18 Ways to Maximize the Value of Your Dental Practice: Part Six - Margin Advantage
Stand Out From the Crowd and Grow Your Profits
What can you do now to make your dental practice more profitable now, and more valuable in the future? In our next series of blog posts, we will explore the CoreValue framework of value drivers — a set of 18 factors that impact the value of an enterprise. All of these value drivers make your dental practice more profitable now and increase its value when you sell. This week we’ll examine Margin Advantage.
Every dentist wants a practice with a high profit margin. Doing everything your competitors do, but at a higher profit gives your practice a competitive advantage. Such a practice sells for more when you retire, and puts more money in your pocket while you own it. To reach higher profits, you can either bring in more revenue or cut costs.
Grow your revenue by providing value
Patients gladly pay higher fees for your service when they feel they are receiving tremendous value for their money. If yours is the only specialty practice in town, and there’s enough demand, you can charge a premium. However, if a competitor opens a practice and provides dazzling service, then you may be out of luck.
Grow by standing out from the crowd
Likewise, any practice that provides an outstanding experience generates loyalty. Loyalty means you grow by referrals. The unique qualities of your practice — the big why of your business — will cause your patients to become raving fans if you focus on them. If you’ve developed systems that make these features part of how you do everything, a successor can easily step into your shoes and carry on.
Find out what your patients really want and give it to them
What your patients want depends on your client mix. A clinic serving Medicaid patients may discover that patients may need toys to keep kids entertained in the waiting room. Patients in an upscale clinic will prefer high-end magazines. Patient surveys are helpful here. You can easily set up an online survey at surveymonkey.com.
Cut costs but not quality
A close study of your expenses and your systems can reveal opportunities to cut inefficiencies. Comparison to industry benchmarks can be helpful, but as my mentor Norton reminded his clients, it is your uniqueness as a practice that will determine your mix of expenses. It may be better to look at your expenses in aggregate with your uniqueness in mind.
Is your profit margin as high as it can be?
Every practice is unique, so we take the time to analyze your practice and its systems with your uniqueness in mind. Call our office today and we’ll discuss the ways you can increase your profit margin and show off what makes you unique.