The Practicon Viewpoint by Ann Page Griffin

FAQ: HOW CAN I INCREASE PRACTICE PROFIT?

A dental practice is a care facility where science meets art; equally important, a dental practice is a business. Immutable fact: a business must make a profit or close its doors. In the world of business and industry, apart from the health care arena, companies manage their fiscal health by writing an annual budget and adhering to that financial roadmap in order to reach maximum profit each year. Adjustments to the budget are made mid-year only when absolutely necessary.

As with any business, a dental practice increases profit in two ways: earn more and spend less. Earning more is a topic for other blogs on marketing, case presentations, scheduling, production and collections. Spending less depends on a plan, your budget, written in the fall of one year to guide practice expenditures during the following year.

For a tutorial on writing a realistic budget for your practice, please see How to Write a Budget for Your Practice (one of many practice management documents available at Practicon’s website, practicon.com, under Free Resources for Your Practice). This guide is one of the fruits of my 35 years of experience as a dental practice management consultant. During that time, I have helped numerous offices either create a budget for the first time or rewrite the plan they were using.

Please print out the How to… article and use it the same way you used Cliff Notes for a college class. Study the budget process until it makes sense for your practice and your numbers. Ask questions of your accountant to clarify your plan. Involve your senior staff members in the planning stage so that they understand and are committed to the budget, because they will help administer the plan. The first year is the most difficult; subsequent years will be much easier in both the planning and adherence phases. Remember, a budget is like a GPS keeping your practice on the route to controlled expenses and maximum profit.