3 Ways Every Dental Office Can Reduce Overhead

By: Mark Haslip, MBA

I’ve been working with dental offices, helping them reduce overhead for the last nine years, and in that time, almost all of my experiences have been remarkably similar. Despite the varying office locations, personal economic challenges, production levels, and socioeconomic conditions of the surrounding community, the basics of running a small business remain the same. Whether you're operating a dental office, a print shop, or sporting goods store, the same things need to balance on your P&L in order to run a healthy business and be profitable. All businesses want to run more efficiently, lower overhead, and increase profitability. Through the years, I have noticed similar trends in the dental industry. There are three simple things every dentist can do to achieve lower overhead and increased profitability, with predictable results.

1. DO More: See more patients or do more procedures in the same amount of hours worked per week, i.e. become more efficient.

2. Offer More SERVICES: In the business world, this is referred to as "line extension." Consider placing implants, offering orthodontic procedures, providing surgical extractions, learning endodontic procedures, expanding soft tissue management, etc.

3. CHARGE More: Raise your fees.

Business 101?

Business 101 states that no amount of cost cutting can make up for increasing production or sales. You shouldn’t ignore the expense side of the equation, but your time and efforts are best spent where they will be the most impactful. Put the majority of your mental energy into finding ways to grow your "top line" and, even if you do nothing else, your overhead will get closer to your desired percentage. Look at it this way… you have to produce dentistry in order to make a living. Even if you could get your supplies for free, if you don’t see any patients, you will still be broke.

There are three sources of income in a dental office:

1. What the Dentist does in the chair 2) What the Hygienist does in the chair 3) Radiography

These realities seem simple, but just because something looks that way, it doesn't necessarily mean it is. Too often we spend too much time over-analyzing, only to do nothing. I call that "paralysis by analysis." The most difficult thing for any of us to do, as human beings, is accept responsibility for success or failure. It's simply much easier to blame someone or something else so that the burden of responsibility doesn't rest on our shoulders.

Every day I walk into a struggling dental office, leave, walk across the street, and enter a thriving practice. The location is the same and economic factors are the same, but the results are drastically different. There are always things we can do to improve our businesses. There is always improvement to be captured, whether you are a brand new struggling scratch start or a thriving, established multi-doctor practice.

The Ultimate Question

The question it comes down to is this, "How do we achieve success, reduce our stress, or increase our income?" The answer is probably a lot of work; change always is. Start by considering what your goals are for your business. Your Henry Schein representative can help you with this by setting up a Business Discovery Meeting. It's basically an interview in which we ask a lot of questions and take a lot of notes. We ask about the business, how it started, how it's doing now, how you would like things to be, what improvements you would like to make, etc.

The next step is to find out what the problems in the practice really are, not what we think they are. Often those are very different things. An unbiased analysis of the practice numbers allows you to move past your assumptions. The great thing about analyzing the numbers is that numbers don't lie. They simply tell us things as they are, and if we learn how to analyze them, and we want to learn and improve, they open up a world of opportunity.

To run a Henry Schein Practice Analysis, I pull two reports from the practice management software and use that information to create the practice-specific analysis. That report provides a detailed review of many different areas of the practice including fees, radiography, hygiene, perio, periodic exams, coding, and more. The Henry Schein Practice Analysis takes a 50,000 foot view of a practice and then drills down to street level. It is simply the most comprehensive dental business opportunity report I have ever seen.

Call your Henry Schein representative today and tell him/her that you want this for your business. You will have conversations about your practice that you simply never imagined you would have with your salesperson.