What many newer dentists don’t consider is that those seemingly insignificant expenditures and special purchases here and there can quickly bury them in unnecessary debt, particularly during difficult economic times. Worse yet, it can set the stage for serious monetary struggles throughout their careers.
The key to avoiding financial troubles is to implement a strategy to control overhead from day one. New equipment purchases should not be made unless they will increase production and revenue flow immediately. Staff salaries cannot be increased unless the practice is on solid financial footing. Patients must be given financing options that encourage them to pursue treatment promptly. And specific budget targets must be established to help the office reach the overhead benchmark of 55% of collections in the coming year, specifically:
Dental supplies – 5%
Office supplies – 2%
Rent – 5%
Laboratory – 10%
Payroll – 20%
Payroll taxes and benefits – 3%
Miscellaneous – 10%
Unfortunately, setting the goal to achieve the budget targets is the easy part. Reaching it is the challenge, as many dentists struggle to develop the systems that will enable them to realize those benchmarks. Don’t go it alone, seek help.
For additional assistance please visit our New Dentist resources page under Practice Management at http://www.thenewdentist.net/resources.htm