Controlling and Lowering Dental Office Overhead Percentages
By David Hudnall, DMD
It is quite expensive to run a dental clinic, and the cost of doing business is deducted from revenue before your clinic yields any income. To reduce dental office overhead percentages and protect your bottom line, evaluate all clinic overhead costs, and reduce misspending. We will discuss some of the common wasteful dental practice expenses and how to reduce your dental office overhead percentages.
Calculating Your Dental Office Overhead Percentages
Spending money is unavoidable. The key to effectively managing dentist overhead is to measure the true cost of running your practice. It is difficult to cut overhead expenses such as employee salaries, marketing investments, operational costs, and administrative services that keep patients coming and billed properly. While it’s never a good idea to buy cheaper supplies for the sake of saving a buck, properly managing clinic supplies and controlling lab expenses are among the top ways you can reduce your dental office overhead percentages. Let’s explore a few of these overhead expenses.
The target percentage of overhead for labor costs in any given dental clinic is 25%. While you never want to be understaffed, it’s important to stay near the target percentage. Build your staff as your client base grows and expand your services to support the additional personnel. For smaller dental clinics, an admin employee and a hygienist can keep a clinic moving efficiently. If your dental clinic is already overstaffed, you may consider other options rather than letting personnel go. You might evaluate whether to take home less pay to keep your staff or reduce incentives, bonuses, and benefits until you’ve brought your overhead expense to around 25%.
Dental Office Supplies
Dental office supplies are the biggest overhead costs because of the hidden costs of managing inventory. For instance, shipping and handling charges and defective or expired products are all wasted supply costs. To reduce the overhead cost of dental supplies, consolidate your purchases with as few vendors as possible, implement an inventory management system to prevent overbuying, and look for industry best pricing.
Dental Lab Fees
A dental clinic that doesn’t offer prosthetics for restorative or cosmetic dentistry is like a salon that doesn’t offer highlights. Many dental clinics have attempted to create their own in-house lab to save money on partnering with a dental lab. But, once you calculate the cost of supplies, the space used, the equipment, and the time taken away from patient care, it costs more than using a dental lab. To cut overhead costs on dental lab fees, it is in your best interest to partner with a trusted dental lab.
Patient Chair Time
The time of a dentist is incredibly expensive. Efficient time management when it comes to patient chair time can reduce financial and time costs. A dental clinic may consider finding a lab that will produce appliances that require minimum adjustments. Even if a quality appliance costs 10% or 20% more but reduces chairside adjustments time by 50%, it can provide big overall savings for the dental office.
Reduce Your Office Overhead with Stomadent
The bottom line is, to make money you’ve got to reduce your dental practice overhead percentages. You can do this with an increase in production and patient services provided or by reducing costs within your clinic. Crunch the numbers monthly, quarterly, and annually to ensure you are in line with dental practice expense benchmarks. We recommend you continually reevaluate where you can make improvements. Include your team in the budget and stick to it.
At Stomadent Full Service Dental Lab, we create dentures, dental crowns, dental bridges, dental implants, and more. With same-day service on most prosthetics, we make it easy to cut costs. To help you meet your dental practice expense benchmarks, we use CAD technology to create prosthetics using quick and easy digital scans, and offer free FedEx 2-day shipping. We are here to help you protect your bottom line and your patients’ dental health. If you aren’t using our dental lab services to save your clinic money yet, request our dental lab starter kit today.