Understanding the Fundamentals of Operating a Business

Most dental clinicians are not accustomed to or comfortable with managing their businesses. How can they be? The general dentist is the primary revenue producer (2/3 dentist and 1/3 dental hygiene) and needs to be chairside generating income 95 percent of the time. Practicing dentistry and running a successful and profitable business is not easy. As colleagues, we all know dentistry can be demanding, both physically and emotionally. 

A December 2015 study published in Dental Economics revealed that only 7 percent of dentists enjoy managing their businesses. In other words, 93 percent of dentists do not enjoy their management roles and would prefer to focus on providing dental treatment and leave the administration to others. Intuitively, this makes sense, as most dentist were science majors, not business majors. Herein lies one of the problems.

Few dental offices employ office managers who have a comprehensive knowledge or formal education in the basics of managing any type of business. Instead, most clinicians rely upon front-office employees who have acquired their knowledge through on-the-job training or from others who may be ill-equipped and lack the comprehensive knowledge to train them. The results can be catastrophic. This is the reality in most dental offices across the country.

As a clinician and dental analyst who uses data and metrics to make informed decisions, I am astonished at the number of colleagues (new and experienced) who are being taken advantage of by staff, vendors, landlords, corporate dental offices and insurance companies. And because many clinicians haven’t received formal business training and don’t possess a thorough knowledge of how to operate a business, they simply don’t know what they don’t know. Many owners are afraid of change and/or admitting that they need help. I have witnessed far too many great clinicians who have left hundreds of thousands of dollars on the table.

Speaking of insurance companies, can you name all of the insurance companies your front-office managers have signed up for, your unified carrier registration fees and the percentile within your area? Were your fees balanced before your office manager negotiated with the insurance company? If not, you just lost money that you can never recover. Can he or she really negotiate on your behalf? What leverage do they have? How about the back-door arrangements and umbrella of insurance companies that affect your in-network status? Maybe it would be good to ask your office manager to review this with you next week. Understanding dental insurance is a full-time job. Maybe you could hire a dental insurance adjudicator who has worked for an insurance company and has a comprehensive knowledge of the dental industry.

Remember when you prepared your first crown? Your first set of veneers? Your first full-mouth rehabilitation in a patient with a gummy smile? It took time to learn how to diagnose and treat the case properly. Learning how to manage your business is no different. Our dental school curriculums have failed to provide the graduating dentist with a comprehensive knowledge of the business of dentistry. I suspect this is associated with time and money and the fact that there are many lifetime dental instructors/academicians who are not educated in this field. They may be great dental school instructors, but they can’t teach what they don’t know.

For those owners who run lean, efficient operations supported with systems, processes, excellent human capital, monthly review of all key performance indicators, return on investment (ROI) on marketing efforts, call tracking systems and a thorough understanding of their surrounding demographics, congratulations! For those who are struggling to survive and haven’t experienced a successful business operation, you need to take the time and learn how to do so. Surround yourself with mentors and experts in your field who have walked in your shoes and possess a comprehensive knowledge clinically and operationally and have the business acumen to help you. Your return on investment should conservatively yield you 10 times the cost of a qualified mentor or expert over your career. As the great golfer Lee Trevino said: “I don’t need advice on how to correct my swing from someone who hasn’t stood on the ninth tee at the Masters with the world watching.”

Historically, the dental profession has been fortunate to have realized net profit margins of 20–50 percent and beyond. Other industries would be ecstatic with a 10 percent net profit margin. For example, the big-box wholesaler Costco reported a 2.09 percent net profit margin for the fiscal year ending August 2015. Imagine if we had to operate on such low profit margins. Or, the grocery business that routinely operates on a 1–2 percent net profit margin. No wonder corporate and big-box dentistry is growing and will continue to do so. Why wouldn’t they?

Remember the saying, “Follow the money?” We all want to make sound financial decisions and maximize our ROI. In order to maintain and increase our profit margins, we need to take the time to understand the fundamentals of operating an excellent business built upon great leadership, systems, processes, human capital and continuous improvement. I have seen way too many dental offices that are struggling to make ends meet. Don’t wait until it is too late. We have all invested substantial money and time in our educations, and we deserve more.


