Many dentists may think that if they just concentrate on providing their patients with excellent care, the business side of their practices will take care of itself. However, if they want to ensure that they’re able to retire without any financial concerns, they must pay attention to the factors that affect their bottom line.
Pay attention to your production. Production, more than any other single statistic, will give you true insight into your practice. If you can demonstrate three years of production growth -- and I am referring to adjusted production after insurance write-offs -- then that’s a positive indicator for practice value and practice performance.
Don’t forget collections. It is fine to have outstanding production, but you have to collect. I have received many phone calls from dentists who want to talk about improving their practice because they have a $1.3 million practice, but they only collect $900,000. I politely explain to them that they do not have a $1.3 million practice, they have a $900,000 practice. Your practice revenue is defined by what you have, not by what you’re owed.
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].
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