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

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