Cliff's Notes

The Business of Dentistry

Do You Know Your Silent Partner?

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Yes you have one, maybe several. Any outbound asset that is not directly monitored by daily operations and not subject to checks and balances (digitally) can be a “leak in the ship” and a silent partner.

When a small business like a dental office hears the term “silent partner” they think about embezzlement. Embezzlement does becomes possible without checks and balances but we will leave that discussion for another time. It’s time to look at inventory, work flow, and the all to elusive cash flow.

The Inventory: Inventory time management is one of the most difficult tasks a business has. It is not revenue generating but is an absolute necessity for any on going business. However, you need to take this necessary chore and make it have a positive impact on the overall operation. When you get right down to basics all businesses do the same thing, they buy and sell goods and services.

A very wise man once told me “don’t fall in love with your inventory”. I see clients attend year end trade shows to get great deals on a full year supply of certain products. How wrong is that? By putting large quantities on the shelf you are tying up cash, and cash is why you go to work. If you work with a quality vendor (there’s that word “quality” again) you would already have the price and get next day delivery so buy what you need when you need it. If you buy a quantity of product that last more than 90 days the additional savings need to be a minimum of 10%. Ask your accountant about inventory carrying costs. Automated inventory control is simple and is provided at no cost by quality vendors. Many of my clients use the Aruba Inventory Management System. Good software simplifies the process and the “usage” reports will help you make an informed decision when a “bulk buy” opportunity arises.

The Work Flow: How smooth does production move through your organization? Are you constantly looking over peoples shoulders to make sure they are doing things correctly? As the healthcare world continues to evolve the work flow of any business needs to streamline and automate. This requires change and investment. Utilizing technology and automating systems turns operational time into productive time. As an example, how long does it take your office manager to prepare the morning huddle? Some practice management software (i.e. Dentrex G6) do it automatically saving 15 minutes of business office time. Do that in 4 areas and that is 1 hour. What is the true cost of an employee? Investing a little money in work flow technology can have a huge ROI. Dental offices can now have their large equipment (i.e. compressor, vacuum, X-ray) monitored by software with notification of required maintenance. Hey, your car does it…

The Cash Flow: This is what it is all about. Another term I like to use is “disposable income” because that is what will result with a well organized operation. Cash Flow is the blood of any business. The better the cash flow the healthier the practice. Properly implemented procedure and protocol is essential for the survival of any modern healthcare facility. Please feel free to contact me with any questions or concerns.

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August 17, 2016 Posted by | Uncategorized | Leave a comment

If You Want People to Help You Make Money, You Have to Let Them Make Money!

negotiate Like many Americans I find myself ordering things on-line and looking for good deals. Amazon continues to amaze me with the quality of there distribution and how they handle returns and complaints. However, they are not always the lowest price. Amazon chose a business model of quality and service and is constantly attempting to improve on their “customer experience”. On the other side of the equation are the big box stores such as Costco, BJ”s, Sam’s Club, etc. that chose quality and price. The low “PRICE” is what determines the level of service.

Ask yourself what your dental practice focuses on. Quality is not the question, its all about the service and the price. The lower your price the less service you can afford to offer or the harder and longer you work. Also, a low price decreases the value of your service. However, on the other hand , if you price your services according to your quality standard of care, your patient base will recognize your value. Most people look for value in the services they buy.

Your clinical skill is your quality and the “patient experience” is your service. I have several clients that are afraid of raising their fees for the fear of loosing patients. Well that may be true of a small percentage but are they the type of patients you want? They are looking at price. By increasing your services and enhancing the patient’s experience, you can increase your fees at a slow rate. Quality patients will recognize your value.

Now for the “making money”…. Quality & Service, when working together, overcome price. However, to make it work you need to share in the cash flow. What that means is providing a reason for team members, vendors, consultants, etc. to provide you with the highest quality of service so that you can maintain the quality of your management and clinical production.

The Team … One of the hardest situations for a manager is how to evaluate a long time employee for a raise. Employees can price themselves out of the market so how do you maintain quality and service when that time arrives? Simple, stop giving raises! Start establishing goals and reward with a % of the increase as a bonus for production. The team is now incentivized to help you make money. That’s how you get people to help you make money.

The Vendors … A well organized business of any size can be a little powerhouse, focus the power. Chose vendors by what they can offer to help you be successful. The quality and service they can provide allows you the opportunity to streamline your organization to maximize production. You need to go into these relationships with your eyes wide open. Its not about the price, that can always be negotiated with an agreement of an on-going relationship, its about the quality of the services being provided. Choosing a vendor is an investment, what’s the ROI?

The Value … I can’t tell you how many clients tell me that they changed accountants because the accountant was too expensive. That may be one of the most foolish statements a business owner can make. What type of services were they getting? Those clients chose price over quality and service. If price takes over the conversation, quality and service will be reduced as will overall revenues. You have no expenses, only investments in quality. What’s the ROI?

Price– Quality– Service … Pick 2 because you can’t have all 3… Quality organizations associate with other quality organizations. I prefer quality. If I can help a client be more successful and do more dentistry, then they will welcome more of my services, everyone wins with quality & service, especially the patient.

 

August 11, 2016 Posted by | Uncategorized | Leave a comment