Dental Clinic Investments - we look at it all wrong!
"There are no bad business and investment opportunities, but there are bad entrepreneurs and investors..."
~ Robert T. Kiyosaki
It's hard to cut costs while maintaining high quality services!
Everyone wants to do better - not only the owners of companies, but the teams who work for them.
What if we learn to VALUE those things that help make us profit? The teams, the equipment, the supplies, the lab? If we INVEST in our greatest assets instead of trying to cut the costs - we may end up with a better product. Innovation. Higher production.
In my recent blog I discussed a simple formula. You can apply this to TEAM, or PRODUCT. Lets just talk about a widget.
If you use "Widget A" and you drove down the cost so it's now at 5% of your procedural costs (supply overhead is 5%). If the supply you currently use generates:
$300 in an hour.
$300 x 5% = $15 per hour cost. Gross Profit $285
Labour costs remain the same regardless of procedure time (associate fees are affected, but the second example will make an associate even happier!)
If you are taught to use a more skilled product. One that costs 6% relative to the procedure but is so much better - it's FASTER and DOUBLES production. This person/product generates $600 an hour. In the case of the widget - a variable expense In the case of labour....a fixed expense.
$600 in an hour
$600 x 6% = $36 per hour cost Gross profit $564
Labour costs remain the same, profit for end user is higher. Associate fees would be the same percentage - but I guarantee both the associate and owner would be pleased...
Which would you rather strive for?
If you want to use "cheap", you will find it. There is plenty in the "race to the bottom". Personally, I am an investor and UNDERSTAND the value of a trained and productive team. I understand the quality of people first, then process (supplies and equipment) and quality of product (your services).
So do the large businesses that are buying up our clinics. People are an investment, Process is an investment. Product is the outcome of these investments...
We are all in this race together, let's create an efficient health care system that benefits the patient as much as the team creating the incredible solutions.
Understand the investment.