Duke Aldridge, DDS, MBA, MAGD, DICOI, MICOI, FMISCH

Five Tips for Effective Morning Huddles

Anyone in practice knows how busy our workdays can be and how easily they can get out of control. To keep our days running smoothly, and to make sure we are maximizing our potential production, our team runs a morning meeting every day. Now, most offices I’ve seen are doing some type of morning huddle, but quite often, they end up becoming time for everyone to gossip or complain rather than an opportunity to set the day in the right direction. If you think your office needs some redirection, the following five steps can guide you to conducting effective and efficient morning meetings. 

1. Let go of the reins. The morning meeting should be run by the team, not the doctor. This means that each member present comes prepared to briefly review his or her assigned information and will take turns presenting it to the rest of team. As the team and doctor listen, the team member can ask questions.
2. Review the front office report. It is the responsibility of the patient care coordinator or office manager to go over the previous day’s treatment acceptance, what got on the books, and what went out the door and why. This creates a great opportunity for team members to assess how effective their communication skills are, as well as how they can approach things differently. It will also provide insight for scheduling coordinators on how to follow up with a patient. 
3. Review the hygiene report. Our hygienists are next. As they go over each individual on their schedule, they highlight what needs to be followed up with on that specific patient. For example, is there treatment pending, and why? The front office and assistants can provide input as to why treatment has been delayed so everyone can decide how to approach the conversation.
4. Review the dental assistant report. While I know we dentists love and get excited about our schedules, and we can chat it up with our wonderful and just-as-excited dental assistants (DA), this should be the briefest report of the huddle. The only thing that should be discussed is what procedures are being done and any specific questions the DA may have about the appointment. Also, this is the time when the team can solidify how the patient continues on with care … what’s next?
5.  Review numbers in “The Daily Huddle Report.” Every dental software program has the capability to generate reports. The one I recommend being reviewed in the morning meeting is called “The Daily Huddle Report.” This can be customized to whatever numbers you want to track and deem relative to the daily production. Don’t spend too much time on this. Numbers are important, but they can be boring. We all want to have great production and collection, but ultimately, the focus should be on patient care. Increased revenue is just a wonderful byproduct of quality care!

I enjoy coming into my office in the morning and seeing my team. I love to have fun with them, but our days need to start with positivity and laser-sharp focus. If we start the day off fully prepared and headed in the right direction, we are always more productive and relaxed and have more time for fun together as a team and with our patients.



Pamela Marzban, DDS, FAGD

Applauding Active Listening in Integrative Medicine

I’m thinking about practicing “integrative dentistry.” What do you think?

I plan to combine traditional, science-based treatments with holistic, alternative approaches that treat the whole patient. Throw in some aromatherapy, a dash of herbal medicines, and some acupuncture. Candles, too.

Apparently, integrative medicine is all the rage these days. Some see it as a much-needed and long-overdue conjoining of traditional medicine with spiritual, holistic approaches to prevention and treatment. Others see it as repackaged garbage.

Of course, I had to try it.

Still looking for answers to my medical problems, I was referred by a friend to an integrative-medicine doctor. His website listed his affiliations with two major medical centers in the United States. It spelled out his philosophy of disease and treatment and emphasized his belief in “balancing” the body’s systems so that one could achieve optimum health. His armamentarium consisted of “health coaching, acupuncture, herbs, vitamins, supplements, minerals, medications, hypnotherapy, nutrition, energy therapies, shamanic journeying, biofeedback, yoga, and IV nutrition, among other modalities.”

I saw all of his armamentarium, and it kind of whizzed past my soft, addled brain.

He also uses a practice model that I’d love to see a dentist try.

A patient looks up your name on the web and finds your website. Your bio is there, along with your treatment specialties and philosophy of care. The patient fills out a questionnaire and history.

Your office emails the patient for an appointment. Then the patient submits a PayPal payment for the full amount before the appointment. Nice, huh?

