There are certain fundamental business principles that every dental practice can follow to increase the odds of having a successful year. Each year we are full of hope and optimism that the new year will be better than the previous year (even if the prior year was excellent.)
Set 10 goals. Levin Group recommends that every practice have 10 goals each year. Identify three large goals, three medium goals, and three small goals. The 10th goal is referred to as a BHAG, which stands for a big, hairy, audacious goal. This was a term coined in the 1980s and is an actual business term that means the big stretch goal that will be particularly challenging and hard to accomplish. By breaking goals up into these categories, the practice is more likely to improve performance in major and minor areas with one identified stretch goal to work towards.
Don't forget to reevaluate practice overhead. Practice overhead is critical. A 1% decrease in overhead is the same as achieving a 1% increase in profit. We've discovered that most practices are 4% to 6% too high in overhead due to the staffing shortage in addition to covering increases in labor costs and other areas of inflation. A 4% increase in overhead represents a loss of $32,000 of bottom-line income on an $800,000 gross revenue practice.
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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