Nearly 200,000 dental practices are operating in the U.S., and this number will continue to grow in the years to come. Each and every one of these dentists wants to do all they can to limit their expenses and increase their profits. There are many ways to increase your profits to guarantee you have a successful practice for years to come.
Control Your Overhead Costs
If you can control the overhead costs of your practice, profits will increase. One way to decrease overhead is to control the amount spent for the dental office lease. Be diligent when researching rental rates for spaces in your target area of practice to ensure the lease rates proposed are fair. By negotiating a reasonable rate in the beginning, you can remain profitable as the office grows. Protect your cost for rental rates by negotiating a cap on rates each year. Make sure operating costs are listed in detail and you can review them to make sure you are not being overcharged. The language in your lease can drive up costs, so be sure to have the lease reviewed by a professional before you sign it.
Staff overhead can be the most costly overhead expense in most dental practices. Hourly payment of employees tends to be more efficient than paying employees when the office may be closed or when employees are away due to vacation, sickness, or continuing education. Commission pay is the most common way to pay dental associates. The use of part-time employees can maximize productivity and lower the cost of fringe benefits and retirement plans. If employees are cross-trained, dentists are able to fill in without hiring more office staff. Investigate the option of outsourcing tasks such as payables, payroll, and collections.
Carefully managing your supplies can also add thousands of dollars to your bottom line. Remember hidden expenses such as defective product returns, overstock, and shipping charges. Make sure you have a good system to track your purchases and inventory to decrease restocking fees and increase the use of free offers and credit for your supplier’s mistakes. Make sure to have their promises in writing. Always continue to check the market to make sure you’re getting the most for your money. You might want to consider asking supply companies for a one-page bid for your business.
Charges for Services
Establishing the right fees for services rendered in your dental office can be the lifeblood of your practice. Insurance carriers usually base their charges by zip code on a geographic table that shows an average charge for each treatment code. The fee schedule is negotiated by the employer who is buying the plan in question and the insurance carrier providing the coverage. There are publications available that anonymously show the average fees for each particular area. It is recommended that fees be raised at least 5 % per year. Setting fees is a difficult process and is extremely important to the dental office. Consider giving patients a written treatment estimate, informing patients about financial assistance, and evaluating on a yearly basis the plans with which the office is participating.
Increasing and Maintaining Patients
Attracting new dental patients and maintaining the ones you already have is very important. Dental practice owners should build a pattern of repeatable, long-term service that invites patients to their practice. This practice can also help to keep current patients engaged. First of all, do not assume that because a patient visits your office for a procedure they will come back to your office for the next procedure. The first impression your dental practice may make may not be in-person but through your website or online search. It is important to consider these places first.
Hire friendly people to greet your patients. The team members’ attitudes toward the patients leave a lasting impression. Patients must be greeted in a sincere manner immediately by the dental staff. The best thing you can do is ask patients how things went and what can be improved. Consider using referrals as a way for patients to get a gift or discount on services. If you do ask for feedback from your patients, use it and share it with your team. If you receive great feedback, acknowledge and reward your team. Your staff is what will keep your patients returning to your practice for services. If patients know you care, they will revisit your practice and share the news with their friends.
Location of Your Practice
The location of your dental practice is key to dental practice financial success. Use technical data to help you figure out where to locate your practice. Things you should consider are what practices to perhaps try to buy and how to attract the patients you are targeting. The location of your dental practice is not just where it is located on a map. You must know and understand the goals of your practice to determine the type of patients you are trying to reach.
Consider the maximum drive time of the patients. How many dental practices are there near the area? What is the future forecast for the area in question? Are you in a high-growth area for the future or in an area of decline? Focus on marketing in the area where you want to be located. Will it be better for you to lease or own your practice space? Everything will be determined by your location choice, so make sure to develop a strategic plan to determine where you need to locate your office for future success.
Strategic Practice Solutions offers a systematic, hands-on approach to dental practice consulting with a five-step system to dental practice management success! Contact us to learn more.