I drove to this doctor’s office, which was actually a room he rented in a massive antebellum mansion in the garden district of a major southern city. We went into an empty room with two chairs and a TV tray for his laptop. Small talk ensued. Then he asked me to tell him my story, and I did.

He listened patiently for almost an hour as I explained my symptoms, and he interrupted me only to get clarification and ask follow-up questions. He typed on his laptop the whole time as he listened.

Then he asked me a question I’ve never heard from another physician: “Is there anyone in your life from whom you need to ask forgiveness?” Wha? Me? Gee, that never occurred to me. What does that have to do with colitis?

He then asked permission to give my life story back to me. As he talked, he tied in all sorts of threads that I had mentioned and painted a coherent and reasonable picture of my life over the past few years. Incidents that I mentioned mainly as a way of keeping the story straight in my head he used to show causation. I was highly impressed. He suggested a million blood tests and that I go gluten- and casein-free. I was hoping for acupuncture but was disappointed.

And of course, all my follow-ups were conducted via phone after PayPal had been satisfied.

Wouldn’t that be fun? PayPal payments before patients come into the office? Before you call them back?

While I’m no fan of his practice model, I did like his active listening skills. I’ve had enough training to recognize a good listener who devotes his attention to me. It’s something people instinctively notice and respond to. As a patient, it ruffles my feathers when the doctor already is nodding with a solution in mind before I’ve finished giving him or her all the needed information. Even when I’m in a hurry and behind schedule, my patients have my attention.

So, while “integrative dentistry” may be way down the road, I have “integrated” some basic humanity in with my dentistry. That actually may be a novel approach.



Bruce M. Scarborough, DMD, FAGD

What Would You Do?

I have told you that my life is a total whirlwind.

I wake up at 5:50 a.m., and sometimes, I don’t get home until 9 p.m. After I am done seeing patients, I usually try to write up charts, or I run out of the office to a school function, or to a practice, or to a meeting, or to church. (I say I write up charts, but that really means that I answer letters from other specialists, complete my to-do list at work, look up products I want to buy, call patients, and then maybe write up charts. This year, I have been up-to-date on my charts once — and that didn’t last long.)

All that to say that say that my life is busy. As I was getting myself and my family ready for our trip to AGD’s 2016 annual meeting in Boston, I was running out of time to prepare.

There was a lot to do, but the two main things were taking care of the lawn and pool. In Florida, the lawn has to be mowed at least once a week or you will not be able to see the front door, and, yes, I am that lawn guy. The sprinklers have to be working. The pool has to be balanced and, yes, I am also that pool guy.

As part of preparations for AGD 2016, I took care of the lawn, but the pool was a different story. I realized I was out of chlorine. If the pool doesn’t have chlorine, after four days, it looks terrible, and it would cost a lot of money to get the water back to blue. I put the four empty chloride jugs in the back of my truck, and that is where they stayed for three days. I kept meaning to get to the pool store, but I was too busy running to something else.

My daughter was leaving for high school church camp the same day that my wife and I were leaving for Boston, and my 12-year-old’s baseball team was leaving for Cooperstown to play in a baseball tourney the day before our trip. Oh, and I didn’t tell you that my oldest son was coming with us to Boston so he could take college tours. (One of them was in Middlebury, Connecticut, which is three-and-a-half hours away from Boston, where he was going to meet the football coach and participate in the college’s camp. He also saw Boston College, Amherst College, and Williams College during the trip).

The day came when I was going to be leaving for Boston, and I still had empty chlorine jugs in my truck. I was staying after work to tie up loose ends at the office, and I thought I would go to the pool store after that. I left myself just enough time to make it to the store, and, of course, there was traffic. 

I pulled into the pool store parking lot at 6:03 p.m. and saw the owner’s car pulling out of the parking lot. Arghhhh! I just missed him.

I started to make a three-point turn to leave the parking lot when I saw the owner’s reverse lights turn on. I pulled up next to him and asked what he was doing. (See, it is a Mom-and-Pop store, and the owner and I are on a first-name basis.)

