Whether you’re a single dental practice owner or you own hundreds of locations, you know that finding the products you need for the best price is essential to managing your overhead costs. Inflated prices and higher demand due to pandemic supply shortages means that every dollar you spend needs to go further. You also might consider factoring in a group purchasing organization into dental overhead costs. Every dental supplies discount you can get matters, and each dollar you put into your practice needs to make you money. But first, you need to know your overhead upside down and backward to know where you can improve profitability.
What are my overhead costs?
Dental Economics defines overhead costs as “every cost not associated with dentist income…including employee compensation, rent or mortgage, supplies, equipment, and utilities.” Put simply, it’s everything you pay before you pay yourself. This might sound like a simple equation, but it’s not all dollars and cents. Overhead averages can give you a better look at where you should be versus where you currently stand. How can you be sure that your practice is operating and growing to a consistently profitable scale?
Is your practice close to any of these numbers? If not, you might have some areas that require a closer look in order to become profitable in the long term. Profit margins depend on your knowledge of costs, pricing, and service necessity. More than just quantifiable numbers, profitability margins are the systematic methods of getting your practice to run as effortlessly and as profitably as possible.
How do I track my dental overhead and profitability?
An easy way to do that is to calculate your practice’s hourly overhead rate. Do you know how much money you spend every hour just to keep your practice open? Knowing your hourly overhead rate gives you the opportunity to better understand where the “money leaks” in your practice are, and how to better manage each dollar you collect in order to grow your profits.
Something as simple as taking an extra staff lunch hour can add up to over $300 in hourly costs per day. Quantify that in weekly, monthly, and annual terms, and you’re looking at thousands of dollars in lost production, a higher hourly overhead rate, and razor-thin production margins.
It should go without saying that your hourly production must be greater than your hourly overhead in order to remain profitable. Understand what your time is worth and you’ll learn to become as efficient as possible.
How can I reduce my dental overhead?
Looking at the bigger picture, you know that your practice requires a minimum overhead, such as supplies, lab fees, equipment, marketing, and practice management services. Almost all of these and other costs can be negotiated down to a more acceptable and profitable rate. Are all these costs skyrocketing for your practice? What if there was a way to get the inside scoop on the lowest prices for equipment, services, and more, with an industry-leading group purchasing organization made by dentists for dentists?
Partner with a dental purchasing or dental supplies discount group
eAssist’s Buying Power is your VIP ticket to exclusive dental supplies discounts and insider insight into the newest and best products in profitable dentistry. We provide private practice owners the ability to compete in today’s market with access to benefits typically reserved only for corporate dentistry. eAssist Buying Power is proud to pass on savings from multiple industry specialists directly to you:
- Superior and competitive technology, including Jarvis Analytics
- Continuing education opportunities
- Dental equipment for general dentistry or specialties
- Services, including Practice Booster
Our partnerships may help increase collection and production, which means more time and more money for your practice to operate to its fullest. Plus, we do the negotiating for all the products and services that you can save money on, without you or your staff having to play phone tag with different companies to get the best rate.
What does a dental group purchasing organization (GPO) do for my practice?
It’s simple math; if you save money, you’re buying time. Each product, service, and partnership offered through eAssist’s Buying Power is selected by our team of practicing dentists who have built over 21 profitable dental practices in their career lifetimes. Plus, you’ll get the opportunity to participate in monthly mentoring sessions with other dentists seeking the path to profit just like you. Let Buying Power do the negotiating for you, so you’re able to focus on delivering the best customer service and treatment your practice has to offer.