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By
Julie H. Weir
One of the most important management tools dentists can have is
an understanding of the business numbers of their practice. Some
of these key numbers are:
• days per year patients are treated
• collection and production goals
• new patient goals
• practice expenses budget
Business numbers must be defined, monitored, and analyzed on a daily
and monthly basis, as appropriate. They will provide powerful information
that can be used to take the practice to a new level.
When I consult with dental practices, I often find that many doctors
do not have a Dental Practice Business Plan. It is precisely because
of the lack of planning and goal setting that potential profit dollars
are lost to the practice every year. If a doctor puts together a
business plan for their practice each year—and involves the entire
team—it is much more likely that financial goals will be reached,
instead of just leaving it up to chance.
The entire team must understand why it is so 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 the practice must be profitable in
order to continue to provide them. When a dental team is focused
on goals, additional dollars are produced and collected. Typically,
production increases are 10% to 25% in already busy practices, and
if a practice has room for growth, increases can be over 80%! These
added profits can be used to support salary increases for the doctor
and staff, retirement contributions, debt reduction, new equipment,
or facility improvements. A practice at any stage, whether it is
a new start-up or mature, can benefit from implementing a Dental
Practice Business Plan. The plan should define exactly what the
practice goal numbers must be for production, collections, and expenses
in order to meet the doctor’s personal and the practice’s overall
financial needs. It is well worth the time and effort to put together
a business plan that defines goal numbers and sets up a system of
monitoring practice performance to determine whether or not the
goal numbers are being met.
The benefits of having a Dental Practice Business Plan are enormous.
The team can increase profits, reduce stress, and have more control
over their future. All of this leads to more satisfaction and happiness
while working in the dental practice!
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