He said, “I am going back to the store.” I said, “No, it’s after closing time; go home and see your family.” I also know a little about him. He has a wife and three daughters, one who is getting ready to go to college.

He continued to talk and back up his vehicle, saying, “John, I am in the service industry. I want to take care of you. How else do you think I managed to stay in business for 31 years? I just ask that if you have cash, you use it.”

I told him, “I haven’t carried cash in 15 years.”

He then proceeded to turn on the lights in the store, the register on, and the credit card machine on for my transaction. What do you think the bill was? $19.48. He turned his car around, opened the store, and turned everything back on for $19.48! I was taken aback.

What would you do if someone was pulling into your office parking lot as you were leaving? I will make it easier: What if all the patients were gone at the end of the day, and the staff members were already changed out of their uniforms, and everyone was saying goodbye, and someone walked in? What would you do?

I can tell you that at my office, I would tell that person to come back the next day. (We might — and I mean might — see the patient if it was an extreme emergency. I mean, blood gushing and everything.) As I sit here and write this, that last sentence sounds pretty bad. But I am thinking I am not alone in imagining that this is what I would do.

See, this guy — the store owner — he gets it. He realizes that there is a corporate pool store down the road that stays open until 7 p.m. and that I would probably have gone there instead. (And he would have been correct.) He realizes that customers have choices and that they can change loyalties like the wind changes direction. He realizes that he has to be on all the time. This speaks volumes about him.

But what does this say about me? I don’t even want to talk about it. Maybe I’ll save that topic for another blog post.

What would you do? Would you turn the lights back on for someone who was walking in after-hours?



John Gammichia, DMD, FAGD

Cycling and Pondering Caries

I received my first 10-speed bicycle when I was 12 years old. I rode it everywhere. In the age when TV was still attached to antennas and personal computers did not exist, being outside and being active were the only ways to relieve boredom. It was a time when I could be gone all day and home for supper, and my parents seemed to be OK with it. (I don’t know how because I worry about my teenage kids when they are not at home now, and they’re good kids!) When you are out cycling for four to six or more hours, you cover a lot of distance, and I seemed to do it well without much thought. At least, that is what I think I remember.

And cycling back then was not so easy. No bike lanes, no helmets, cars did not give you any room, car and bus exhaust was dirty and smelly. It was terrible, and it was wonderful.

Now, I have a 21-speed mountain bike and an 18-speed touring bike, and I am happy to get out for 45 minutes to ride. I wear a helmet, I cycle on pathways restricted to pedestrians and cyclists, and it is great to get out there.

But I am also a fan of cycling. I have been a member of the Adventure Cycling Association for over 25 years, and I enjoy watching cycle racing, particularly road racing and, even more specifically, the Tour de France. Wow! Twenty-one days of racing in 23 days, where they cycle uphill faster than I cycle on flat ground. They race for four, five-, six-plus hours. Then they go to bed and get up the next day and do it again. Incredible. And when Briton Chris Froome wins the Tour for a third time in a row this year with a cumulative time more than four minutes faster than the guy in second place? Amazing.

Frank is another story. In his youth, he fancied the idea of being an international road-racing cyclist. He had the frame — tall, lanky, and lean, with a large chest and great lung capacity — and he could ride for hours at a high speed. Indeed, he did race competitively and was on Canada’s national team, but the pay was low, and there was not a great future in cycling as a career, so he became a teacher instead.

Frank loved teaching, and he loved dogs. (He loved his wife, too, but that is not what this story is about.) He would breed dogs, Shepherds and others. On his acreage, the dogs had lots of room to safely roam and run.

A few years ago, Frank rediscovered cycling. Like a kid in a candy store, he just glowed as he talked about his new bike (a Giant), the hours in the Alberta countryside, and the challenging foothills to the Rocky Mountains. Recently, he retired from teaching after 33 years and is returning to road racing again at the master’s level internationally. And he is winning, too!

