Are you looking to grow your dental practice? Perhaps you’re trying to add more patients, create demand for new services, reduce overhead – or all of the above.
Many factors outside your control will influence the selling price of your practice, whether it’s next year or five years from now. Factors include the quantity and quality of your competition, demographics, property taxes, and more. Do what you can now to safeguard your dental practice’s value.
Because there are so many options to grow your patient base and increase profitability, we’re only focusing on a few key areas. Marketing a dental practice takes into consideration many different variables, not the least of which are your goals and budget. To make the most of your time and money, we suggest starting with these areas.
Market Your Practice
What kind of patients do you want to serve? The answer to this question will determine your marketing strategy. Focus on the kind of work you have the capacity to do, so that it’s work you enjoy doing, and is profitable. Then, develop your marketing message. This should be a series of compelling, value-oriented stories written specifically for your ideal patients.
The marketing message should help new patients see how they fit into your practice, and the process by which they do that should be simple. Make it easy for them to contact you and schedule an appointment: online forms, automated response systems, and an updated website that’s user-friendly will help move prospective patients through the sales process easier and faster.
Finally, consider how much and where to invest your marketing dollars. Plan to allocate at least 2-3% of your total revenue to marketing. Online marketing, such as e-newsletters, blogs, search engine optimization, Google ads, and social media should be a big part of your advertising plan. Don’t forget about traditional marketing tactics, like direct mail, events, and newspaper advertising. Find out where your ideal patients are, and market to them there.
Also, remember the power of positive online reviews. Make sure your dental practice is reviewed on Google, Yelp, and Facebook. Make it a point to ask patients for a review of their experience before they leave their appointment.
Identify Profit Areas
To do this, start by identifying your most profitable procedures. In most practices, these will be restorative services. While restorative dentistry may not have the highest billings or be the most exciting, restorative services are the most common. So become very efficient at them. Know how long it takes you to service a patient who needs a filling.
Potential buyers will probably expect you to know this anyway, so get a head start!
Efficiency is profitability. Fillings and tooth repairs are usually not complicated, and if you perform great restorative services for your patients, that will form the foundation for up-selling.
Do you offer teeth whitening services? Tell your patients during their bi-annual exams. Does your hygienist specialize in pediatrics? Talk about it. Consider offering preventive services in a package, then advertise it as a special promotion. Packaging services make it easy for your staff to talk about dental care in a way that patients will understand. For example, a package could consist of replacing old fillings, a fluoride treatment, and a whole mouth sealant for one set price. Look at the dental insurances your practice accepts for ideas on what to include.
However you go about it, identify services you can up-sell while patients are already in the chair. Look for services you don’t perform as often, procedures you want to promote, or when you add a new associate or hygienist if they specialize in new or different areas. Focus on the benefit to the patient, and make up-selling part of your regular treatment plan.
Although restorative dentistry is the foundation of most dental practices, consider adding a specialty. Serving a particular dentistry area will allow you to better control market share, attract specific patients, and charge more. Specializations as part of an otherwise general dental practice can include pediatrics, endodontics, cosmetic dentistry, periodontics, prosthodontics, orthodontics, and oral and maxillofacial surgery. Think outside the box: what do your patients need that you can offer better than anyone else?
If you’re not already certified in one of the above areas, look at your competition and the demand for specialized services. Fill in gaps in dental service and specialties your competitors don’t offer. Not interested in additional training or certifications? Consider adding a dental specialist to your team.
Above are strategies you can use to influence the market and attract new patients. Looking within your practice can be just as important, as bottom line expenses are often a quicker way to higher profits.
Monitor Management Expenses
Managing the bottom line can have a substantial impact on your dental practice’s profitability, too. You have a limited amount of time, so how do you know where to start? According to Dentistry IQ, there are four numbers you should track: staff expenses, lab costs, supplies, and facility costs. Monitor your spending in each area and ensure it doesn’t exceed:
- 25% for staff expenses;
- 7-9% for lab costs;
- 6-8% for supplies; and
- 5-7%84 for facility costs.
How well are you managing expenses in these areas? Keeping controlled costs in check is vital for a thriving dental practice. When you know what you spend on a monthly basis, you can implement a plan to manage or reduce these costs. The result is a healthier bottom line.
What if you’re planning to retire soon – why spend the time and money on growing your practice? A thriving, profitable dental practice makes for a more appealing sale. So even if your goal is to retire in five or ten years, you’ll get a better valuation and sale price than if you hadn’t spent the time building your business.
For questions on how to improve your bottom line or suggestions on increasing the overall value of your dental practice, contact Ellen Dorner today.