Throughout my years of Invisalign sales, I came across something over and over that baffled me; no one liked to discuss profitability! As a professional sales person, working really hard to build a solid financial future for myself, I found this puzzling. Why was the mention of making money such a taboo in the dental field?
Upon further reflection I came to understand that discussing profits in the medical field was akin to discussing politics or religion in social circles- you just don’t do it. It is ingrained in us that certain topics are simply off limits. You don’t talk about politics, you don’t talk about religion, and you don’t talk about making money when you are in a helping profession.
Had I not received my M.B.A. and delved deeply into this exact question, I probably wouldn’t discuss profitability so openly either. I did get my M.B.A. though, and I think that those of us in the dental profession need to reassess our conception of profitability.
Dental Practices Have High Overheads
Profit stems from a basic equation: Revenue-Expenses=Total Profit. There is no shame in openly discussing that. In the dental profession especially, it needs to be discussed.
Dentists are in the unique position of both providing medical care and running a business. This contributes to the taboo aspect of profitability. You went to school to learn how to fix teeth, not to run a business. But if your business isn’t making a profit, your opportunities to fix teeth will dwindle and disappear.
Dental practices have a very high overhead. Therefore your revenue is crucial, not just to keeping your business actively running, but to making a profit. With the expenses of running your office with ever-changing equipment and technology, your revenue needs to be consistent.
Profitability Leads to More Revenue in the Long Run
If you’re not using the latest technology you’ll begin to lose patients. And you can’t afford that new technology without having made a profit first.
So you see, profit isn’t about making tons of money and taking lavish vacations (though that’s ok too!), it’s about having the money to keep up and improve upon your business.
In the beginning stages of starting your practice your profits will be less. As your business begins to flourish you will see more revenue, meaning more profits. This will lead to better equipment and technology, which leads to more revenue. Then you can start taking those lavish vacations!
How to Make Your Dental Practice Profitable
There are some very basic things you can keep in the forefront of your mind in order to achieve profitability in your practice.
First of all, remember that profitability isn’t taboo; it’s how you stay in business, and are able to provide the best possible care for your patients.
There are two things you can always take into accountability when you are making financial decisions about your business. Raise your revenue, and lower your expenses. This is easier said than done of course, but the concept is simple, and the results are tangible.
When you consider raising your revenue, consider each procedure that you offer patients. Which procedures offer the most compensation per hour? How can you draw more of those procedures into your office? Is there new technology that can help you do so? Invisalign aligners offer a great way for dentists to make a profit.
Lowering your expenses can be more challenging given the equipment and staff you need to run your business. There are ways to cut overhead though, and with the right mindset and business plan it will become second nature.
If you’re looking to make your dental or orthodontics practice more profitable, give us a call! We look forward to helping you streamline a business plan. At ClearEdge Innovation we are experts at helping dental professionals market their practices in order to achieve maximum profits.
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