Few dental schools offer an adequate amount of courses regarding the business and financial aspects of their profession. As a result of the lack of training in these vital areas, many dentists start their careers behind the eight ball. This article addresses how important it is to have a solid plan in place before the practice opens its doors.
Areas to consider before opening your dental practice:
Dental service pricing: This can be the most difficult area to assess, but obviously one of the most important. How you price your services in comparison to other dentists in your market can in large part determine the success of your practice. A major point to consider is that patients will pay more for perceived quality. If you’ve established yourself as a professional that offers consistently good service, stands behind your work, and communicates well with your patient base, you can generally command prices in the upper range of your market. If you are just starting out, pricing should be on the lower end until you’ve gained credibility in the community. However, setting your prices at the very bottom range could cause a negative perception.
Staffing: You obviously must have a handle on your labor costs, so it is imperative that you analyze the proper amount of staff to properly service the patient’s needs. Labor rates in your area will for the most part dictate the amounts per hour you’ll pay for hygienists, dental assistants, and office personell. But establishing a good relationships with local colleges that require students to complete an internship program at a dental office as a part of their education is a way to save labor costs. In addition, the intern program not only gives the students hands-on experience, but it also gives me the opportunity to assess their skill level and passion for dentistry.
Billing and collections: As cash flow is the life blood of a dental practice, a strong billing and collections system is an absolute must. Left in the hands of someone who doesn’t have the competence or motivation to stay on top of this vital area, you could literally be doing a lot of dental work for free. Whether you outsource or keep the billing and collections in-house, you must feel confident that all procedures and being coded properly and that past due amounts are being worked. Although you want to keep your costs to a minimum, this is an area where you typically “get what you pay for”. Delegating this important function to inexperienced and probably less expensive per hour employees can cost you dearly in the long run.
Marketing: When it comes to business, proper marketing is key for success. That’s why whether you choose to employ direct mail, internet marketing, yellow page advertising, or other mediums, your message must be consistent and appealing. It must also break through the clutter of all the other ads out there. Let’s face it: If you send out a postcard to everyone in your market that just introduces yourself and gives the address of your practice, it’s probably going to end up in the trash. You must give them a reason to come to you instead of the dentist they already use. You can do this by including some type of call to action, such as “visit Dr. Jones for a pain-free dental experience”.
The old adage that “failing to plan is planning to fail” definitely applies here. Spending an adequate amount of time to come up with a game plan for important operational, financial, and marketing policies before opening a new practice or acquiring an existing one can result in years of success.
Dental Practice Cash offers a wide variety of financial services, information, and products for the dental professional. Call us at (417) 849-7394.