3 ways to succeed in the new economy
The recent recession has been a wake-up call for dentists. Dr. Roger Levin outlines three action steps you can take right now to put your practice in an excellent position to succeed in today’s economy.
By Roger P. Levin, DDS
Dentistry has entered a new era. The prerecession days of steady growth are gone. In the current economy, only those practices with documented, step-by-step systems will experience increases in production and profitability. Offices that lack appropriate systems will continue to face flat or declining growth in the coming years.
Knowing the state of practice systems, particularly financial controls, can help dentists chart a course for growth during the rest of the year. The following three action steps will give doctors the information they need to better manage their practices:
- Perform a systems audit.
- Develop a comprehensive budget.
- Tighten accounts receivable.
Perform a systems audit.
Over time, most offices outgrow their systems for handling the day-to-day demands of patient care and administration. By conducting a systems audit, dentists can determine what systems should be replaced, what protocols need documentation, and what processes can be eliminated or streamlined. The key to properly managing the practice is implementing effective business systems to achieve desired targets.
Develop a comprehensive budget.
The best way to create a valid budget is to analyze past performance and evaluate how it relates to the practice’s future potential. A budget should not only break down the practice’s total expenses, but also place them into overhead categories, such as staff compensation, lab costs, and dental supplies. By comparing current expenses against past expenditures, dentists can identify where overhead has increased and then develop appropriate strategies for reducing costs.
Tighten accounts receivable.
In a slow economy, it is more important than ever to collect money owed to the practice.
Practices will always experience some level of overdue collections. The key is to keep this percentage of unpaid revenue below 1%. Levin Group recommends that clients do the following:
- Communicate a clear financial policy covering fees, payment options, and collection procedures.
- Collect all fees, including insurance co-payments, up front.
- Follow any payment schedules exactly.
The recent recession has been a wake-up call for dentists. Use these three action steps and put your practice in an excellent position to succeed in today’s economy.
To learn how to run a more profitable, efficient, and satisfying practice, visit the Levin Group Resource Center at www.levingroup.com/gp — a free online resource with tips, videos, and other valuable information. You can also connect with Levin Group on Facebook and Twitter (@Levin_Group) to learn strategies and share ideas.
Dr. Roger Levin is a third-generation general dentist and the chairman and CEO of Levin Group, Inc., the largest dental practice management and marketing firm in the United States. As a leading authority on dental practice management and marketing, he has developed the scientific systems-based consulting method that will increase practice production and profitability, while lowering stress. Dr. Levin has authored more than 60 books and over 3,000 articles. He presents 100 seminars worldwide each year.