By Elena García, dentalDoctors Financial Director. 1. Design strategies that will increase sales revenue. Go over treatment fees and familiarize yourself with their inherent costs in order to set an ideal fee amount that will allow for revenue to increase without risk of losing the patient because we jacked up the tab. It's the way to stretch the profitability of each treatment to its maximum. We also need to find ways to encourage patients to accept those treatment options that have higher profit margins instead of passively allowing them to choose the ones whose margin is lower. Increase in the overall profit margin of the practice will be the result. Lastly, improve patient services before, during and after treatment in order to earn patient loyalty and thus guarantee these patients as ongoing sources of revenue.2. Define tactics to decrease costs.
Nowadays, with patients who are increasingly more demanding in terms of quality and price, and competitors who are prone to play offense and tackle, it’s imperative that one of our objectives be making the practice profitable; it will be key to survival. Profitability can be defined as the capacity to generate revenue over and above operating costs, and it’s one of the more relevant indications of a company’s success; when sustained over time, profitability will lead to strength and growth. Here are some keys to attaining the highest profits we can:
Develop a model for cost management geared towards finding more permanent ways to decrease consumption. Negotiate with suppliers and analyze treatment protocols in order to decrease cost without jeopardizing quality. As regards personnel, keep staff costs strictly within the realm of necessity, increase productivity by supervising peaks and lows in appointment schedules, and motivate! It's fundamental for success.3. Remember to take all costs into account.Although supplies and personnel are the most significant expenses for a dental practice, we shouldn’t disdain the effect that reduction of other smaller costs could have on profitability. For example: the total amount paid in taxes each year could diminish with good fiscal planning, which would allow for the practice to take advantage of opportunities to write off more or qualify for other advantages. Make sure that your business manager is up-to-date on the latest in tax reform laws and that his or her plan for your practice is streamlined.
It's also essential that we receive payment for each and every one of the treatments performed and, in order to do so, we need to study each case carefully and select the payment method that is the best option given the patient's circumstances. Finally, reducing stock through inventory management will allow us to keep it fresh, adjusted to need and less of an expense to bear.
4. Analyze and measure the results.
If you apply each of these guidelines to your practice, you'll be guaranteeing its survivial for years to come. Nonetheless, it's vital that you remember to measure; in other words, not only have a hand in everything that's going on within but also be permanently in tune to all the different ways to measure the activity. Finally, remember that making decisions based on hard data and not on "feelings" is indispensable for taking your practice's profits to the highest level.
Elena García Gómez has a degree in Economics, a Masters in Financial Management and a Maitrise et Ingenieur Maitre, specializing in Bank and Finance. She is curently the head of the Finance Department at dentalDoctors.