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February 9, 2024

Dental practice management and financial peace of mind

Dental school teaches us medical care techniques, but not how to run a business. Business manager, accountant, HR manager, social security or mutual insurance expert, IT technician, buyer .... - these are all professions that a dental surgeon must be able to master or supervise in a private practice. 

As a dentist and business owner, you juggle patient care, staff management and a myriad of administrative tasks, leaving little time to delve into the intricacies of financial management. However, achieving financial security is not an option but a necessity for the long-term success of your practice and your own peace of mind.

By mastering the management of your business, you'll create a stable foundation for your practice, enabling you to pursue your professional goals and personal aspirations with serenity and confidence.

However, we often find that dentists, like many self-employed professionals, have not received the training they need to know which indicators to track, nor do they have the tools to manage them accurately. 

Running a business without the right tools or reflexes is like driving a car without a dashboard or GPS. 

Financial concepts to keep an eye on for good financial management: 

 Knowing the neutral point

The first thing to bear in mind is the break-even point. This break-even point, also known as "equilibrium", is very simply defined as the amount at which your business becomes profitable. In other words, the break-even point is the point at which you start generating money. To define it, you need to be able to add up all your fixed costs ( rent, loan repayments, payroll costs, etc.) and your variable costs ( water/electricity bills, property management, maintenance, insurance, etc.). Once you've defined this amount, you'll already have a good idea of everything that is automatically subtracted from the sales generated. Added to this are operating costs (stock, material orders, taxes, etc.) that you'll need to anticipate. Sales that are too low in relation to major financial commitments can put you in a difficult position despite very good sales. 

The conversion rate of your quotes

Very few practitioners know exactly what their acceptance rate is, and the vast majority tend to think it's relatively high. In France today, 65% of patients do not accept their treatment plan. Of the remaining 35% who do, the average estimate accepted and billed is around €535. Given the price of the various treatments, there's a good chance that the estimate will be only partially accepted, reducing the average acceptance rate in France to a relatively low level. And yet, it's absolutely vital to monitor this rate, because on the one hand, it's our duty to give patients the chance to treat themselves. On the other hand, it's the best way of ensuring that we have a financially sound practice that is not at risk of closing in the months or years ahead.  

Following a patient survey carried out by Allisone , 56% of patients who did not accept treatment at their last dental consultation cited not understanding the importance or urgency of the proposed care as the reason. Patient communication and understanding of the treatment and its implications are key to obtaining patient acceptance. To make it easier for your patients to understand, equip yourself withAllisone to help them see what you see! 

Hourly rate

There are several ways to find out your hourly rate: 

  • From the "top" with sales: by simply dividing your sales by the number of hours worked. 

To find out the true hourly rate of your work, just to calculate your hourly wage, remember to deduct all charges from sales before calculating.  

  • From the bottom up, using expenses: by adding up all fixed and variable expenses (including salaries) and dividing by the number of hours worked. 
  • Per procedure by dividing the price of a procedure by the time needed to perform it. 

The hourly rate for a dental surgeon in France generally varies between €45 and €80. The idea is not necessarily to fit into this range or to compare yourself, but to make sure that your work and investment are remunerated at their fair value. 

Pitfalls to avoid & best practices : 

Anticipating load fluctuations

During your years of practice, your practice will live on, and the costs you incur will invariably change as your practice evolves. In addition to the figures explained above, you'll also need to keep a close eye on your expenses. 

  1. Tools will need to be repaired/maintained or replaced by new technologies that are more attractive to your patients and more efficient for you in your day-to-day work. In dentistry, we're often talking about large sums of money, and you'll need to take these new expenses into account when managing your practice. 
  2. Your taxes will change! Depending on the sales you generate, you need to be aware of the variations in taxes that this may represent. Indeed, if you have an excellent year this year, don't forget that next year's taxes will be proportionate. 

Anticipating sales fluctuations  

Setting up a practice is expensive, and so are the investments you'll be making over the years. And often, a large part of this is financed by bank loans which, when added to the practice rent, represent a substantial monthly expense. 

