4 ways to reduce overhead in dental surgery
Running a dentist surgery is a venture with higher than average overheads. The cost of operating the surgery can instantly eat up a significant amount of profits which can be demoralizing for practice managers. To increase profits you could try to increase your workload, but often this is simply not possible when you are already spending every moment possible seeing patients. The other more viable option is to cut costs so that you can keep more of the profits at the end of the month. Here are 4 key ways you may be able to reduce overheads in your dental practice.
Re-evaluate your supplies
It will come as no surprise that a lot of your overheads are in your supplies, but luckily this is one of the more straightforward areas in which you can reduce costs. For example, if you are using supplies that can only be used once and are then thrown away, you could be saving a lot of money by buying reusable versions which are sterilized between uses. You may also be able to reduce the cost of dental supplies by switching suppliers or by negotiating a better pricing structure with your existing supplier. Generally speaking, your supply costs should not take more than 4-5% of your monthly income.
Take a close look at laboratory costs
If you are working with a dental laboratory, you should be paying attention to the costs involved. This does not only mean the standard charges for products, but how much time and effort you are wasting if you have to send products back for having errors. Pay attention to the margin you are making for the procedures which have lab fees associated with them to evaluate whether or not it is worth providing the service.
Reassess your staffing
Paying staff who are not adding value to your practice is like throwing money down the drain. For example, you could be employing 3 people when 1 highly skilled person could do the job. Alternatively, investing in training for your existing staff may give them the tools and knowledge they need to excel. Another option is to introduce a performance based incentive scheme rather than fixing salaries as this encourages staff to perform to a higher level.
Find cheaper premises
Your premises are likely to account for a large chunk of your monthly outgoings. Do you know what the average rate for leasing premises is in your location and whether or not you are getting a good deal? You may find that another location may not only be a better fit but could also save you money on rent. Of course, areas can change very quickly in terms of amenities and demographic which is why it’s a good idea to avoid committing to leases any longer than 5 years.
At the end of the day, reducing your overhead costs will enable you to maximize your profits on a daily basis. Over a year these savings will add up to a significant amount, but you need to ensure that you keep an eye on your finances after making any changes including reviewing your quarterly and annual financial statements.