What makes a dental practice successful?
It could be having a large number of patients who are satisfied with the service provided. It may be meeting specific financial goals.
One of the most important ways to look at the success of a dental practice is to consider the competition.
What factors can cause a practice to fall behind other providers in the area? Sometimes, it comes down to dental practice management. Costly mistakes and unfavorable consequences can reduce the competitive edge within any company.
Here are some common mistakes dental practice owners make that limit their long-term success — plus, how to avoid or combat them.
1. They Fail to Think Like an Owner
For dental practice owners, patient care is naturally a top priority, but it’s equally important to think like a business leader.
Running a successful practice requires more than clinical expertise; key business decisions impact all aspects of the operation, from finances to patient care. Business-minded decisions should balance profitability with maintaining high standards of care.
Dentists who fail to adopt a leadership mindset risk undermining either their financial health or the quality of their patient services.
2. They Don’t Hire Well
Successful business owners hire well. That’s a simple statement but a common concern.
One of the biggest challenges of running a dental practice is ensuring that each employee not only performs their role effectively but also represents the values and image of the company.
Who you hire for various roles in your dental practice has a direct impact on the performance of your business. Mistakes in hiring the wrong employees can lead to costly issues down the road. Studies have shown that one-third of business failures can be traced back to poor hiring decisions!
As a business leader, it’s crucial to not only hire the right staff and office managers but also the right vendors, consultants, and advisors to guide your practice. Just as you invest in continuing education and equipment to enhance clinical outcomes, similar care should be taken when investing in your employees.
How do you hire well? Learn from previous hiring problems and mistakes. Hone in on what your practice specifically needs. Look beyond just a smile or a certificate. Seek out professionals with proven track records and dedication.
Whether you’re expanding, filling vacant openings, or opening a dental practice from the start, consider the value of using a vetting service to minimize the wrong hires. This investment may help to improve overall costs.
Effective hiring practices focus on finding the right fit for your organization. If hiring decisions are challenging, consider partnering with a company that specializes in best practices tailored to your needs. You don’t have to handle everything on your own.
The Dental CFO can provide the guidance and support necessary to help your business grow. Let our team assist you in making informed hiring decisions today for future success.
3. They Don’t Know Their Numbers
When it comes to your practice, you can’t manage what isn’t measured. What should you measure? How do you measure? It’s all about key performance indicators (KPIs).
KPIs are specific metrics that provide insight into how well a business is performing. Just as dentists use lab results to evaluate patients, KPIs help assess the overall health of a dental practice.
There are many KPIs to consider, and having clearly defined metrics as a baseline allows you to track progress toward goals. By regularly monitoring KPIs, you can determine if your company is on the right path or needs improvement.
Some KPI examples that may apply to your dental practice include:
- Practice production
- Collections
- Practice profit
- Percentage of active patients scheduled
- Overhead
- Average production per patient
- Average production per new patient
- Case acceptance rate
- Number of new patients
- Patient attrition rate
- Staff labor percentage
Consider this: The average dental practice overhead is 65%. This includes every cost not associated with the dentist’s compensation, such as rent or mortgage, supplies, equipment, employee compensation, and more.
Review your current dental practice overhead. Is it significantly higher or lower than the figure above? If you haven’t calculated this percentage yet, now is the perfect time to start. Not only should you compare your overhead to the average, but you should also monitor it over time to identify changes and trends in your expenses.
Lowering costs and improving profit margins are crucial for long-term success. Without a clear understanding and focus on cash inflows, outflows, overhead, payroll, and operational costs, your business could face significant financial risks.
These factors heavily influence profitability, and many dental practices lack proper systems to track and manage them on a month-to-month or quarterly basis. Developing a process to consistently monitor these areas is essential to prevent unnecessary financial losses and improve your bottom line.
You may feel that prioritizing profit isn’t your focus, but without tracking key financial figures, it’s difficult to stay competitive long-term. Competitors with more financial resources can invest in advertising and branding, which could diminish your practice’s sustainability and hinder reinvestment in patient care.
Ignoring the business side can have serious consequences. Understanding how to manage your practice using KPIs and financial insights is essential to not only improve the clinical experience but also build a strong business foundation for growth.
4. They Fail to Plan
You’ve probably heard the phrase, “If you fail to plan, you plan to fail.” This rings true for any dental practice lacking a core plan for all aspects of the business. Defining a specific end goal is crucial; without it, you can’t prioritize the steps needed to achieve that goal.
Starting with a solid strategic plan is essential, as it will help you create an actionable list of goals that adhere to the SMART criteria.
All goals should follow the SMART format to help you maximize resources, track progress, and identify whether you are on track or falling behind. This clarity enables you to make informed decisions for practice improvement, enhancing your overall strategy.
5. They Fail to Seek Good Advice
One of the most detrimental factors leading to dental office failures is the lack of insight and guidance in practice management.
While you spend years honing your clinical skills, others specialize in providing the support that business owners need. Without this guidance, practices risk significant losses.
Investing in quality advice and consulting — both in practice and financial management — is crucial for long-term success. Collaborating with dental practice management consultants can empower your organization to achieve more and maintain profitability.
Key Takeaways for Running a Successful Dental Practice
- Think like a business owner: View your practice as a growing entity, not just a clinical operation.
- Invest in human resources: Select the best talent, including consultants and vendors.
- Establish and monitor KPIs: Use effective practice management software to track progress.
- Create a resources-maximizing strategic plan: Set SMART goals and track them over time.
- Seek expert advice: Focus on delivering quality patient care while letting professionals assist with business outcomes.
At The Dental CFO, we equip you with the tools and resources necessary to effectively manage your entire business — not just the clinical aspects. Contact us today to discover how we can support your practice.
