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Dental office overhead percentages; how to lower

There are a lot of variables, but I think you'll find these numbers close to average plus or minus a few percentage points (based on collections):

Staff: 25%
Rent/upkeep, cleaning, etc: 5%
Lab: 5%
Dental Supplies: 5%
Marketing, phones, etc: 10%

Typically there are not too many places to cut costs other than payroll when it comes to the management of your dental practice overhead. In general payroll is the one area where the percentages are often too high. On top of that most practices are only producing at about 60% of what they could be doing.

Consider this: A $10,000.00 monthly increase equals $120,000.00 per year or 1.2 million over ten years!

So the answer to lowering your overhead percentage is to produce what your practice is capable of. In other words find the lost income that is right there for the asking.

The only way I know to accomplish that is by training your staff on proven dental management systems. 

Do what you can to save money where you can but realize the main reason you are hemorrhaging profits is due to the dentistry that walks out the door due to poorly trained staff and inadequate systems.bers with a low payroll percent.

A typical situation: You hire an "experienced" front desk person but you don't provide any in house training or apprenticeship. So the new person does it "her way" and often creates more headaches than the person you just got rid of.

The highest producing staff members are those that are trained and apprenticed in house.


 

Kevin Tighe, Cambridge Dental Consultants, Senior Consultant, got bitten hard by the business and marketing bug during long summer days working at his dad's Madison Avenue ad agency. After joining Cambridge as a speaker in the mid-1990s, Kevin went on to become Cambridge’s senior consultant and eventually CEO. Cambridge Dental Consultants is a full-service dental practice management company offering customized dental office manuals. Frustrated? High overhead? Schedule a chat with Kevin at 

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