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In this new video series, DE Business Lab, Dr. Chris Salierno begins by looking at the “infamous” topic of overhead. Do you hear other dentists bragging, he asks, about their overhead being at 70%? Should those dentists even be bragging?
Dr. Salierno discusses, “What exactly is overhead?” For the purposes of a dental practice, he takes a close look at an article by Dr. Roger Levin in a recentm issue of Dental Economics. Put simply, “Overhead is all of the expenses of a practice, everything the dentist doesn't put in his or her pocket. It’s all the costs of doing business.”
The national average for general dentists and specialists is 75%. That means that for every dollar an office makes, 75 cents goes toward the bills and 25% goes into the dentist’s pocket.
In Dr. Levin’s opinion, that’s way too high. His goal for general dentists is to work toward a 60% overhead, meaning they’ll take home 40% of the money the practice makes. An even better target to have is 50%.
Dr. Salierno said that the second and third parts of this series about overhead will discuss how to break down the different costs of a dental office. If overhead cost is running high, the dentist/boss should know exactly where the expenses are coming from and where his or her hard earned money is going.
Watch more practice management videos from Dr. Chris Salierno at DE's YouTube/Recall Visit page.