After the start-up and acquisition phase is complete and you have a regular patient base established, you’ll find yourself in the growth and maintenance phase. At this point, you may be wondering how your Practice compares to others in the industry or maybe you’re ambitious and curious about growing into a two-Practice owner (three-Practice, four-Practice or more)!
As you progress through your Practice ownership lifecycle, benchmarking becomes increasingly important. This helps to provide information on areas your practice may be able to improve upon. For example, did you know the average dental Practice pays about 18.4% of their revenues in clinical wages? This means if your Practice collects $50,000 in a single month, about $9,200 should be paid in wages to your hygienists and assistants that month. How does your Practice compare? Reviewing these industry averages monthly can help guide decision making within your practice. We will go into more detail on these averages later in this blog series.
If owning one Practice is going smoothly, you may be curious about the possibility of purchasing/starting a second Practice. Our team is able to work alongside you to review your current Practice’s financial standings and the different ways you can grow into a two-Practice owner. We work to answer questions like ”How will hiring an associate at my first practice impact my bottom line while I’m working at the second practice?” and “Can the cash flow of my first Practice help support the second Practice?” along with many others.
Our dental team has worked to develop various financial tools to help measure your practice against others and its potential for growth. These tools include our monthly industry standards comparison to your practice and our Practice Scorecard which can be used to review options for the purchase of additional Practices.
Check back next week for the third and final phase of the Dental Practice Lifecycle: Sale of Practice & Retirement.
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