3 Great Techniques for Controlling Overhead

Posted by Brooke Milligan on Jan 23, 2017 10:01:14 AM

By Roger P. Levin, DDS

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Compared to other dental and specialty offices, ortho practices tend to have larger staffs, more chairs, and a higher volume of patients seen every day. This means that the total cash flow tends to be relatively high, which can make monitoring and controlling overhead more challenging.

Here are some suggestions for making sure excess spending isn’t cutting into your profits and income.

  1. Don’t try to compensate for inefficiency by expanding capacity. One of the biggest mistakes an ortho practice can make is to try to alleviate a sometimes-tight schedule by adding chairs (and staff, for that matter). Rather than expanding to accommodate peak patient loads during afternoon hours, develop strategies for distributing appointments more uniformly throughout the day. By leveling the peaks and valleys, you’ll be able to virtually eliminate the waste represented by an empty chair or idle staff person. Yes, you’ll need to incentivize parents to accept off-peak morning appointments, typically by offering fee reductions. However, what that costs you in reduced revenue will translate into a greater amount of overhead savings, and your net profit will go up. Making your daily schedule more consistent will also ease the stress you and your team experience during frantic afternoons.
  1. Take a close look at your purchasing procedures. You may already be getting the best possible prices from your practice’s suppliers and labs, but don’t make assumptions. Even if you negotiated an attractive arrangement a few years ago with a single, primary source, you may now be paying more than necessary. All businesses work constantly to preserve and increase their profits. If you’re complacent, you may well be overspending, so sit down with the sales reps, look at the numbers, and ask what they can do to keep or win your business.
  1. Invest in a marketing coordinator. The business truism, “You have to spend money to make money,” is nowhere more evident than in hiring a part-time marketing coordinator (MC). The dollar amount you spend will actually reduce your overhead as a percentage of revenue in two ways. First, a well-trained MC will be skilled at developing and implementing multiple marketing strategies for generating an increased number of patient and doctor referrals. Second, by taking on most of the marketing tasks involved, your MC will enable you to spend more time chairside, seeing all those new patients and pushing up your production numbers.

Ortho practices will always need to contend with upward pressures on the cost of doing business. But, with these and other sound approaches to controlling overhead, you can keep more of what you earn and enjoy greater practice success.

Attend Dr. Levin’s new ortho seminar, Building the Ultimate Ortho Practice, on March 31 in Tampa, tuition-free. Ask your Ortho2 Regional Manager how you can receive an educational grant. Go to www.levingroup.com/orthoseminars to see dates and locations for all ortho seminars in 2017.

Topics: orthodontics, Roger Levin, profits

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