JOANNA CAREW

Going to be bold and talk about something we don’t often speak about in dentistry … profit!

I know, it can feel awkward, even a bit grubby. We are healthcare providers and don’t like to think about sales and making money, but profit shouldn’t be uncomfortable; we as practice owners are running businesses and without a healthy profit margin we won’t survive, end of.

Notwithstanding, I speak to so many practice owners who are running around, flat out, exhausting themselves with the hours they’re working … and they still find their numbers are no longer stacking up. They’re disheartened and many are ready to sell up. This is compounded by the public perception that private dental practice is money grabbing and our streets are paved in gold.

Undoubtedly, the landscape has shifted. I was with several industry experts this month who quoted overheads increasing by 50% in the past 5-years. Just opening each chair costs an average of £750 per day in costs and that’s before we pay the clinicians!

For most of us associate pay hasn’t budged from fixed percentages, their cut doesn’t absorb any of the increased overheads, and our prices haven’t been able to keep pace. The corollary is practices operating under lazy or unfocused financial management will find themselves struggling to make ends meet.

Yet, it’s not all doom and gloom – with attention to detail, innovative practice management, and healthy communication we can still thrive, we simply need to crack on and be proactive.

Here are some ideas for improving profit margins in the practice:

Know Your Numbers – Every Last One!

You’ve got to know where every penny is going; not in a vague, ‘my accountant tells me we’re fine’, kind of way. I mean really know.

What are you spending on overheads? Where are the hidden costs? What are your staffing levels? What does it actually cost to deliver a composite or a crown? Not purely in materials, but the time, the staff, the room, are you taking into account repairs and work under guarantee?

You need to think about occupancy rates. Are surgeries sitting empty for chunks of the day? Are you plagued with late cancellations? What sort of work is filling the diary? Back to back check-ups or treatments? Are we booking smart? Is the team being proactive with recalls and hygiene appointments, or just reacting to the diary as every day comes?

Thinking about staff, are they working efficiently? Are they on board with the way the practice runs, with your culture, with sustainability and minimising waste? Or are they just going through the motions for the pay cheque at the end of the month? Could you adopt new technology, even AI, to help free up more of their time so they can focus on what really matters?

In short, it’s all there in the detail – if you’re willing to look you can start minimising costs, maximising efficiency, and voila you’ll been on your way to generating a respectable profit margin.

Next, a Tricky One, But Talk to your Associates

This one’s important! If you’ve got associates on a fixed percentage, not working to generate practice income, yet you’re the one absorbing the rising costs … something’s gotta give, the model simply isn’t sustainable anymore.

So you’ll need to have a conversation, about costs, about types of work, about marketing, conversions, even about moving to a sliding scale instead of fixed percentage. Clearly, this may be a little uncomfortable, but you’ve got to suck it up, sometimes that’s necessary in leadership, but this one’s essential. You’re associates need to be part of the solution, well-utilised, and they’ll be far more engaged if you’re open and honest about what the practice needs to do to thrive.

Look at the data and discuss:

Conversions of treatment plans into booked treatments.

Referral numbers.

Membership sign-ups.

The data is all available and interrogating it gives you both a real-world view of how your associate is performing. You can expose weaknesses and celebrate triumphs, troubleshoot, share good practise, and set KPIs for future performance.

Bottom Line – Are you Leading your Practice, or Simply Keeping it Afloat?

Let’s not forget the national and world view, economies are struggling and this leads to our patients feeling the pinch too. They’re going to be more selective as a result, lazy finances will become even more pressurised, we all have to be sharper than ever before.

We can’t afford to operate on lazy business habits, no, the practice that will thrive are the ones who are proactive; they know their numbers, invest in their people, innovate, and act fast.

I know where I am driving Carew Dental to – we’re headed straight for profitable, principled, and thriving … what do you want for your practice?