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The Business Plan: The Key to Your Dental Practice’s Success
Most doctors work hard in their dental practices four to five days a week focusing on producing high-quality dentistry and treating their patients with high levels of customer service. This focus used to be enough to ensure financial success of their practice. Not any more. Doctors today must also have an additional focus to their work, and that is working on the business part of their practice.
What Does This Mean?
It means taking the time to understand exactly what your practice numbers must be for production, collection and expenses to meet your personal and practice financial needs. It is well worth the time and effort to put together a business plan that clarifies these numbers, defines daily and monthly goal numbers, and sets up a system of monitoring practice performance to see if your goal numbers are being met.
If a doctor puts together a business plan for their practice each year, they are much more likely to reach their financial goals instead of just leaving it up to chance. By simply working on your practice, and not just in it, you can increase production and profits! Typically, production increases are 10 to 25 percent in already busy practices, and if a practice has room for growth, increases can be over 80 percent.
Who Do I Involve?
Good practice numbers mean that you are satisfying patient needs. Satisfied patients accept and pay for the recommended treatment plans, refer friends and family, and return for their preventive visits. Every member of the team is involved in creating satisfied patients. Therefore, it is truly a team effort to have your practice reach its financial goals -- the doctor cannot do this alone.
The entire team must understand why it is important for the practice to have these goal numbers, what the goal numbers are, and how to track them. Staff members desire raises, benefits and retirement contributions every year, and practices must be profitable to continue to provide these requests.
Where Do I Start?
First, figure out what your financial requirements are for the year: income, retirement, overhead, debt service and practice improvements.
Second, understand what the most basic business numbers are that you must know about your practice every year. These are: number of days the practice will see patients, collection and production goals, new patient goals, and a budget for practice expenses. Then, put together a practice business plan that defines the business numbers you will need to meet your business and personal financial goals. All of these numbers should be defined and tracked daily and monthly as appropriate.
Third, make sure all of your fees have a competitive balance. Review practice fees to determine if any area is too low and increase fees where appropriate. Additional production dollars lost to low fees can be significant over a year's time.
How Do I Do It?
I believe so strongly in this process that I have written the workbook, 10 Steps To a Dental Practice Business Plan, to help doctors figure out what all of their business numbers have to be to meet their financial goals, how to involve the team in this process, and a system for the staff to use to monitor all of the goal numbers. This workbook is a complete practice system that gives the doctor and team all of the tools to implement the business plan into the practice.
The benefits of working on your practice and not just in it are enormous. Increased profits can financially reward the doctor and staff, reduce stress, and give the team more control over their future. All of this leads to more satisfaction and happiness while you are working in your dental practice!
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