As business owners, we talk a lot about ROI. As a dentist, ROI may seem straight forward: will this piece of equipment, employee, or software pay for itself in the long run? However, only focusing on the monetary aspect of ROI is a mistake. There’s a lot of other things to take into account such as time, energy, and usage.
Time is your most valuable resource. When asking if a piece of equipment is worth it, ask yourself how long it will take for you to learn how to use it, and how long it will take for you to train your staff to use it. If you’re hiring a new hygienist, you shouldn’t have to use time to train them on how to do basic dental procedures, you should only have to train them on the particulars of the practice. Don’t reinvent the wheel, and don’t waste time with redundant information.
You shouldn’t disregard your personal energy either. It’s not something we normally think about in business, but it’s still important. The stereotypical small business owner is someone who’s always working, never has breaks, and is consumed by the business. This shouldn’t be the case, but there’s far too many stories like it. With regards to ROI, is it going to take more energy to master a new piece of equipment? Will it take more energy to deal with a new employee? Or will these things save you energy by making things more convenient for you?
Usage is the last piece of ROI. How often will you actually use this new piece of equipment. Usage also has a monetary element. If a new machine is supposed to make a procedure easier and more cost effective, you can use this equation to figure out if it’s worth it:
Cost of machine < (procedure income – procedure cost) x number of times done in a year
More often than not, the number of times the procedure is done is left out of the equation. You have to know how often you do the procedure to properly calculate ROI. If the machine costs more than the procedure based on how often you do it, it’s not worth it.
ROI is more than just a monetary calculation. You have to take time and energy into account. Even if you’re looking at the monetary value, you have to ask yourself how often you will use a machine or piece of software. Theoretically, any machine can pay for itself in the long run, but not if you use it once a month or never have the time and energy to fully train yourself or your employees how to use it.