But Frank has paid a heavy price. Hours on the road at high intensity depletes the body of nutrients, and the cycling world has come up with fast ways to replenish the body with these sticky, carbohydrate-laden energy gels (they are not even bars). In a relatively short time, Frank has developed rampant caries and has now lost several teeth. I recently fit him with a maxillary partial denture, and it looks, fits, and feels good, but I would rather have seen him with his own teeth.

And there is the dilemma. How can we, in dentistry, help these athletes fulfill their nutrition needs in these long, intense training and sporting endeavors so they do not destroy their dentitions? I don’t have the answers to these questions, but it is on my mind for every one of the 21 days of racing in the Tour de France.

I think I’ll go out for a bike ride and ponder this some more. If anyone else has ideas, I would love to hear about them in the comments section. And I think AGD would be the ideal organization to lead advocacy for oral health in sports like cycling as well.


Larry Stanleigh, BSc, MSc, DDS, FADI, FICD, FACD, FPFA

It’s International Hug-an-Assistant Day (Not Really)

Stop what you’re doing, go to your nearest assistant, and give him or her a big ol’ hug. Actually, on second thought, mayyyybe not. This might get a few of you in trouble. We don’t need that. 

My message today still rings true, though: Be nice to your team members. All of them. All the time!

I just went through the yin and yang of weeks at the office. You know exactly what I’m talking about. It doesn’t matter what the schedule looks like some days or weeks. Sometimes, you just end up with a cluster, and other times, you turn around and wonder how you got through the day unscathed. Often unpredictable, your quality of work life doesn’t always depend upon the patients, procedures, or staff. It’s not always in line with the amount of sleep you got the night before or what you ate for breakfast.

I know what it does depend on though: Your attitude.

For as long as I can remember, I’ve been a perfectionist. (I’m thinking back to days of reorganizing the fridge as a toddler or getting ticked because my ninth-grade English teacher gave me a B+ when she didn’t like my essay outlining my theory on dreams — and I still think she’s wrong.) Perfectionism is a blessing and a curse. Sure, it results in consistent restorative work and systematic approaches to leading, teaching, organizing, etc., but it also leads to frustration on my part when one of my teammates doesn’t have the right instrumentation at the ready, misses a clear scaling/root-planing opportunity, or breaks an onlay during try-in — the little things. It’s a daily experience and something I’ve battled in my short career. Once “it” happens, you can easily let “it” influence the rest of that patient’s visit, your morning/day, or even your entire week. I’ve been there, and it ain’t no fun!

We can do our best to teach, equip, and try to prevent these slips, but in reality, much of it is out of our control. Just like on the football field, as a quarterback, you can toss the prettiest pass downfield, but the play is successful only if the receiver catches the ball. If he doesn’t catch it, shake it off, and call another play. You can only control your part. Your attitude has a lot to do with whether or not the receiver catches the next pass you throw him. It’s also the only thing you can completely control in a situation where you aren’t thrilled with a teammate’s actions or lack thereof.

So I ask you to join me, not in giving your assistants random hugs, because … well, just no! But rather, join me in shifting your attitude in any given situation. And if you flunk your test, buy ’em coffee. Donuts. Chick-fil-A. A new car! Kidding on the last one. You get what I mean. Your attitude has the biggest influence on how that same teammate reacts the next time a similar situation arises. A poor attitude likely will result in the same actions (or even worse). A positive attitude shows compassion, support, and confidence in that teammate. These characteristics can only lead to good things.

So, put a smile on that face! And remember, no hugs. Just coffee and donuts.



Donald Murry III, DMD

Boston Harbors Memories

Every year, I get giddy with excitement (yes, I’m an official AGD nerd) when I make my reservations for the annual AGD Scientific Session. It’s always held during the summer, the best time to visit a city — unless of course you moved out of that city just two months ago, as I did. 

After calling Boston home for 19 years, I left it for California and, as luck would have it, the meeting came two months after I moved out of Boston. Seriously? Last year, I flew to the San Francisco meeting from Boston, a six-hour flight that could have been less than two and in the same time zone. Clearly, AGD wasn’t on my schedule. So back I went to Beantown for my beloved organization. This time, I had my social calendar and my continuing education calendar neatly organized. I thought it would be like every other meeting I’ve ever been to. It wasn’t.

