If you want to become the Alpha Predator Practice® in your area, you need to reinvest a substantial amount of your profits back into growing your business.
What we’re talking about when discussing dental profit is:
It’s what you do with this profit that matters. Whereas some owners will want to pay themselves more, the Alpha Predator Practice® reinvests profit to grow the business.
Growing your profit isn’t about focusing on cutting costs. Unless your business has completely maxed out its operational capacity, you will almost always be better off focusing on growing your profit through scaling up rather than focusing on reducing costs.
As an example, if we look at corporate dentistry, they have the scale to lower their costs, but that’s not the reason they’re a threat to some dental practices. Corporate dentistry can be a threat because they have effective and efficient business systems that are generating a profit, and that’s where you need to challenge them.
The magic of scale is partly how it affects your profit margin by reducing the effects of fixed costs. Variable costs including lab fees and materials will increase with your volume of work, but your fixed costs can be spread out across a much broader group of patients. The result is a healthier bottom line.
The larger your practice gets, the more money you can put into marketing. This means you’ll win more patients, taking them from your competitors. It’s a snowball effect, and your increased revenue means you can also invest in equipment, technology, training, and recruiting more staff.
Growing your practice as a whole is more important than focusing on providing “high-end” procedures. Many consultants will insist you focus on the more expensive services - Deep-scaling, cosmetic surgery, dental implants, and crowns.
It’s actually much more important to get the basics of your dental business right by growing through scale, and putting the business systems, processes, marketing, and staff in place to make that work first.
Actively investing in your practice’s future will help you scale more quickly, make you competitive, and let you sustain medium- and long-term growth. This is a compounding effect - The more profit you put into your dental practice now, the greater its valuation and your future rewards.
Many dental consultants traditionally recommend focusing on the top end of the market - Expensive treatments like cosmetic dentistry, dental implants, deep-scaling and other high-revenue procedures. These procedures can be so lucrative, that you don’t even need an efficient business to generate a profit. However, there’s a couple of problems with this approach:
It’s more important than ever you run an efficient and sustainable business that can scale in the basic treatments before you worry about generating incremental revenues from higher-end procedures. The same business processes you put in place to create a strong foundation now will also help you in future when you expand your higher-end procedures.
Focusing on the whole spectrum of dentistry lets you grow more quickly. It’s about scaling across all of your services and treatments, from simple hygiene cleans and checkups to specialized techniques. There are several other benefits:
Here are some potential options:
The best way to grow your space is by opening new operatories or exam rooms. You have several options for this. Depending on your current arrangements, you could:
Increasing your space will:
Hygiene is key to growing a dental business. With hygiene growth, you’ll grow your whole patient base, giving you the opportunity to see more patients. They could come back for needed treatment or for for elective treatments such as Invisalign, teeth whitening, or cosmetic procedures. Growing hygiene also helps to increase your referrals. Because patients like to be seen at a convenient time for them, extending the hours when they can come in for a hygiene treatment will put you ahead of your competitors.
Increasing your space and your staff go hand in hand. As you open up more operatories, you’ll need dentists and hygienists to staff them, and other staff to support them. A larger employee base gives you more flexibility and the ability to add new business processes that improve customer service.
Areas you can focus on include:
Improving your processes and technology means making your business processes faster, more efficient, and easier to use. For example, you might invest in a better patient management and onboarding system, or streamline how you deal with insurance payments.
Good business processes, working across your whole business, can help you manage everything more easily and ensure everything is going as planned. A dental dashboard can be very helpful in gathering all your data together and help you to make informed decisions.
When you get large enough, it can even be worth automating or outsourcing some of your business processes entirely, so you don’t need to worry about them. Outsourced companies can provide flexibility and expertise.
You can’t market your dental practice in isolation. As you grow, you’ll be able to spend more on marketing, especially local marketing. Getting good reviews and ads in local media will significantly enhance your reach and people’s awareness.
You will need to combine successful marketing with better sales and onboarding processes to make it quick and easy to get patients through your doors.
When it comes to managing your insurance, there are several ways to approach it:
As you can see, growing and scaling will take time, effort, planning, and resources. Ultimately though, the payoff is more than worth it. As you reinvest in your business, you’ll increase value, both now and in the future - That’s good for everyone.