Six financial tips for dental offices
Dentistry has almost overwhelming overheads. Finding ways to cut costs and better manage your finances can give you an edge and keep you in business, even give you extra to invest in retirement plans. Sound good? You can make it happen. Here are a few financial tips for dental offices.
Play the percentages
When creating your budget, fixed expenses will remain the same, but variable expenses can be calculated by percentage. Using percentages allows you to assess and grow your business without reinventing your budget plan every year. Some suggested percentages are:
- Staff payroll (not including doctors) — 20 to 26 per cent
- Lab costs and supplies — 13 to 17 per cent
- Marketing (depending on your competition) — 15or 25 per cent
- Facility costs — 6 to 8 per cent
Re-examine your daily goals and your expenses if you are exceeding those goals. Try to shave down your percentages whenever possible. The idea is to stay below the percentile mark and set aside savings. Creating and sticking to a budget is an important part of a good financial strategy.
Dispense with disposables
Whenever possible select items that can be sterilised and re-used instead of thrown away. Not only is it good for the environment, you’ll save money on your supplies. Here are some ideas:
- Reusable cloth bibs, cloth sterilisation wraps and pouches, and cloth hand towels in the lavatory
- Stainless steel prophy cups and prophy paste in tubes or tubs
- Stainless steel endodontics suction tips
- Reusable rinse and swish cups
- Autoclavable block bites for the X-ray sensors
Reusable items save you more money each time you use them. The savings extends to hidden costs you might not initially think of as part of the price of disposable items, like the shipping fees each time you order more supplies or interest rates if you pay on credit.
Go for the gold
Selling dental scrap takes advantage of the rising prices of precious metals like gold, silver and platinum, and turn waste into profit. Even a little bit of gold can bring decent returns. What can be sold as scrap?
- Old restorations.
- Metal grindings, polishings and floor sweeps.
- Crowns and bridgework.
- Gold teeth, crowns and fillings.
- Inlays and clasps.
Dental gold scrap can be 10 karat (41.6 per cent) to 22 karat (91.5 per cent) and each piece is a different size. It’s not practical to track daily market fluctuations in the price of gold. Instead, sell your dental gold to a reputable scrap buyer who pays based on the alloy’s metal content. Making regular sales means that fluctuations in value even out over time.
Save your silver
You may already know that you can recycle the lead foil from x-ray film, but did you know you can also make money from selling old film and recycling the fixer and developer solutions? Silver recovery units use active ion displacement to remove silver from spent silver thiosulfate solutions, rendering the remaining fluids non-hazardous. A basic device costs about £80 annually but should still turn a small profit from the sale of recovered silver.
Organise your ordering
Know where all your supplies are hiding to prevent redundant ordering. Over-ordering supplies can leave money sitting on your storeroom shelves. For the same reason, think carefully about what you order in bulk. Placing smaller orders more frequently might better keep pace with your finances at some stages. Talk with your supply reps about what you’re ordering. See if you can find affordable alternatives, and don’t be afraid to ask for lower prices or freebies. If you purchase most of your supplies through one company, ask about additional loyalty discounts.
Ask an adviser
There are so many mistakes you could make when it comes to financial planning for your business and yourself. A financial adviser can help you avoid those mistakes. When looking for a financial expert here are some questions to ask:
- Do they have other dentists and medical professionals as clients? Select someone familiar with the specific problems and benefits of your field
- Do they earn commission or are they fee-only? Look for fee-based advisers rather than commission-based advisers with divided interests
- Do they keep records? What happens to your business if something happens to your adviser? Find someone with a good back-up plan to provide security and protection for you
- Do they have professional credentials, and what’s their educational background? Different licences and credentialing for financial advisers means that some have nothing more than a weekend seminar and a fancy title. Ask for a fiduciary who will put your interests first
Assemble a team of people who can help you run the business aspects of your dentistry practice in a more efficient way. Financial planners, bankers, attorneys, accountants and practice management consultants can all offer wisdom and experience to help you save money and succeed.
There’s no guarantee that you will always make the right financial choices. However, if you are willing to learn as you go along, learn from your mistakes and from others, then you put yourself ahead of the game. In the final analysis your business needs to pay for itself and provide a living for you and your employees. How you choose to do that will be unique to who you are and what you value. Find the ways that work best for you.
Do you have any more financial tips for dental offices? Tell us in the comments below.