Boston is a city of firsts, not only for the history of the United States, but for me as well. This was the first city I ever saw and in which I’d ever lived in the United States. Boston was home to my first college experience and my first serious job. It was the first place I was called “doctor” and where I ran the first of a gazillion road races. My first encounter with that white stuff that falls from the sky in January was in Boston and, oh, how I hated that. I even got my first driver’s license as a Boston resident — at age 30. (Have you seen Boston’s roads?!)

Every corner of that city harbors memories for me, and I thought it couldn’t squeeze in any more until I was at the registration desk and picked up my course manager ribbon for the first time ever. By the way, does anyone else love stacking up all their ribbons as much as I do? Then again, I made a memory when I addressed a packed room full of dentists to introduce a phenomenal speaker.

But the best part of Boston this year was meeting my fellow bloggers for the first time. While we don’t have our own ribbon (why don’t we?), we voluntarily carve time out of our busy schedules to reflect on and write about life as a dentist for all to read, might I add. When I met my fellow bloggers, it was as if I knew them already in some way. I hope they had as much fun as I did. As if belonging to AGD wasn’t enough to make me feel included in a large, purposeful organization, belonging to this small group of bloggers made me feel, well, giddy.

So I flew the six-hour flight back to California, happy that my ninth AGD meeting, like Boston, had a bunch of firsts for me. Great meeting, all! I hope to see you in Vegas next year!


Zeynep Barakat, DMD, FAGD

Why My AGD 2016 Experience Rocked

I finally attended my first AGD meeting, and I loved it! Please allow me to share my experience.

As soon as my 7-year-old daughter learned there would be an AGD Fellowship Review Course there, she wanted to attend.

However, she had to stay home with Mommy.

The morning of my flight, I arrived at Los Angeles International Airport to begin my journey to Boston. How did I know my trip was going to rock? I ran into a classic rock star! He was a member of Buffalo Springfield and Loggins and Messina.


Yes, Jim Messina and I checked our luggage at the same time. It was a thrill to meet him since I have enjoyed his music for decades. I had intended on only listening to the rock band Boston during my flight, but after that encounter, I had to also listen to Loggins and Messina. I can now honestly say that when I fly, I fly like a rock star.

Once I arrived in Boston, I attended the AGD meeting’s opening session. I thoroughly enjoyed the pageantry and speakers. If you attend next year’s annual session in Las Vegas, make sure not to miss the opening session!

At the conclusion of the opening session, I decided to go out and tour Boston. One of the historical sites that I was looking forward to visiting was fellow dentist Paul Revere’s house.

This was a thrill. By today’s standards, his house is small. But in the late 1700s, in order to have a two-story house with four rooms, you had to have been either a rock star or a dentist.

My Friday afternoon proved to be a lot of fun, too. I finally got to meet the Daily Grind legend himself, Dr. John Gammichia.

John was nothing but gracious to me. As an incredible added bonus, I met fellow Daily Grind bloggers Colleen DeLacy and Zeynep Barakat. I truly enjoyed my time with them.

I must say, I loved Boston. I did not care for the summer humidity (it made me sweat like crazy). But the city’s rich history more than made up for that. Hopefully, after my daughter studies the American Revolution, I will be able to return there with her.

As an example of the city’s history, I was able to have a drink where George Washington and Paul Revere shared a beer. I also had a drink at the tavern that John Adams frequented.

One of the great things about AGD’s annual meeting is that it takes place in a different city each year. With a little planning, you can earn continuing education credits and explore a new city along with your family. It may even take place in a city that you would never visit otherwise.

Luckily, next year, we’ll be going to Caesars Palace in Las Vegas. If you’ve seen the movie “The Hangover,” you know that Julius Caesar did not actually live at Caesars Palace. But trust me — it is a great place to have a meeting.

