been told that a penny saved is a penny earned.  And the message of saving is common among not only our dental consultants, but also our parents, teachers, and friends.  We are constantly told to watch our spending.  Have you been told that in the past?

I think that’s the wrong message.  Consider an example common to a lot of the advice given to us by dental consultants to cut down on spending in items like supplies.  A typical small office with a $1,000,000 in annual revenue will, according to statistics, spend about $50,000 on supplies each year.  That amounts to 5% of the total revenue.  So if we try to save, let’s say 10%, that is equal to $5,000 in savings. 

What about payroll?  That’s the next one we are told to control or shrink.  Imagine going to your employees and telling them to take a 20% pay cut!  What kind of results would you get moving forward?  What about loyalty or treatment presentation, especially when it comes to things like veneers? 

Many dentists look for ways to cut spending but what happens to the office when you do that?  Your office shrinks mentally, emotionally; it contracts.  When you cut spending, to take less risks because you are in “conserve” mode.  When we contract, we are afraid to push the limits and try new things.  You can’t survive like that for long. 

I routinely check revenue/sales.  I am never concerned with spending.  If I need a new intra-oral camera because the old one broke or the resolution is poor, I get one.  If my sterilizer broke, I get a new one.  If we need new software, or technology, we get it.  We are always improving.  And in order to do that, revenue must go up.  So instead of saving 10% in supplies or payroll, what if you raised revenue by 10%?  For that small typical office, that’s $100,000 in revenue (which, by the way, is mostly pure profit).  Revenue MUST be watched, and watched closely.  That’s the key to growing any business. 

How do you increase revenue? 

Improve your case presentation – you must learn to present comprehensive treatment.  And you must be confident in presenting it before things break or deteriorate.  Why wait till a tooth breaks before properly restoring it?  Why wait for pain before doing a root canal treatment? Why wait till someone is 83 years old before you do their veneers?  You must believe that what you do, the service you provide, is a great service to your patients. 

Many of you say: “But I don’t like pressuring people”.  That to me means that you are not confident in yourself; that you don’t truly believe in what you deliver.  If you believe that what you provide, the treatment that you deliver is exceptional, then it’s helping somebody do the right thing.  Case presentation and your ability to deliver comprehensive treatment presentation to each of your patients is key to growing your practice and delivering better dental care. Check out our Case Presentation program at UPB Dental Academy for more information on this subject. 

Keep track of KPIs

Measuring some key performance indicators like case presentation, amount scheduled, amount billed per provider, those are just some of the important numbers that every office should know at all times.  Each day should have a target, calculated based on what you want to reach that year.  That’s the core of Strategic Planning. 

ONE RULE: NEVER LOWER YOUR TARGET

Once you set a target, never lower that target.  You must set it high, make it challenging.  It will motivate your team, and it will definitely motivate you.  And look at it this way, even if you don’t quite reach it, you will come way closer to it than you would if you set it low. 

For more information on this and other dental management topics, check us out at UPBDentalAcademy.com

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