Navigating Dental Practice Ownership with Confidence

Running a dental practice requires delivering quality care to patients while managing the business side effectively. However, finding financial clarity can often feel like navigating open waters without a map or compass, drifting aimlessly, hoping to reach your destination without a clear sense of direction. With rising material costs, fluctuating patient demand, and managing team members, it can be tough to pinpoint exactly where to focus efforts for growth and improvement. To combat these obstacles, Bottom Line Business Planning (BLBP) offers data-informed insights and step-by-step strategic plans for reaching your business goals without compromising your standards.

What is Financial and Operational Modeling, and How Does It Benefit Your Practice?

When Bottom Line Business Planning discusses “modeling” in the context of your dental practice, we're referring to the process of gathering all the relevant data from your practice and using it to build a comprehensive representation of how your practice operates. Creating a detailed operational flow chart of your business, we study how all aspects of your practice are connected and impact each other financially.

To make informed decisions, it’s important to understand how money flows through your business. For example, how much does each treatment cost to perform? What are the labor costs tied to each clinician? How do various operational costs - like supplies, associate fees, and staff wages - affect your bottom line? Without a clear understanding of this, it’s difficult to make improvements or identify areas of potential growth.

Bottom Line Business Planning collects all of this data and organizes it into a set of models that show the relationships between these different elements. This allows you to see how changes in one area, like increasing treatment time efficiency or adjusting your pricing, could impact the overall profitability of the practice.

Here’s how it works:

1. Gathering the Data: First, they collect a broad range of information about your practice. This includes financial statements, treatment details, labor costs, and even more subtle Key Performance Indicators (KPIs) to understand how well your team contributes to growth and efficiency.
   

2. Building the Model: Once they have the data, they input it into a proprietary data assessment system designed eleven years ago by a team of practice managers and managerial accountants. This system organizes everything into operating and financial categories and shows how these categories affect one another. For example, if a particular treatment is underperforming, the model can pinpoint whether it’s due to pricing, treatment time, or staffing issues.
   

3. Understanding the Insights: After the data is processed, we use our model to provide actionable insights. For example, we might highlight that your costs for a particular treatment are too high, or that your team’s performance could be optimized with more efficient scheduling. These insights help you understand exactly where changes can be made to improve performance and profitability.
   

4. Making Informed Decisions: Finally, with a clear understanding of how your practice operates, you are equipped to make decisions that align with your revenue goals. Increasing profitability, reducing costs, and improving staff retention, the model shows you where to focus your efforts and what steps will lead to the most significant results.

By using these models, you don’t have to guess where the problems are or how to improve your practice. Instead, you have a data-supported approach to making decisions that drive growth and efficiency.

Real-World Example #1: Solving High Recruiting Costs

A practice owner struggling with staff turnover historically addressed the issue by increasing salaries. Using the above models, they found that the problem wasn’t about salaries, it was about organizational clarity. The practice lacked a clear structure. Communication between team members was inconsistent. By implementing clearer role definitions, communication protocols, and a new performance-based bonus structure, BLBP helped the owner build a more cohesive and motivated team without spending more for higher staff salaries.

The result? Not only did recruiting costs decrease but the practice saw improved morale, better patient retention, and a path to increasing net profits over the coming year.

Real-World Example #2: Supporting Long-Term Transitions

BLBP’s models also helped a client planning to sell their practice to a long-time associate. Bottom Line Business Planning created customized models that provided a clear picture of how the sale could develop. The strategy created from the models allowed the seller to retain partial equity, ensuring recurring income for the exiting practice owner while transitioning away from day-to-day ownership. It also included cash flow projections based on the associate’s expected performance and the current patient base, outlining how the change in ownership could be a smooth transition that benefited both the seller and the buyer.

Why Bottom Line Business Planning is Your Key to Growth

When uncertainty strikes—whether it’s due to changes in the economy, staffing challenges, or changes in patient demand—Bottom Line Business Planning becomes a guiding light for dental practice owners. They don’t just provide you with financial insights; they give you a clear, actionable plan based on your own data.

Through detailed financial models and deep analysis, BLBP helps you navigate complex decisions and align them with your long-term goals. Whether you want to grow your practice, prepare for a transition, or tackle specific challenges like cost control, Bottom Line Business Planning empowers you to make informed decisions that steer your practice toward success.

For more information, email: info@bottomlinebusinessplanning.com

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Bottom Line Business Planning provides health care clinicians and entrepreneurs tools to enable them to be more successful business owners. Through analysis of financial and operational data, as well as strategic planning sessions with the principal, BLBP empowers entrepreneurs to make decisions based on what is best for both the top line growth and the asset value of their business.

The company is the North American licensee of a uniquely successful dental practice profit management company based in the United Kingdom, with nearly two decades of experience and hundreds of clients successfully counseled.

Bottom Line Business Planning uses proprietary profitability forecasting models designed for specific areas of dentistry. It is widely acknowledged to utilize the most granular analytical tools available to assist practice owners as they address day-to-day management issues.

BLBP’s objective is to shape the growth trajectory—whether to enhance EBITDA or to prepare for an exit strategy—for solo practice owners and multi-practice owners alike.