Overhead is necessary but should be used strategically. Most practices operate with an overhead percentage that is 4% to 6% too high. There are many steps available to all dental practices that can have an immediate impact on overhead. A practice with overhead controls in place will be much more profitable in the long term.
Join a buying group. There are many buying groups springing up in dentistry from all kinds of different organizations. When you join a buying group, you are essentially entering the realm of volume-based purchasing. While your practice may not have the volume power to negotiate better costs, banding together with other dentists through an organization will give you that opportunity. Just pay attention to how much the organization is taking in commission against the purchases that are made. Some will be higher than others.
Don't forget that you don't have to be first. Technology has advanced dentistry in wonderful ways, but you don't have to be first to buy the latest innovations in dentistry. Those who are first often purchase technologies at double or triple the cost of what those technologies will be just a few years later. Be strategic about which technologies you are purchasing and don't be motivated to "keep up with the Joneses."
Dr. Roger P. Levin is CEO of Levin Group, a leading practice management and marketing consulting firm. To contact him or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit LevinGroup.com or email[email protected].
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.
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