Looking for a better bottom line for your dental practice? The formula for better profitability is simple: cut costs, boost sales, or ideally do both. But as uncomplicated as this concept sounds, it’s not always easy to design a useful strategy for increasing profits. In fact, most small businesses fail to grow their returns on an annual basis, if they generate a profit at all. Here are three key considerations your dental practice should address in pursuit of regular financial success.
According to a study by U.S. Bank, more than 80% of small businesses fail due to cash flow issues. In other words, these companies have more money going out than they do coming in. It’s significantly easier for a business to gain control over its spending than it is to generate more income, so consider these simple methods for trimming your expenses:
- Cut administrative costs by outsourcing routine tasks or hiring part-time personnel
- Automate back-office procedures – like appointment bookings and reminders – wherever possible
- Negotiate better prices and payment terms from suppliers
- Keep your accounts receivable up to date
One of the most effective, but most overlooked ways to keep your dental practice earning top dollar is to stay on top of its outstanding client invoices. Uncollected bills translate into a business expense, and amounts owing to your company can’t really be considered income until those funds are lodged firmly in your bank account.
Ramping Up Revenues
Cross-selling – or offerings products and services that fall naturally in line with what your organization does – is a valuable sales technique that any type of business can use to increase its revenues. For example, consumers are often unaware of the wide range of cosmetic options that many dental practices now offer, including services like teeth whitening and composite bonding. Don’t be afraid to let your patients know what you can do to make their lives better!
Other tactics for ramping up revenues include:
- Offering incentives for confirmed patient referrals
- Discounting prices or offering time-limited specials on products and services
- Rewarding patients who take the time to review your practice online
Positive reviews are particularly important when it comes to drawing in new business. Dental practices are heavily service-focused, and as many as 88% of all consumers report that they’re influenced by online customer service reviews when they evaluate a new company.
Stretching Your Marketing Dollar
Marketing is just as important for a dental practice as it is for any other small business, but it doesn’t always have to mean spending the big bucks. Most dental practice clients are location-based, so as a minimum, be sure you’re taking advantage of all the local – and sometimes free – listings and directories that are available to your business. These can include online resources like Bing, Yahoo, and Yellow Pages, as well as locally driven initiatives like “welcome wagons”, business associations, and the chamber of commerce.
To remain competitive, it’s also important that your practice:
- Promotes professional development internally, and keeps those credentials current and well-advertised
- Reaches more clients by exploiting mutual promotion opportunities with other local businesses
- Stays visible and connected with an up-to-date website, social media presence, and frequent direct mail offerings
Friendly website videos, social media-generated contests, and value-driven emails are all great ways to form a more personal relationship with your clients. Consistent communication will help to keep your patients coming back on a regular basis, and will encourage them to bring their friends and family members with them.