Cliff's Notes

The Business of Dentistry

It’s All About the Bottom Line!

Tooth2  Did you ever figure out what your time is worth? I don’t mean what you get paid, I mean what is it worth. If you sit chairside for 32 hours there has to be another 15 to 20 spent working on treatment plans and managing the business end of the practice. What is 15 hours worth in dollars? At $50.00/hour it amounts to $39k/year. If you earn $150k/year, do the math. Now think about the non-revenue generating tasks that you and your team need to preform to fuel revenue production and cash flow. What is the investment value of that time? If you could transfer some of that time to production, how do you think it will effect your bottom line?

Outsourcing is an effective way to reduce time and capture lost value. Remember that word “VALUE” because that will dramatically effect your ROI. Let’s start with the simple stuff like printing and mailing statements. If you need to mail 500 statement, how long does it take your team to print, stuff and stamp? For 55 cents per statement why wouldn’t you use one of the HIPAA compliant services? If it takes 2 hours to print fold and mail, what else could the team be doing for 2 hours? How much does it really cost to do it yourself?

Then there is the most expensive statement you can make to your team “just get me the best price”, When you should be saying is “just get me the best deal”. The best deal is the best value as it relates to the global scope of your business. Here is an example, some of you may know this story: When I ran my own company we used to sell a lot of Crosstex products. They were a great company and we were very friendly with the upper management. They would send their truck to our warehouse once a month with a couple of thousand cases of bibs, cups, saliva ejectors, etc. One day another manufacturer approached us and offered the same deal at $1.00 per case less. Its hard to turn down several thousand $$ per month. However, we were loyal to Crosstex so we contacted them to see what they could do. One week after a friendly meeting at our office, they got back to us with their proposal. They couldn’t give the $1.00 per case but they did offer something else., they would deliver to us once per week. Now we could carry 75% less inventory, turn it over 6-7 times per year, free up a large amount of warehouse space (think about the cost of a sq. ft. of floor space in NJ) and spend less time unloading trucks. That “value” was far more than the money we would have saved.

increase-sales-bottom-line  The reason you automate is to save time and increase efficiency. The most successful organization look for fair market price and discounts but way-in delivery time, fulfilment rates and operational solutions. Many of the dental offices I walk into do not have an inventory management solution. The practices that utilize technology in their purchasing department don’t have items expiring or sitting on a shelf for several months. Inventory carrying cost can be the hidden expense that you need to translate into dollars. Do you know the value of your inventory investment? Do you know how fast it turns over? Have you ever taken a physical inventory?

You run a business and time is money. The more time you spend shopping for the best price, tracking multiple shipments and guessing usage rates, will eat up any savings you think you are getting. Focus your buying power with organizations that can provide “Just-In-Time” inventory solutions and the time saved can be turned towards production. Try Aruba EZ, it’s Free.

Please feel free to contact me at any time with any questions or concerns.

image006 Inventory Management Software, It’s Free!

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March 13, 2016 - Posted by | Uncategorized

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