15 ways to actually measure dental practice success – Part II

by | Jul 10, 2015 | Wealth Wisdom

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Quotes & Notes:15 ways to actually measure dental practice success - Part II

  • At the beginning for start-up practices, typically the biggest thing you can do for your practice is work on getting new patients in, upping the revenue for your patients, upping your effectiveness and efficiency.  Overhead goes away.
  • KPI, if you google it, you will see, the key performance indicator is a financial measure or non-financial measure that goes towards measuring how well an institute of business is doing.  They can tell where you are right now and tell where you are going to be going.
  • We find a lot of practices really struggle with having their hygiene team be aware of what they to be producing, what they need to be offering the patients.
  • We typically say that 75% of efficiency is what you need to be looking at, which means that three out of the four patients reschedules.
  • Every business has a life cycle. There is the growth stage, where it will be an upward slope. Most practices will have six months spurts because that is when you see your appointments come back in for a second time and plus the new appointments coming in. There will be the maturity stage, which means you will still be growing, but you are not growing as fast as in the growth stage. And then eventually there will be stagnation and decline.
  • We usually say for new practices, the magic number to keep growing is somewhere around one to two new patients a day per working dentists.
  • If you are busting that number out of the park, and you are continuing to see your practice not grow, I guarantee that you have an issue with getting people rescheduled back in.
  • This [numbers for accepted cases] is more of a mental grasp, or some type of note, some type of shorthand to write on a piece of paper or spreadsheet that you carry around with you all day. If you are really looking at this number, and say I presented this much money to this person, track that in some type of format, come back in six months and see what has happened.
  • Being able to tell them [patients] about the problem, and tell them what would happen if they don’t solve that problem, and then offering them the solution is very very important. You have to talk in their terms.
  • If you know it is a financial problem, then there are solutions out there: financial payment plans that you can adopt, in house payment plans, etc.
  • Another more powerful communication method is by asking questions at the beginning. You would be surprised at how many people can talk themselves into something just by asking the right questions.
  • Sometimes it is a software problem where the people up front aren’t entering the information correctly for you to track your AR effectively. If the number is that high, and the software is correct, nine times out of ten it is a process problem.
  • A lot of practices will do their billing on Friday, so the patients will get it on Saturday, and then they have two days to forget about it.
  • At one point I was looking at a practice, and I noticed how much they were paying on credit card fees. That one practice, just by changing the phone number that that card service calls, basically is going to save almost $10,000 a year. When I saw that I thought that this must be a problem everywhere.
  • Ideally, you want five percent so that if there are twenty appointments, only one of them is broken.
  • You need to understand your capacity in order to know what you are trying to strive for. If you only have three ops, then your capacity is way different than what a ten op practice is.
  • An active patient is a unique patient that has been seen for the past 18 months.
  • We really tell most practices to strive for 45% in GP practices for a net take home.
  • A lot of people base this (adding new dentists to their practice) by how tired they are . . . The biggest mistake we see is that they don’t know how much this relief is costing them.
  • It really doesn’t make sense to bring in someone as a partner until you get to around the one and a half million points. That means you have a strong base and control over your overhead.
  • Some fast-growing practices I see spend almost nothing on advertising. At the same time, some fast-growing practices I see spend a lot on advertising.

All of the most successful practice owners I have ever met were master marketers in their own right. They understood that marketing is a very essential part of any business.

  • “We always overestimate the amount of change that can occur in two years.  We always underestimate the change that can occur in ten years.” -Bill Gates
  • Marketing and advertising, there are two facets to it. There is external, which is any patient who has never been in your practice before, and there is internal, which is making sure your patients stay your patients.
  • To learn more from Jonathan Van Horn, you can email him at [email protected], visit his website, dentistmetrics.com, or even find him on Facebook or Linkedin.

Download Jonathan’s FREE KPI resource at dentistmetrics.com/relentlesskpi.

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15 ways to actually measure dental practice success – Part I

by | Jun 28, 2015 | Wealth Wisdom

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Quotes & Notes:

First, download Jonathan’s gift for our podcast listeners:  DentistMetrics KPI Guide

  • downloadIf you are not leveraging your time with your CPA, in order to get the most out of them, then you are going to have to find that time elsewhere.
  • No one’s ever going to have the absolute pinnacle business.
  • We focus on the business in order have that have the maximum amount of returns for the owner because in the end it is going to be what funds everything else.
  • There are multiple different approaches you can take with marketing; you can do a shotgun approach, you can do a sniper-rifle approach, you can do a machine gun approach, you can do a lot of different approaches. A lot of this is testing to see what is working.
  • In a dental practice, if you are not at absolute capacity, then it makes absolute sense to fill to your capacity.
  • Try and set your schedule up like the day that was most productive.

KPI –  a key performance indicator.  KPIs can be financial, they can be non financial, they can be actions, they can be a lot of different things.

  • The main number that we look at is two fold. Number one we look at net productions, number two we look at the total of those wages and salaries plus benefits plus payroll taxes. Then we compare that to the revenues. We do not include family of the owner, we do not include the owner’s salary, and we also don’t include associates in this.
  • Startups for the first few months will not really be in these numbers. These numbers really start kicking into gear when you get into around $650,000-800,000 dollars in revenue.
  • There are a few universal truths in the world. One of them is that they think they are busy. Strangely enough, everyone also thinks that they are efficient.
  • The practice as a whole has to really start heading towards a specific path. They have to be set on some type of system, some type of game-plan to be able to get them to that number. Typically when we talk about that it is going to be a production type goal.
  • If you are in a not competitive market then you are probably not in a very good market.
  • We have a general rule on five percent on supplies. There are some practices that aren’t going to be able to reach that.
  • It is very difficult to trade convenience for money. There are a lot of places that you can buy supplies, and they can frame it in a way that you feel like you are saving money but in the end, if you are paying $26 for a barrier, and you can get it someplace else for $19, then you are paying seven dollars more.
  • If you are thinking about saving 20% on your supply costs each year, and your supply costs are $10,000 then you are better off going out and finding three new patients to replace that $2,000 dollars.

Five percent (for supplies) is the number that we always strive for, and for some practices this is not attainable, but you would be surprised at what you can obtain by trying.

  • For the hygiene rule of three, the first level we have is that hygiene typically contribute about a third of the production of the practice. The second three is that the hygiene department should typically be compensated at about a third of net productions or collections in some fashion. The third one is that you like to have less than three hours a week of unscheduled hygiene per hygienist.
  • If you would like to learn more from Jonathan Van Horn, email him at [email protected], visit his website, dentistmetrics.com, or even find him on Facebook or Linked-in.

Again, you’ll find Jonathan’s FREE KPI Guide here:  http://dentistmetrics.com/relentlesskpi

If you enjoyed this episode, we would love a 5-star review on iTunes:

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