Does Your Practice Have a “Vitamin C” Deficiency?
One of my favorite television programs is “Shark Tank” on ABC. Primarily the show is about small business owners and entrepreneurs who are looking for investors to take their business to the next level. They have an opportunity to present their pitch to the “sharks”, a group of highly successful investors with amazing track records of making a lot of money. If one or more of the sharks sees a good chance of making money on the venture, they will make an offer to invest in the business. The sharks can get tough with their questions, sometimes bringing the business owner to tears or to anger.
What if your practice was pitched to the sharks as an investment opportunity? Do you think you would get the dollars you need, or be asked to leave because of your deficiencies? Let’s examine your cash, credit and customers.
We’ll start with cash. What are your production and collection statistics? Are you producing to a goal that is set based on your realistic overhead plus margin for growth? Are you collecting at least 98% of the adjusted production? Are your accounts receivables at a healthy less than 10% in 90 day aging? Is your Business Coordinator collecting 35-55% of the production over the counter daily? Bills don’t adjust to your collections and neither do salaries. I see far too many offices letting patients walk out the front door without asking for payment, and that includes insurance co-payments and deductibles. Is the belief that when the patient gets a statement they will pay? The reality is, “if you don’t ask, you don’t get.”
How about credit? What happens when you don’t pay your lab technician on time? Your cases won’t get top priority and maybe the lab will drop you as a customer. Usually the lab asks for COD for all cases if they do decide to keep you. You can keep switching labs but sooner or later the word gets out. Paying bills with your credit cards without paying attention to whether there is enough to pay the credit card bill is frightening. When you run out of credit it can affect your ability to stay open for business. Do you offer credit to your patients so they can get the treatment they need? CareCredit is the answer for patients needing monthly payments and should be offered with every treatment plan. Most people use credit for the unexpected, and dentistry is often that for many people.
Lastly, what about customers/patients? Have you measured your patient retention? What does your practice do to keep patients/customers returning? Do you have a system to contact patients who are due to return or have not scheduled for treatment? Out of sight out of mind is not good business. If you were a real estate agent and you sold me a house, do you think I don’t need you anymore? People move for many reasons, with the average stay in a home being about 5 years. Wouldn’t it be prudent to keep in contact with the anticipation of me needing you in the future? If you don’t take the time to build a relationship with your patients they are less likely to remember you when they need a dentist.
So, did you make it out of the Shark Tank alive? Were there any negatives or questions about your practice that you could not answer? Do you feel you have a Vitamin C deficiency? The doctor is in the house. McKenzie Management has the tools to take your practice to the next level and the prescription for your deficiencies to start making a difference in the health of your practice immediately. From practice assessment to practice success through custom training and consulting, we have programs designed for the needs of your practice today. Is cash flow a problem but you think you are busy? Professional Office Manager Training or Front Office Training for your business staff will teach them how to schedule for production, collect what is produced and have a happy patient base. Call us today for a prescription for success.Forward this article to a friend
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