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What Is the Best Investment You Can Make Today?
The answer to the above is… your dental practice. Your practice is one of the few things you personally have control over. Think about it. How much control do you have over the stock market? The price of gold? Inflation?
You have total absolute control over your practice… unless you’re a total WUSS. Let’s start with the easy things.
Inflation is running at about 4.9% for 2008. Raise your fees now! How much? For starters, 4.9% x 1.74, or a minimum of 8.52%. The 1.74 is a dental inflation factor put out by the ADA several years ago. If anyone has a more current number, please forward me the data. There are several other factors in setting fees, but this will at least bring you even for the last twelve months.
Next, take a very close look at your outstanding receivables. When I started in dental management twenty years ago, the norm was 1.5 times the average production for the last three months. Today’s norm is 0.7 times your average production. There are two things you have to do to easily achieve this ratio: (1) Sign up with at least two outside financing services, and (2) require that your financial coordinator (upon pain of termination) have each patient sign a financial agreement before treatment begins. I’m putting together a quick video with more details.
Finally, double your marketing. Unless you really want your competitors to kick sand in your face for the next year!
The classic story on this subject is Coke vs. Pepsi. At the end of the Depression and the beginning of WWII, both companies were neck and neck with the American consumer. Times were tough. There was war and depression, no one had any money, and Tojo was aiming for the west coast. Pepsi decided to cut its marketing budget. Coke decided to increase its budget. Coke even went so far as to give US troops free Coca-Cola.
The rest is marketing history. Pepsi has spent the last sixty years in second place while Coke continues to kick sand in their face.
How do you want to spend the rest of your dental career? Double your marketing!
See you next week with a report on what your dental practice can expect from our new President.
Post a comment
November 7th, 2008 at 6:32 pm
We work with Dentists each day, and most of them don’t have business plans in place. With a market like we have today, we may see dental practices going out of business. Which is not got for them or for dental laboratories.
Regards,
Mark