Bah Humbug! Why being like Scrooge doesn’t work!

“Men’s courses will foreshadow certain ends, to which, if persevered in, they must lead, said Scrooge. “But if the courses be departed from, the ends will change. Say it is thus with what you show me!”
Charles Dickens.
Christmas is coming, time to forget about the practice and enjoy the festive season. If you don’t want me to spoil it for you, stop reading now.

Oh dear, you kept reading. Well, ok, here’s a likely scenario for when you go back to work in January: Short, dark, wet cold days and the media telling everyone that the UK economy (and the Euro) are close to melt down, snow causing chaos, an outbreak of flu decimating your staff and your diaries, patients cancelling late, refusing or postponing treatment plans as their credit card statement arrives etc etc. In other words, it’s probably going to be pretty quiet in your practice! Unless you have a plan, (you do have a plan don’t you?).

As the practice diaries struggle your profits will be falling in real time, right in front of your eyes. So, about that plan then…  There are two obvious tactics (and you might decide to implement both) however,  the point of this article is to demonstrate that one tactic is far more effective and creative than the other and that a Scrooge like approach to cutting your costs can only have a limited effect on your bottom line and is likely to remove anything that remains of the feel good factor in your practice and will certainly add to the January blues!

Here are the two (obvious) Tactics:
1. Cut your practice costs
2. Find ways to increase your practice gross

Lets look at the effects of these two tactics on an average UK practice whosePractice Numbers Look Like This:

  • Principal Dentist grossing £1,000/day 4 days per week, 46 weeks, £184,000/year
  • Associate Dentist grossing £1,000/day 4 days per week, 46 weeks, £184,000/year.
  • 2 hygienists grossing £550/day, 3 days per week each, 46 weeks per year, £151,800/year
  • Total Practice Gross, £519,800
  • Variable Costs (to include, Lab, Materials, Associate pay, Hygienist’s pay, £16,500/month, £198,000/year
  • Fixed Costs, £21,000/month, £252,000/year
  • Net Profit, 13%, £70,000

Tactic No 1. Cut Costs:

Of course, it’s always a good idea to review your costs regularly. A dental practice has two sets of costs. “Fixed Costs” are those that remain pretty much the same month in and month out, the biggest of which is usually staffing costs closely followed, in a lot of practices, by debt repayments. By their very nature, fixed costs are hard to reduce and with inflation running at around 5%, you might even find them hard to maintain at their current level.

Your Options Include:
1. Reducing the amount you pay your staff or reducing your staff numbers
2. Reducing your utility bills
3. Reducing your service contracts
4. Reducing your professional services fees such as Accountancy, HR etc.
5. Buy cheaper coffee (No!)

The rest of your costs are “Variable Costs” because they are linked to the practice gross. These costs include: Laboratory bills, Materials, Associate remuneration and Hygienist remuneration.

Your options include:
1. Reducing your lab fees
2. Using cheaper materials
3. Cutting your Associate remuneration
4. Cutting your Hygienist remuneration
5. Handing back the credit card machine

These five costs, together with your staffing costs are usually the largest practice costs and small savings here will make a difference. I’m sure you will understand that shaving percentage points from these costs is hardly going to make you popular with the people that are pivotal to your success. I’m not saying don’t do it, I’m saying if you are going to conduct a cull here, be aware of the effects it will have on morale and the quality of the dentistry that your practice can deliver.

If you are able to cut fixed and variable costs by (quite an ambitious) 5%, the effect on the profit in the practice I am modelling will be to:
Increase in Profit ~ £1875/month £22,500/year,

Tactic No 2. Increase Gross:

But it’s January and the UK economy is on its knees you say… Yes but, paradoxically, according to the city analysts, the demand for Dentistry is increasing. Hooray! That will be why Tesco, Sainsbury et al have woken up to the opportunity then! So, what sort of dentistry will the increase in demand be for? Well, my guess is that it wont be for new amalgam fillings in upper second molars! But it will be for dentistry that people want to spend their precious cash on (rather than dentistry they have to spend it on) such as:

  • Cosmetic Dentistry, Including, straight white teeth, no gaps and facial rejuvenation. Think celebrity
  • Implants to replace gaps and retain dentures.
  • Affordable, good quality family dentistry (not at £200/hour fees!)
  • Boutique dental care for the wealthy over 50’s
  • Children’s Orthodontics (Private)

So, how will you plan to serve these growing markets? Well, a faded private practice in a small town location with tired dentists who have poor communication skills, doing single unit dentistry for large numbers of reluctant patients at £200/hour really isn’t going to work anymore.

Here are some options that will work:

Options Include:
1. Make your client journey remarkable every time.
2. Increase the quality of everyone’s communication skills by training and role-play.
3. Reduce your fees for regular, simple dentistry and increase your fees for everything else.
4. Increase your chair occupancy by:

  • Reactivating dormant clients
  • Reactivating dormant treatment plans
  • Increasing treatment plan uptake
  • Increasing treatment plan value
  • Increasing referrals to your hygienists
  • Increase the effectiveness of your marketing
  • Increase the effectiveness of your sales process

5. Extend your opening hours
6. Extend your service offer

If you were able to achieve a very modest increase to your clinicians daily gross fees, that is by, £100/day for the Dentists and by £50/day for the Hygienists then the result on the practice profit I am modelling will be this:

  • 2 dentists grossing £1100/day 4 days per week each , 46 weeks per year will gross,£202,400/year each, £404,800
  • 2 hygienists grossing £600/day 3 days per week each, 46 weeks per year will gross, £82,800/year each, £165,600
  • Total Practice Gross, £519,800
  •  Variable Costs (to include, Lab, Materials, Associate pay, Hygienist’s pay, £17,700/month, £212,500/year
  • Fixed Costs, £21,000/month, £252,000/year
  • Net Profit, 19%, £106,000

Increase in Profit ~ £3,000/month £36,000/year

If this practice were able to achieve both tactics, then the combined increase in profit will be:

Profit Increase = £4,875/month, £58,500/year

As you can see from the example, increasing gross is more effective than cutting costs. Doing both will clearly give the best results. Either way, if you want to be one of the winners during the first quarter of 2012, then you better have a plan to implement on January 3rd or be willing to watch your profits fall further…

And if you would like some help with growing your practice in difficult times by working with a team with a proven track record….


Please contact me directly at or contact the Breathe Team on 0845 299 7209 /


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