However, you won't generate the same sales every month because

  1. You're going to take a vacation now and then, and potentially close the practice in August. So it's a good idea to know your annual break-even point, so you can understand how you can work the other months to give yourself a peaceful vacation. 
  2. Seasonality is linked to patients' vacations or the start of the new school year, for example, which will bring a variation in patient demand that is not linked to your own schedule. 
  3. You'll be working on complex cases for months on end, and you'll only get paid once you've finished your work. In this case, it's important to be able to earn money by managing the flow of new patients. 

Best practices : 

Dentistry is one of the professions most prone to burn-out. It's a particularly demanding profession, requiring extreme precision and expertise on the one hand, but also empathy, listening skills and a great deal of effort to build a relationship of trust with each patient. Unlike other forms of medicine, the care required is invisible, or at least not obvious to patients, and requires a great deal of teaching. Added to this is the responsibility of running the practice. So it's important to have all the tools at hand to avoid leaving the practice under financial pressure. 

Run your practice like a small business - that's what it is!

To run a business effectively, you need indicators. Knowing these indicators, which are often quite tangible and down-to-earth, can help you see your business more clearly. Here are a few examples: 

  • A very low hourly rate for certain treatments may mean that you need to change some of your rates. 
  • If the conversion rate is too low, you may want to spend more time on your patient communication during initial consultations. 
  • Too little profit on long working days may lead you to reconsider the merits of some of your investments. 
  • If your inventory is costing too much money, you may want to reconsider volumes or frequency. 

Lack of clarity on these elements can lead to a lack of control and, consequently, financial peace of mind. 

Manage your patients

Depending on our geographical location, patient management constraints are not necessarily the same. That said, there are a number of common best practices: 

  1. Don't necessarily be on the hunt for new patients, but focus on achieving a good rate of care. A good rate of care is very often linked to good communication and a trusting practitioner-patient relationship. Don't neglect the time and attention you give them. A satisfied patient will refer others! 
  2. Don't work in "waves" of new patients. By operating in waves, you run the risk of seeing your sales fluctuate. With waves of new patients, you'll spend several weeks/months treating all the new patients you receive at any given time, and you won't invoice them until the treatment is complete. By the time these time-consuming treatments are completed, you won't be generating the sales linked to the time allotted. So remember to devote part of your time to welcoming new patients, and do so on a continuous basis. 
  3. Keep a clear and legible record of your patients who have a current quotation, and ask your assistant to call them back to inform them, clear up any doubts they may have and encourage them to choose preventive healthcare. Bear in mind that patients with no pain or symptoms are often less proactive in booking a second appointment. 
  4. Make sure you teach oral hygiene and get the right patient feedback for check-ups. 

Be efficient and organized

Taking care of a patient can often take a long time. Save them time by being: 

  • efficient patient management (documents / insurance / claims / ... ). 
  • Quick to make appointments and offer slots to treat your patient quickly. Keep in mind that patients don't particularly want to come back many times over many months. 
  • Be organized and group together acts of the same type. 

Protect yourself:

As a dental surgeon, you are required to take out professional liability insurance to cover any damage caused to a patient during a medical procedure, as well as health insurance to cover your healthcare costs, to which you may add a mutual insurance company. 

In addition, you can further protect yourself by having: 

  • In the event of incapacity for work, disability or death, this insurance will provide you with coverage in the event of work stoppage, a disability annuity and a lump-sum death benefit. 
  • Professional Multirisk insurance covers damage to business premises, equipment and inventory. It will help you in the event of business interruption, legal problems with Legal Protection and assistance in the event of a claim.

Learn the basics of business management:

Being an entrepreneur is not something you're born with, but financial management is quite straightforward and logical. All it takes is a bit of training to learn the basics of running a business. 

If you want to live serenely from your profession, and eventually be able to work a little less, or just as much, but better, don't hesitate to enlist the help of an expert to help you master the basics of management, so you can see your indicators clearly and make informed decisions. Christophe Barral, Dentiste Epanoui, can help you along this path, thanks to the method he has developed over more than 15 years and tested with over a hundred dental practices in France.

Driving without a dashboard is not impossible, but it does complicate decision-making. The same applies to managing a dental practice, and yet dentists, like many other professionals, never receive any training in this area during their university studies. Get trained, get to grips with your key figures and make decisions based on them, and you'll be all the better for it!

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