KNOWING YOUR NUMBERS
- Tracey Langlois
- Feb 2, 2024
- 2 min read
Many people aspire for their business to be profitable, and amidst the plethora of advice available, it's crucial to discern between the good and the not-so-good. However, in the realm of profitability, there is one undeniable truth that has stood the test of time and has been echoed by notable figures:
"What's measured, improves." - Peter Drucker (American management consultant, educator, and author widely recognized as the pioneer of modern management).
"If you can't measure it, you can't improve it." - William Thompson (also known as Lord Kelvin, a distinguished physicist, mathematician, engineer, and inventor).
"That which is measured improves. That which is measured and reported on improves exponentially." - Karl Pearson (Mathematician, statistician, author, philosopher, and scientist).
The undeniable fact is that without measurement, the true impact on your business remains unknown.
This leads to the fundamental question: "What should I measure?"
The comprehensive answer might be "everything," but in reality, focusing on what drives your business, particularly its profitability, is essential. Identify your key performance drivers - when you are generating revenue and how to enhance it.
Common dental office drivers include:
Chair occupancy (Hours open vs. hours with a patient in the chair)
Client retention (The rate at which clients continue using your services)
Client recall (Frequency of clients returning for regular appointments)
Client frequency (How often clients visit your office)
Revenue per visit (Average earnings per patient visit)
Profit per procedure (Net profit per patient procedure)
Inventory holding vs. operating budget (Capital tied up in inventory)
Sundries spending (Percentage of operating budget spent on sundries)
So, what are your key performance drivers, and are you actively measuring them? If not, it's time to start. Those who grasp this concept tend to excel in profitability, growth, and client satisfaction.
Need guidance on where to begin? Reach out to me, Tracey Langlois. Beyond sundries and equipment, I offer a wealth of tools to help you elevate and streamline your practice into a profit-generating powerhouse.
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