Tips for the Young Dentist
Tips for the Young Dentist
Suggestions for connecting with your patients, disarming them, building trust and goodwill that will last! I will also include business and treatment planning tips I've picked up along the way.
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kylehornby
kylehornby

How Micro-Managing Increased My Profits

How Micro-Managing Increased My Profits

11/10/2018 4:05:18 PM   |   Comments: 0   |   Views: 25
Last time, I talked to you about how to effectively ask your patients to post online reviews for your practice.  The take-home message was:

Contact them in a way that makes it as easy as possible for them to leave a review for you.  Remove barriers.  Arrange it so that they click a link, leave a short review, and get on with their day.  E-mail is best.  Reach out when they are most likely to have time to leave the review.  You don't want them to read your e-mail at work and then have to remember to carry out the task later that evening.  

In this post, I want to present reasons why you should micro-manage certain aspects of your practice.  I don't believe in micro-managing your team member and what they do.  If you pick the right people, get rid of the wrong ones, and create a winning environment, you won't have to watch over their shoulders constantly.  In contrast, you should micro-manage your finances.  As Howard Farran suggests in his book Uncomplicate Business, "whatever gets measured gets managed" and that "you should make watching your (financial) numbers a lifelong habit".  Many of my Dentist friends pay bookkeepers to document their expenses.  Their dental assistants do all of the supply ordering and management.  When I ask them what they pay for a box of composite or a 5-pack of K-files, they tell me "I don't know....I don't worry myself with that stuff".  Well, they should be worrying about it:  It doesn't take much vigilance to increase your income significantly.  

I have a wonderful bookkeeping helper that aids me in preparing my year-end financial package and this includes her reviewing and auditing my bookkeeping entries.  But, she does not complete my bookkeeping entries.  I DO.  This is huge for me.  I would advise any new practice owner to build this habit early.  I have owned my practice for just over 3 years and I have made all bookkeeping entries right from the start.  As Nike tells us: Just Do It.  Here are some advantages to doing so:

1.  Learn about economies of scale & order in bulk!  One advantage to large group practice arrangements and cost-sharing partnerships is that, ordering larger amounts of composite, anesthetic, etc., results in better prices and lower overhead.  Find out from your reps when the promotions are on year-to-year and capitalize on 5+2s , 10+5s, 12 +7s, and so on.  Make sure you know how many boxes of anesthetic you go through in a week, in a month, in a quarter.  Do the same with composite and other consumables that you use frequently and therefore, quickly.  I have many friends buying these supplies a month's worth at a time and it doesn't make sense.  They let their Dental Assistant run both inventory and, therefore, supply overhead.  Take control and keep more money.  Simple.

2.  Explore different brands and suppliers.  2 years ago, I took a continuing education course with a University of Toronto Faculty member and practicing Endodontist.  This gentleman suggested that I take a look at a specific Endodontic supplier.  "Their files work just as well as the pricey stuff and they cost about 1/3 to 1/2 as much!" he told me.  I started using k-files, rotary NiTi files, etc., from this supply brand and with excellent results.  They have since released different supply lines for Crown and Bridge dentistry, simple restorative dentistry, and beyond.  It is important that you be aware of alternate  brands and suppliers - there are some out there making excellent products and at a fraction of the cost compared to "big brand" materials.  My overhead on endodontic treatments is now roughly half what it used to be.  I save about 45% on the composite that I use everyday.  Get involved in supply decisions and won't regret it!

In wrapping up, I will note that it can be difficult to increase production at a certain point on your production curve.  Often times, you will need to learn and offer a new technique or service.  Doing so is important and will make you busier and more productive more quickly.  You will, however, get to a point where you are saturated given the hours you are working - at that point (and hopefully, before you reach that point!) you will explore the concept of increasing your income by minimizing your overhead.  I have many friends running at a supply overhead of 9-10% on a yearly production/gross of 1 million dollars.  In my first 3 years of practice ownership, I am running at a supply overhead of 4.4%.  If we are talking an extra 5% on an annual 1 million gross sliding into your pockets, that amounts to $50,000.  That is big money and you can make it happen with a few astute overhead decisions.  If you leave your bookkeeping to someone else, your head will remain in the sand and you will miss out on harvesting a significant amount of bonus cash from your practice.

Thanks for reading,

Kyle R. Hornby, DDS
Danube Dental Clinic
Kitchener, Ontario
CANADA
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