There are many pathways to realize growth within a dental practice, and for each pathway there are many voices offering their counsel on “the best way to…” While many of these ideas and pathways are completely valid and can have a positive impact on the size and profitability of a dental practice, a practice owner must possess and improve on a set of core competencies in order to sustain any growth that is achieved. As a dental practice owner, you are a small business owner, and your ability to monitor and operate your business will have a tremendous impact on your overall success.
When working with practice owners I start by examining the vitals that allow me to measure and monitor the health of the business, just as you would with a patient. In most business settings, these metrics are described as Key Performance Indicators, or KPIs.
KPIs are the blood pressure, heart rate, X-rays, and periodontal pocket depths of your practice. They can be very specific or can provide a 30,000-foot overview. Your KPIs indicate when and where there needs to be a more detailed investigation and treatment planning and are not diagnostic in and of themselves.
Specific KPIs should be consistently monitored across all practices. These include:
- Active Patient Count – How many patients are in the office regularly
- Number of New Patients per Month – Ideally tracked by referral source
- Daily Production – How much dentistry is done each day
- Case Acceptance Rate – How much of the recommended care is being completed or scheduled
- Collections Percentage – How much of what you are billing out is actually received
When monitored regularly and used for team goal setting, these five metrics establish the stable pillars for your success. With the information provided, a business owner can ask great questions, discover areas for focus within the practice, and identify opportunities that are worthy of additional attention and effort.
Use caution when deciding what metrics to use as your KPIs and always have a specific goal in mind. Ideally your practice will operate with 10 – 15 metrics that are constantly measured and reviewed, but be mindful of information overload; a greater number is likely to create confusion and data fatigue.
As you look to implement the usage of KPIs, a specific plan of when to review the data and who will be involved in that review must be created. Many offices create KPIs and data collection workflows but fail to review the numbers and act on them. This is the equivalent of establishing your standard of care but never evaluating whether those procedures and practices are being followed. A strong clinician consistently measures the delivery of their standard of care and makes changes if it’s not met; an effective business leader evaluates the numbers and creates follow up actions as a result of those metrics.
The metrics within your practice provide you with visibility into your own success. Monitoring and planning around these KPIs takes time and consistency, but is absolutely vital in order to drive ongoing growth. Nearly every business segment monitors progress related to goals and growth. They do so because it works. Invest this time in your business and begin to reap your own rewards.
John Budish is the Professional Development Manager for Henry Schein Dental. In this role, he leads the Dental Business Institute and contributes to the efforts of the Sales Professional Institute. In both roles, John brings his lifelong passion for helping others get better at what they do.