Setting aside money to invest in marketing is a smart move for dental practices. The investment will pay off. But many dentists wonder how to get that money when there are so many other expenses.
Just like equipment and staffing, marketing is an investment in your dental practice. My philosophy is that it’s always wise to spend $1 to make $2. But many dentists wonder, what is the best way to start spending that $1 if their cash flow is weak?
HERE ARE FIVE WAYS TO OPEN UP CAPITAL to jumpstart your dental practice marketing, patient numbers, and production.
Take a practice loan
We all know we can secure a loan to purchase or start a practice. A loan is certainly needed for an expansion or relocation. Many experts say that a practice loan is also a good way to grow and invest in the future. A typical marketing strategy requires an investment of $3,500 to $5,000 per month. If the practice doesn’t have that kind of capital now, then taking a loan for marketing is a great strategy for building it. The right lender can refinance existing debt and even roll everything into one loan for ease of debt servicing.
Borrow from the corporate line of credit
Every businessperson knows the old adage—borrow $1 to make $2. If you already have a corporate line of credit as a safety net, consider using it to temporarily fund marketing. The average dental practice that has invested in a total marketing solution sees a 39% increase in annual production. Historically, practices begin to see a return on investment by month three and a steady return on investment by month six. A robust marketing strategy will more than pay for itself, and relatively quickly in comparison to hard assets such as equipment.
Inspire your team
Realize high returns on marketing and even some savings by inspiring your dental team to get on board. Share your vision and goals with the team, right down to number of new patients needed to reach the total production goal. The clearer they can see the destination, the more likely they are to help you get there. Offer the team incentives. Once a week, give a gift card to the team member who asked for the most referrals the previous week. Offer small monthly bonuses to front office members who schedule the goal number of appointments for the month. Give everyone a bonus when total production goals are met.
Print the practice profit and loss report for the last year. With your practice administrator, go line item by line item to figure out what can be trimmed. A practice’s biggest expenses are payroll, supplies, and equipment. Joining a buyer’s group can help lower those costs. If the practice accepts credit cards, call the bank and negotiate a lower processing fee. Have a dental realty firm renegotiate lease terms, which can often be done at no cost to the practice. Identify the dental benefits plan that you’re currently contracted with that requires the greatest reduction in fee. Consider dropping that plan once you gain the same number of new patients not on it. Even if every patient on the dropped plan leaves, the practice will have the same number of patients, but at a higher fee per patient, and this increases production and profitability.
If you’re thinking of taking a loan, consider applying for one large enough to cover your marketing investment, plus upgrade equipment and technology, refresh the practice interior or exterior, and hire a business consultant. Imagine the difference in production if you did a full facelift on all parts of the practice. In today’s competitive marketplace, the practices that routinely invest in all of these areas have the best success with their marketing programs. After all, your practice values are reflected in everything that patients see and experience, not just in your marketing materials. Put your best foot forward in all areas, and you will attract and keep the ideal patients.