Howard Speaks: Know Your Numbers by Dr. Howard Farran

Howard Speaks: Know Your Numbers 

by Howard Farran, DDS, MBA, publisher, Dentaltown magazine

I’ve been harping on this topic for years, but it’s especially true in periods of inflation and economic recession: It’s essential that you know your practice’s overhead and break-even point for the day.

Your team should know those amounts, too. When your employees come in every morning, do they know the practice has to do $2,500 worth of dentistry just to pay the bills and break even? If a couple of patients have canceled, is your front desk team calling to schedule someone for those open spots, or are people headed to lunch because it’s noon? I sometimes say the dental team shouldn’t break for lunch until the practice has reached its break-even point, because everything after lunch would be nothing but net.

All hands on deck

Now, I’m not a proponent of forcing your team to work hangry every day—that’s going to affect how they interact with each other and your patients!—but you get the point. Everyone on the team needs to work to maximize revenue and minimize overhead wherever you can.

During times of inflation and economic slowdowns, this can be particularly tough. When they’re watching every dollar, patients are going to need more persuading that now is the best time to take care of their dental issues. How are your treatment coordinator and financial coordinator doing in their conversion rates? Is it time for more training, or a checkup on how your front desk is answering the phones?

A numbers game

This is also the time to reassess your collections and costs. What’s your collection goal as a percentage of adjusted production? What are the figures in your account aging report? How often are statements going out? What are you paying for supplies, insurance, internet or cleaning services? In her article for this month’s issue, practice management consultant Sandy Pardue shares her suggestions for practical, actionable steps practice owners and team members should be taking right now. As she puts it: “Now more than ever, efficient internal systems are needed for consistent income and predictability in your practice.” If you collect $900,000 in the next 12 months and reduce overhead by 5%, that adds $45,000 to your bottom line.

You need to get to “yes”

Another truism that’s even more true when times get tight: You’ve got to meet your patients’ needs above and beyond what happens in the operatory chair. If potential patients keep asking if you’ve got Saturday or weekend appointments and you’re telling them no, that’s business you won’t get because your colleague across town—or the doc in the DSO practice that just opened down the street—does offer that convenience.

And if you can’t get them into your operatory, you can’t make them ambassadors of your practice. It won’t matter how good your dentistry is if nobody’s telling their friends, their co-workers or the people who post questions in their social media feeds about your office. (Especially if, as last month’s Dentaltown poll suggested, most of you aren’t making an effort for your practice on social media yourself.)

It’s time to make some hard decisions about how you and your team are practicing dentistry right now. Are you willing to put in the time and energy to help ensure your success?

Sandy Pardue, one of the most trusted and reliable practice management consultants in the Dentaltown community, shares her advice and suggestions on how to reduce overhead in an article here.

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