Attention dental practice owners! Take charge of your business to ensure it’s well positioned for the road ahead

Attention dental practice owners! Take charge of your business to ensure it’s well positioned for the road ahead.

• 5 key performance indicators to monitor the health of your business.
• Focus on 5 key initiatives to improve profitability, growth and the value of your business.

With the start of a new financial year, now is the time to see if your dental practice is well positioned for a successful financial year.

We all know that by establishing regular health and dental checks we’ve got a greater chance of preventing problems throughout our lives. 

It’s the same reason for establishing regular financial and strategic reviews of your professional practice. Done regularly, this will help you keep focused on identifying key value drivers to maximise the value of your hard earned business investment and to effectively manage risks, potential weaknesses and/or threats. 

Effective financial and non-financial monitoring and strategic planning will help you position your dental practice to maximise value and make your business investment work for you. 

Working ‘on’ vs ‘in’ your practice

Invest time to work on your dental practice, review key business performance measures and industry trends:

• Review financial performance including key performance indicators and use this to compare and benchmark with other successful and leading practices in your industry.
• Review key trends in relation to government, industry, technology, staffing and resources, client/patient needs and innovation.
• Identify opportunities, strengths, weaknesses and threats.

Start with 5 key performance indicators to monitor the health of your business:

1. Measure the growth of the business – patient fee growth, new patients, referrals from specialists and repeat visits. Review fees per consultation and service type as a % of Gross fees to identify trends. Manage the risks – review of patient complaints, average waiting time and lost patients.
2. Measure performance – consulting room utilisation, fees charged per consultation, fees per Dentist, net contribution per Dentist, gross profit margin and net profit. Manage the risks by identifying trends and shortfalls compared to other dental practices.
3. Measure the financial impact of the investment in new systems and/or processes. 
4. Measure staff engagement and performance - training hours, 360 degree feedback surveys, Dentist revenue, productivity, Dentist profit margin.  
5. Measure operating costs – as a % of gross fees measure rent, dental supplies, wages, IT support, subscriptions and insurance and benchmark with the industry.

After reviewing past performance, focus on 7 key initiatives to improve profitability, growth and the value of your business.

Plan ahead, identify and prioritise key initiatives for the next 12 months aimed at driving revenue growth, improving profitability, cash flow, efficiency, performance and ultimately increasing the equity value of your dental practice. 

Some key initiatives include: 

• Establish patient relationships linked to the dental practice and its brand; not just the individual. Introduce new technology to improve patient service and build effective patient relationships.
• Staff development - consider leveraging from other professionals and team members, increasing the scale of your business, training key staff, investing in professional development to enhance level of care and maximising leveraging within the organisation by introducing an effective structured team. Introducing incentives and rewards to encourage performance improvements would also assist.
• Develop systems and processes to reduce reliance on key people within the dental practice.
• Reduce potential threats by increasing the range of services offered, select the right service mix to maximise profits and identify cross service opportunities.
• Enhance patient services utilising data analysis and management tools to identify patients who would benefit from proactive collaborative care.
• Maximise room utilisation by effective use of rooms for part time Dentists and/or implement a recruitment program.
• Effectively use debt to provide capital to expand and grow your dental practice by acquiring other practices. This strategy can potentially lead to increased revenue growth, profitability and a higher return on investment. 

Business Success

Successful business owners maximise their investment returns by continuing to evolve the way they do business. They continue to set new goals to counter existing weaknesses/threats, take advantage of opportunities as they arise and measure success against these goals. Take charge of your business to ensure it’s well positioned for the road ahead. Select and focus on 7 key initiatives for the next 12 months, reflect and measure the benefits achieved and prepare for your next strategic planning cycle. 

 

If you would like more information, contact Ashley Quinton on 07 3839 1755 or aquinton@prosperity.com.au. Alternatively we have Specialist Health Sector Advisers in each of our offices. If you would like to speak to one in your location, call 1300 795 515.