Andy Alas, DDS

Using Key Performance Indicators to Steer Your Ship

Since 2010, dentists have been working harder and longer. Overall, revenues are down, insurance reimbursables have decreased or, in some instances, been eliminated. Business overhead is up; dentists are retiring at an older age; group practices and corporate dentistry (growth of managed care plans) are alive and growing in numbers; dental schools are graduating more dentists; and patients have become more discerning in how they spend their hard-earned money. Dentistry has become a competitive business and will continue to remain competitive.

The most predictable way to become successful in this new dental economy is to maximize your productivity, increase your collections, implement proven systems, enhance your efficiencies, and examine your data on a monthly basis. Like a pilot who monitors the fuel consumption, flight path, and other aircraft systems during flight, it is incumbent for business owners to evaluate their data and possess a thorough understanding of their patient mix and competition to ensure excellent outcomes for their families, team members, and patients.

During my years of practicing, I was fortunate to have understood the importance of monitoring my key data generated through practice-management software (Eaglesoft). The challenge was consolidating the information into a manageable format. A previous career in the hospitality industry responsible for hundreds of millions of dollars, combined with my Master of Business Administration degree, taught me the importance of evaluating fundamental analytics to maintain substantial profit margins. On a monthly basis, our key performance indicators were consolidated into one report, and as a team, we evaluated the outcomes. As a result, we could all see where we needed to take corrective action to stay on course to meet our financial goals and objectives. It is amazing how this data can be used to gain buy-in of your business philosophy by team members. When you share this data with your personnel, you create accountability and legitimacy that you understand how to successfully operate your business while providing excellent dental care.

“What gets measured gets managed.”

The first step to evaluate the financial prosperity of your dental practice is to measure your practice’s performance against regional metrics designed with desired profit margins (38–40 percent is a realistic profit margin for the general dentist). Established industry benchmarks by practice type (general dentist, periodontist, orthodontist, etc.) are used by trusted experts who can help you make that comparison and, more importantly, identify and recommend corrective action. Meaningful benchmarks are excellent starting points to measure your business strengths and weaknesses.

“To measure is to know.”

Key performance indicators (KPIs) are measurable values that demonstrate the effectiveness of a business in achieving its key objectives. Almost all organizations use KPIs to measure their success in achieving their goals and objectives. Due to varying business philosophies and service mix (emphasis on surgery, endo, pediatrics, implants, ortho, or other), these numbers are provided as benchmarks only and will vary by region and number of services (measured with Code on Dental Procedures and Nomenclature [CDT] codes) provided. The following chart provides a look useful KPIs for the dental professional:

Expenses/Budget Categories	Dental Industry Normalization Expenses (%)Based Upon Net Collections
Personnel: includes all wages, taxes, benefits, worker’s compensation, retirement plan, incentives, etc.	19–26% (paying too much or producing too little); dental hygiene should be 28–33% of total production
Facility: rent/lease/mortgage, janitorial, landscape, maintenance, utilities, etc.	5–8% (lower if office is paid for)
Dental supplies	6–9%
Professional services: business mentor, accountant, lawyer, postage, office supplies, etc.	2–3%
Marketing: 80% internal, 20% external	5–10% (new practice) 3–5% (mature practice)
Credit card fees	1.8–3.0% (33% of all fees are charged)
Labs and CAD/CAM	7–12% (service mix dependent) Fixed, removable, implants, basic restorative
Doctor compensation: salary, taxes, pension, etc.	38% and up of all collections
Continuing education	2–4%
Office supplies	3–4%
Miscellaneous	6–8%

In most instances, maintaining overhead at 62 percent or less (all expenses before dentist compensation) provides healthy compensation for the doctor and future investment in your business (technology, expansion, and replacement of equipment). If your overhead is 62 percent or greater, it is time to start looking at ways to decrease expenses or increase production and collections. Remember that collections convert to cash, and cash is king!

In my next blog post, I will look at the importance of obtaining regular demographic studies to help plan your growth while providing the right service mix. Also, in a future blog post, I plan to provide a comprehensive list of all KPIs that should be measured and reviewed on a monthly basis.

Duke Aldridge, DDS, MBA, MAGD, DICOI, MICOI