Dental Practice Financing

@Dr Bhavdeep Ahuja
Before the Costs in Dentistry, we need to understand about the GPM – Gross Profit Margin.
The profit margin of the dental practice you are considering should be at least 60% (not GPM but PM).
A 60% profit margin (or 40% overhead) is close to the average (ideal) profitability of dental practices.
If your practice is below that number, it could be a sign the practice isn’t as well run as it should be.
Considering your prime (direct) costs enables you to lower your fees to remain competitive or raise them to recoup profit that you have been leaving on the table.
Gross profit margin is an underutilized tool in managing profitability and colleagues hardly know about it.
But if they learn deeply about it, gross profit margin can easily be helpful for setting clinic charges for basic and simple procedures but complex ones as well.
Because of this ignorance, colleagues for complex restorative and implant cases, just take an estimate of the lab fee and multiply it by a certain factor to determine a fee for the case.
That calculation does not take into account the direct labour or materials, so it is not an accurate measure of profitability.
A better approach to setting fees is to consider the average fee for a service in your area and weigh that against your own gross profit margins.
A dental clinic down the block might be charging more for a given service, but that doesn’t mean it is more profitable.
Although a dental practice can be incredibly successful, there is no denying that it costs a lot of money to run.
If you are not careful about managing your finances, you could actually find your practice losing money, no matter how good your clinical skills and how long your patient list might be.
Though it can be challenging, reducing overhead by just 10% can make a huge difference in your practice’s profitability.
To learn more – See this wonderful presentation.

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@Dr Bhavdeep Ahuja
“Costing” is really important for us to know.
Without that – we are treading in the dark regarding profitability.
Just looking at the direct cost of the procedure to calculate PROFIT is a GRAVE mistake.
There are more than 25 costs applicable in any business.
Do all of them apply on to us?
No not all – but at least 16 of them surely do apply on to us in Dentistry.
So, what are the Costs Involved in Dentistry?
Those we should be worried about and take into Account – When Calculating the same?
So that, we don’t ever DARE to Charge Low?
Because when the carry home is less, we keep on wondering – Ki Kamaaye toh thei – Paise Gaye Kahan as like Inflation – Indirect Costs keep on eating into Practice.

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DISCLAIMER: I AM NOT a financial adviser, This video is for education purposes only.
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Content
00:00 Intro
00:30 Customer Experience
02:22 Share Price History and EPS
04:46 Cyberattack
05:54 COVID Impact
06:33 Profitability Improvement & Debt
09:20 Referalls and Concessions
11:10 Competitive Space
12:40 New Business Channels
14:28 Retail Products
15:18 Future Growth Opportunities
17:30 Reputational Score
19:10 Recurring Revenue
20:10 NBC Lawsuit $2.8bn
21:40 Outro

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Check out our playlists for more videos:
Start a Dental Practice Playlist https://www.youtube.com/watch?v=Px55Hu4KgS0&list=PLZtauCHER2jPdnqb8gwQYQeWsrax-RNfD
Buy a Dental Practice Playlist https://www.youtube.com/watch?v=ZPH7wwugPpE&list=PLZtauCHER2jOGQUaLa2Ub1wQWbZup4OZj
Raising Finance for Dentists Playlist https://www.youtube.com/watch?v=tdvs1Gr2dg0&list=PLZtauCHER2jP3uCvKqL6j3hcr7wSCfvry
Accounting for Dentists Playlist https://www.youtube.com/watch?v=pWt7lCuiWng&list=PLZtauCHER2jOtF1s3pzuXYGcoVlRfUTd0
Grow a Dental Practice Playlist https://www.youtube.com/watch?v=VNWEdLg_g8k&list=PLZtauCHER2jN9Y_fEZlr969KQthT8FenJ
Marketing for Dentists Playlist https://www.youtube.com/watch?v=H10DsvtcRL8&list=PLZtauCHER2jMptMvq2gLP9RgC-esgFy4V
Samera Webinars Playlist https://www.youtube.com/watch?v=5eHGorbZW6Y&list=PLZtauCHER2jNPTQi9-JwEY4F4I9Rqx7-K

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About Samera

Samera are business experts who specialise in providing advice, support and expertise to the world’s healthcare businesses. From starting and growing new businesses to raising finance, accounting and marketing, Samera can help you start, scale and sell your healthcare business.

About Arun

Arun is the CEO and founder of the Samera Group, starting the business with just one client sitting at his father’s dining table. Fifteen years on, Team Samera now service hundreds of Dental clients, run exciting events, help clients raise finance, and are very active in helping clients buy or sell Dental practices.

Arun has almost twenty years of commercial experience and knowledge in Dentistry, Arun’s expertise is valued by hundreds of businesses across the UK. His financial acumen and know-how, along with his hands on commercial expertise have helped clients, large and small, new and established to achieve great things.

His energy and passion for helping clients is infectious and leading his team to do their best is at the top of his list of business priorities. He has a vast network of experienced contacts he can draw on to help clients when needed.

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Find out more at: https://www.effectivedentalmarketing.co.uk/framework/

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@Dr Bhavdeep Ahuja
What exactly is Profitability?
We all know – What is Profit – Don’t we?
Profit = Income minus Expenses
Even if you are the best dentist in the town, if you don’t manage your money right, you are not going to be able to build and maintain a profitable, financially sustainable practice.
Even if our practice isn’t earning lots of money to start with, our goal should ultimately be, to be sustainable and make a profit to reward ourselves and our team.
We are then indirectly rewarding our patients through a fantastic patient experience and re-investment into the practice to provide them with the very best standards and new cutting edge equipment.
We are sometimes so busy producing week after week, only to find there isn’t much money left in the account at the end of the month?
So, I will ask again in a different manner?
What is Profitability?
Is it More Income?
Is it Less Expenses?
People look at one of the above (myopic) – I look at both of the above (telescopic).
Profitability isn’t rocket science, it is about the relationship between income and expense.
So why do so many dental clinics struggle with profitability?
The list of reasons is unfortunately endless.
So, this presentation is about taking a holistic view of both these components.

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