Making small and significant changes.
Finding the “olives” in your practice is Part Two of a series of six articles designed to get your practice working efficiently and effectively in 2011. Part 1 discussed overhead, in this article it is time to talk about how to cut costs.
The first quarter is over. What can you expect in the next three quarters? Is the economic recovery real? When meeting and getting to know potential clients, a common theme is beginning to become apparent. Many say they are being ‘nickel and dimed’ to death. “It feels as if everyone has their hand out,” they say.
Nickels and dimes are part of your overhead, too, part of the cost of doing business. In most cases you know where the big money is going: payroll, leases and loans. You may think it is only a nickel here and there. “I need to pay my lab,” “I can’t worry about the small stuff.” In our daily lives, most of us don’t worry about the small stuff, yet in our business, the small stuff can make a big difference.
Years ago, American Airlines made the decision to remove one olive from the salads it served to first class passengers. What they discovered was that passengers never notice the difference. The salad tasted as good as it had before. The presentation was the same. Customer service was never compromised. Just one olive was left off. What was different was the amount of money United Airlines spent. Over $40,000.00 was saved – a year. Perhaps now you understand how an olive, insignificant to some can make a huge difference. Having more money gives you the freedom to choose new ways of making your business even more profitable. Who would have thought an olive could save so much? Could you use an additional 40,000 dollars a year? Any savings is significant, right?
Now what is being suggested isn’t about scrimping on customer service or quality care. Your patients should never notice the “olives” you remove from your practice, just like the passengers never noticed the missing olive.
Where are the “olives “in your practice?
There are studies that suggest every time we are interrupted from our task, it can take up to twelve minutes to recover and regain focus. If the assistant leaves the room to retrieve a missing item for the procedure, what is the cost? Sure, it’s one more set of gloves, but also keep in mind, the reality is efficiency saves money and lowers overhead, too. Less time spent refocusing means more productivity per day. Unlike plumbers or lawyers, you don’t get paid by the hour, but rather by procedure. When you take longer to accomplish a task you see fewer patients or perform fewer procedures. When you lose efficiency it can mean a huge difference in how profitable you are.
Do you know what it costs to keep the doors of your practice open? You should. This probably means tracking some numbers and setting goals. With yearly and monthly goals set, you can now create a scheduling template to allow you to meet your daily goals. In morning huddles you and your team can identify where any bottle necks may occur and look for any unscheduled treatment, due or past due recare, as well as opportunities to ask for referrals. Remember, to decrease overhead you can either produce more or spend less – so more efficiency equals less overhead. It is important to stress, morning huddles are fifteen minutes that can save you money.
Set goals and template the schedule. Templating your schedule will assist you in meeting your daily goals and perhaps allow you to consider how else you can increase efficiency or effectiveness. Perhaps consider scheduling your hygiene utilizing an assistant and two treatment rooms. Perhaps you had great expectations to use some new equipment, i.e.: the laser sitting over in the corner, only to revert back to your old habits. Now is the time to reevaluate your past purchases and incorporate them into your schedule. Start using that equipment today.
Buy in bulk when you can, turn off the lights, and make sure caps are placed back on products. Check different suppliers for better deals on items you use most like gloves and anesthetic. Use up all the supplies before they expire. Again, each of these things may seem insignificant alone, but together it isn’t. Forgetting to turn off the nitrous isn’t a laughing matter, unless you’re in the room at the time. It’s expensive.
If you would like more information, please contact us at info.saltdpm.com
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This article was originally published by Tri-County Dental Society Bulletin