Set your New Year Practice Goals Now. Goodbye 2021 – Hello 2022!

Twelve months ago, I was very happy to be seeing the end of 2020.  We thought 2020 was bad, with the summer’s horrendous bushfires soon forgotten by COVID-19 and lockdowns.  We wondered what else could go wrong, and, in reply, 2021 brought us floods, more COVID lockdowns, mouse plagues and an earthquake in Victoria.  Bring on 2022!

You would be forgiven for not looking at business planning over the last two years.  A lot of my clients have been flat out getting to see their patients and making the cashflow stretch during lockdowns.  However, now is a good time to start planning for what 2022 will look like.

When we talk with our dentists about improving and growing their businesses, the goals people come up with are varied.  It could be growth in the practice turnover, adding a new dentist/hygienist to free up principal time, using chair time more efficiently, converting more new patient inquiries into actual appointments, keeping practice costs under control or getting your team onboard to work together on practice goals.

Regardless of what the improvement is, you need information and data to look at. You need to know where you are now, how to measure improvements and set a goal to aim for.  For some clients with good systems, it’s easy to pull out historical information and use that to plan for business improvements in the future.  Other clients have to start from scratch.  With computerised practice systems, you can pretty much get the data you need, it’s just a matter of knowing what to look for and how to get it.  You don’t even need to do it yourself, ask the practice manager or your nurse to do it.

There are lots of articles about dental practice KPI’s (Key Performance Indicators) and good practices run reports and work these out on a regular basis to track how they are performing.  Most dentists would know the following basic KPI’s:

  • Weekly/monthly fee collections.
  • Production per dentist/hygienist hourly/daily/weekly/monthly.
  • New patients per week/month.
  • Active patients.
  • Average production per patient.

As well as tracking the numbers, and comparing to past practice performance, you also have to set a goal to work towards!  We’ve seen clients really boost practice performance by setting goals, not just looking at the numbers.  It’s one thing to run the numbers, but if you don’t use them to help you improve it’s a waste of time.  Think about the following things I’ve seen my clients do in their practices.

  • Set weekly fee targets and link it to patient treatment booking times, so you maximise the dentist’s available time each day. An extra $550 per week is $28,600 per year.  That pays your maximum $27,500 super contribution without you having to think about it.
  • Monitor why patients are cancelling at the last minute and put a plan in place to avoid the causes in the future – mainly they forget! A missed appointment is profit straight off the bottom line.
  • Look at how often treatment plans are taken up compared with presentation. If the take up is not high, maybe you need to work on your soft skills to get the conversions.  This could make a huge difference for younger dentists.
  • Have a look at average production for established vs new patients. Are you offering all the existing patients your full suite of services?  You do a full treatment plan for new patients – do you do it for existing patients that you might not have seen for some time?
  • Will spending money on new equipment, a chair, OPG etc. pay for itself? What is the utilisation of your chairs in the surgery?  How many patients do you refer out for x-rays?  Mostly these things pay for themselves.  A busy professional doesn’t have the time to leave your surgery for an x-ray and won’t baulk at the price internally.  Two chairs mean you can see more patients in a day.
  • Check your fee schedules against the ADA prices. When was the last time you really reviewed fees and put them up?  What are your most utilised item numbers and are they priced appropriately?
  • Do you discount? Track them and see what they are each week/month/year.  For larger practices, track it by provider.  I’ve been talking to my clients about this for years.  Patients think dental work is expensive.  Unless you tell the patient that they are getting a discount, they probably won’t even know.  A discount is profit gone straight off the bottom line.  If you are going to give it up, make sure the patient knows about it or stop doing it.
  • You don’t have to do it all yourself! It can be good for the staff in a practice to see the practice has goals and they should be helping you to achieve them.  Once you work out what KPI’s you want to track, you can delegate the report running and comparisons.  It could be something you talk about in your weekly huddle.  Set goals and track them with your staff, so that they buy in and can see results.  Celebrate hitting the goals.

Whether you start small or go big, set your goals for 2022 now and you are more likely to have a great year.

By Alison Lacey, Chartered Accountant and Director

This article first appeared in the December 2021 issue of the News Bulletin, published by the Australian Dental Association.

This article is designed to provide generic information only and should not be viewed as a recommendation to act or financial advice. Individuals should seek advice from a qualified adviser to ensure their actions are commensurate with their financial needs and requirements. Whilst every effort has been undertaken to ensure accuracy of information at the time of publication, the information contained within the article may have changed prior to and subsequent to the article’s publication.

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