Every Dental Professional knows that where it comes to health and quality, there simply are no shortcuts. Competent, consistent, and high-quality patient care means investing in the best possible staff, equipment, and supplies.
This has always been a tricky balancing act – and it has become more difficult than ever.
The global pandemic has affected business across the spectrum, and the business side of Dentistry is no exception. A big question on the mind of just about every solo dental practitioner these days is: How can I save costs?
How to Save on Dental Costs
Your dental practice may be unique, but running a business comes with the same challenges for every industry. There are only so many overheads and expenses that you can carry before the financial wheels start to come off. That's when we need to make the hard choices – and cut. Much of the pain can be avoided by making wise choices from the start.
For the typical dental business, you will have to cater for employee salaries, facility costs, equipment costs, operational costs, supply costs, and marketing costs. When the financial pinch is felt, it becomes a matter of prioritizing - but there is only so much you can cut before you start undermining your future.
Often, saving money means that as a Dentist, you have to walk a tightrope. Making the wrong choice could hurt your business. You need to maintain the essential operational framework intact in order to hold onto your staff and to avoid scaring patients out the door.
The good news is that by carefully managing your dentist supply store relationship, operating and lab expenses, you can add tens of thousands of dollars to your bottom line. With that in mind, here are some useful guidelines for reducing overhead expenses, starting with supply costs.
Cost-Cutting Guidelines
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Take a ruthless look at your income statement. Identify all superfluous expenditures, such as items used for labor, supplies, lab fees, and doctor benefits.
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Explore house brands. Today, the quality of private-label goods is higher and better than ever before. Retailers have full control over the development of their private brands, which significantly decreased the gap of distinctive quality between house brands and popular labels. For smaller dentist practices private dentist labels is a key to staying ahead of the competition.
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Pay more attention to the hidden expenses: Defective product returns, overstocked items held in inventory, and shipping and handling charges.
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Diversify vendor portfolio. While managing multiple vendors can complicate supplier relationships, it reduces dependency, increases the flexibility of moving products, simplifies logistics, which allows better and faster delivery. Overall, having multiple vendors sophisticates competition, and optimizes price for products.
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Reexamine your facility costs. You will be surprised at how much money can be saved by using cost-saving light fittings, using motion sensors, or Investing in a waterless vacuum system, for example.
Set (and Firmly Enforce) a Fixed Budget
It might seem impossible to calculate a set budget, especially for things that are used sporadically or in unexpected ways. Don't let that stop you! Dig out the records, and start by calculating and evaluating your average spend in detail over the previous years. This will give you a ballpark idea. Knowing your numbers brings peace of mind, and helps you keep your finger on the pulse of your business expenditure – and then – be ruthless with those unnecessary costs.
Reevaluate Your Ordering Strategies
Order only what is needed. While you are setting the budget, checking previous years for average supply spend, be sure to also check how much supply you are typically holding. Are you carrying too much? Could you save by ordering in greater bulk? This is also where the benefits of group and bulk buying factor in.
Understand your order. It might be drudgery and keep you away from your patients, but knowing the details about what is on the market could save you a bundle. Are there cheaper alternatives? Can your representative negotiate better rates? Do they offer free goods or other cost-saving strategies? For example – if you offer them a larger share of your monthly buying budget, can they give you a better deal? The time and effort you spend in this research are certainly worth the savings you will see on the bottom line.
Keep an Iron Grip on Your Inventory
Usually, convenience outweighs costs – but in tough times, you may have to change your strategy. Especially if your dental practice has multiple locations, it is highly likely that most of them have unused, overstocked items in the storerooms.
A huge supply sitting idle is a waste. Instead of stocking extra supplies in every room, keep the boxed inventories tightly controlled in the supply room. Keep tabs on where your supplies are going, and streamline the efficiencies. Tighter admin saves money.
Reexamine your Insurance Spending
Insurance tends to be something we purchase once, and then it gets relegated to the back of the mind – until it's time to pay the bills, that is!
Your business is changing, though, so it's wise to ensure that your insurance coverage changes along with the needs of your business. Set an appointment to review your coverage, and take the time to compare the rates you are paying, along with the details of the coverage with at least two to three competing insurance agents. You might save substantially on your premiums, plus you make sure that you avoid serious financial loss from being under- or over-insured.
Consider Buying Groups and DSO Affiliation
This may be the last item on the list, but it certainly isn't the least important. The DSO (Dental Service Organization) and Dental Buying Group model seems to be the direction the overall international dental market is taking.
In previous blog posts, we went into more detail about whether your practice should be part of a Dental Support Organizationthe, and group structures in modern dentistry. If this is something you are considering, read our POV on the benefits and drawbacks of the Group Dental Practice Model.
The cost-saving potential is a factor that weighs heavily in the minds of many solo practitioners.
The simple economics of scale mean that large groups get preferential prices, more attention and better service from the supply companies, and better deals and perks.
As you can see from the guidelines above, saving money and cutting costs is not going to be quick and effortless. A busy Dentist, especially if you are running your own practice, seldom has the time to invest in running the administration efficiently – and that is one of the biggest drawcards of the DSO model. It makes sense to leave the buying, stocking, ordering, staff administration, the legal and insurance hassles – all of the drudgery we have covered in this post – to the professionals, while you focus on your core strength – being a great Dentist.
In conclusion: Times are tough for businesses worldwide, and only those that adapt and tighten their belts will thrive in the long term. It just makes sense to become more cost-conscious.
