The basics of dental business management
Managing a dental business can be a real challenge for new and experienced managers. Whether you are a dentist manager or a dental office administrator, a few tips can help you make the most of your managing strategy. In this article, we will go over the basics of dental management and give you a few pro tips to optimize your management experience.
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3 pillars to build your dental office management strategy:
1. Numbers and reports you need to know
Measuring progress is essential to every managing job, and the dental environment is no exception. Understanding where the numbers come from and how to generate and analyze them is key to good management and to driving success in any practice.
Let’s review some basic concepts of reports that you will need to understand:
Key performance indicators:
✦ Overhead: Overhead is the expense of running a business, including expenses like staff costs, equipment, building maintenance, marketing, and so on.
✦ Break-even point: The minimum amount necessary to cover costs and keep the practice running every single day.
✦ Net income: This is calculated by subtracting all production-related and overhead expenses from the net revenue.
✦ Accounts receivable: Total money owed to the practice.
✦ Aging report: Tracks outstanding balances categorizing all the amounts owed by customers and insurance, including the length of time the amounts have been unpaid.
✦ Insurance aging report: Tracks your outstanding claims grouped by 30, 60, and 90 days.
There are some misconceptions about these numbers and reports that need to be addressed. First of all, high collections do not equal profitability. “We collect a lot, so the practice must be doing fine!” This is a common idea, but profitability actually takes into account all the expenses that we call overhead. If overhead is also high, then collections simply work to cover the costs of running the practice, and therefore profits are low.
Another wrong concept is that once a system is set up, you can let it run and relax. Controlling and assessing a system periodically is key to ensuring it’s working for your practice.
Finally, some managers believe that the team doesn’t need to know the numbers. The truth is that generally, the best working teams are the ones that are aware of the moving parts in the office. This gives them a sense of the real value of their work and a shared goal to work towards.
Next, let’s discuss the primary responsibilities that a manager has regarding reports.
• It’s vital to schedule report generation. Daily, weekly, and monthly reports need to be programmed and evaluated, identifying potential problems and points of strength. Take a look at your software and how it can best help you to automate this task.
• Remember to celebrate achievements. Keep the team involved in the performance of the practice and be the first to celebrate when the results of hard work show.
• Regularly inspect your reporting systems and make sure to implement adjustments and improvements when you identify the need for them.
2. Scheduling for success
Scheduling is not just another task in your long list of things to do, but it can actually be a fundamental tool that brings success to your dental business.
Setting goals for your schedule:
Setting a goal for your schedule is the best way to ensure it will increase cost efficiency while decreasing stress for you and the staff. Instead of filling up complicated scheduling templates and programming appointment reminders, take a step back and think about what you are trying to accomplish. One of the simplest ways to measure your progress is to define a daily production goal that sums up to your monthly goal and therefore your annual goal. This way you can design your schedule around what is really bringing value to your business.
As we mentioned earlier, involving your team in administrative topics is a good way to improve performance. Help them be on board by meeting every morning to go over the schedule for the day and ask for their feedback when you see them struggling to keep up.
3. Boosting the business with marketing
Remember that your patients are also your customers. A good marketing strategy helps you differentiate your practice by making it clear to potential clients why they should choose your dental practice and what makes you different from the competition. This also helps you identify your target market. Here are a few pieces of advice to tackle your marketing plan:
○ Don’t be reactionary: Do your homework before implementing any marketing solution. When you see a decline in production or client flow, it can be tempting to just buy into a marketing plan and hope it will fix the problem. However, if you don’t do your research first, it could result in money wasted. Not all marketing solutions are equal, and you need to take into consideration the unique demands of your dental practice and the characteristics of your patients before applying any plan.
○ Compare your practice only to itself: All dental offices are different and so are their patients. You have a unique set of target patients, influence zone, and profit potential that is hard to compare to other practices. Doing this can make you feel frustrated and distract you from following the right marketing strategy for you.
○ Know your metrics: Differentiating between new and existing patients, knowing your patient acquisition, retention, and attrition is key to measuring your success with marketing and learning what a new patient is worth.
The American Association of Dental Office Management is the reference entity when it comes to managing a dental office. They offer a Management Essentials Course that we highly recommend as it goes over all of these concepts and teaches you how to bring true value to your dental practice.
The AADOM also recommends dental scrap recycling as a good practice to manage the waste generated by the dental industry. Did you know that Core Scientific is the only dental scrap refinery endorsed by the AADOM?
Core Scientific is a specialized dental refinery with years of expertise in this industry. We are the leading refiner because we offer the highest returns in the industry, and new clients experience an increase of 200-300% when they start working with us. If you want to really excel at managing your dental office, you can start recycling your dental scrap with us today!