25 Proven Tips to A Profitable Dental Practice

25 Strategies to Make Dental Practice More Profitable

(This post was originally published February 11, 2015 and was extensively updated on October 2, 2021)

If you want to know how to make your dental practice more profitable, you're in the right place.

Have you ever thought:

How do I make my dental practice more profitable?

If you are a dentist, you know that dentistry can be a tough business to excel in. Patients don’t always appreciate the difference between an average dentist and a great dentist. Patients’ lack of understanding may leave many practices struggling to find concrete and discernible ways to improve their practice, increase their profit margins, and make the money their skill deserves.

In this post, we discuss 25 ways for you to increase dental practice profitability, including changes in method, staffing, advertising, and administration. Hopefully, by the time you finish reading, you will be ready to put together a blueprint for a more profitable practice.

We know that dental SEO is critical to the growth of a practice, but it isn't the only way to market your practice or to increase your profitability.

So hold on, sit back, and let's go through 25 ways you can make your dental practice more profitable.

Listen to the previous version of this blog post:

Understanding the Business Side of Dentistry

Any conversation about profits should focus first on the business side of dentistry. While it’s common for dentists to focus on patient care and that’s undeniably important – there are practical considerations that must be part of the conversation.

Various factors contribute to how profitable your dental practice is, including:

  • Your overhead costs, including rent, payroll, and supplies
  • How much you charge for services
  • How many patients you have
  • Where your practice is located

You will need to address each factor to maximize your profits.

Average Dental Practice Profit Margin

It is always useful to know how much profit dental practices in the United States earn on average. According to Dental Economics, the average overhead percentage of dental practices in 2018 was 64.5%. If you reverse that, you can see that the profit would be 36.5%. That number represented a two-point increase from 2017.

Of course, profits can and do vary based on the factors mentioned above. If you are paying for rent in a high-cost building, your profits will likely be lower than they would if you were renting in a lower-priced area.

Average Dental Practice Revenue

Revenue for dental practices starts with gross billing. According to the American Dental Association, the average gross billing for general dentistry is $666,060, while specialized dental practices have average annual billing of $935,760. The Dental Economics survey we mentioned above says that the average gross revenue is over a million dollars, but their results were based on voluntary responses and not scientifically selected samples.

The difference between billing and revenue is that revenue is income and accounts for any expenses and liabilities your practice may have.

Dental Practice Success Rate vs Failure Rate

You may have heard that about 25% of new businesses fail within their first five years. The good news for dentists is that dental practices have one of the lowest failure rates – and conversely, one of the highest success rates – of any industry.

According to Dental Economics, the failure rate for dental practices is between 1% and 2% annually. This is very low compared to other industries. However, it doesn’t mean that you can afford to ignore the risks, and part of that is learning how to maximize your profits.

We should also note that the COVID-19 pandemic decreased profits for most dental practices. In March and April of 2020, at the start of the pandemic, dental visits were down between 70% and 80%, although numbers have significantly improved since then.

25 Strategies to Make Your Dental Practice More Profitable

Now, let’s look at 25 proven strategies to help you increase your revenue and improve the profit margins at your dental practice.

1. Educate Yourself and Your Team on Better Business Practices

Before anything else, focus on instilling a basic understanding of superior business principles in yourself and your team. Consider how each action of the day impacts the bottom line; put a high value on customer satisfaction; and learn to recognize and rectify wastes of effort, time, and resources. By teaching everyone on the team to pay attention and think about profit, customer satisfaction, and other concepts of value, you will get better returns on every other profit-improvement strategy you employ at your practice.

The key is making sure that your staff feels invested in the practice’s success. Let them know that helping you to make the practice profitable will also make them rockstars in their positions. Most employees will be receptive to this approach. Often, all it takes is an explanation as to why things are done a certain way, as opposed to just saying, "Do it like this."

2. Create an Organized Marketing Plan

More profitable practice through organized dental marketing plan

You may have something resembling a marketing plan in place already, but how much of it is a plan and how much of it is a haphazard collection of marketing efforts sporadically enacted?

A proper dental marketing plan should be organized from beginning to end, including a coherent map of targeted campaigns, unified efforts, and incentives understood by everyone in the organization.

When you have buy-in from everyone in your office, they can recognize potential issues, offer insights, and will often pay attention to small details that might have slipped past them if they weren’t involved in the big picture.

Typically, you want to make sure that online marketing is at the front and center of this plan.

3. Establish Goals

Setting reachable, challenging goals for your practice leads to better productivity than aimless endeavors or stretching for impossible results. Look carefully at your current profits, marketing success, etc., then set realistic goals that will make each team member work hard and ultimately, succeed.

Morale levels become increasingly important with every change you make to your practice. If you or your staff lose motivation, your profit-increasing efforts will be for naught.

Everyone should know and understand the goals you have set for them and the overall practice. Talk about them, debate them, and work out the best approaches to achieve those goals. Understanding what’s going on gets everyone invested, and invested employees work better.

The best way to increase your practice profits is to set an overall goal to do so, then create smaller individual goals to help you get there. For example, you might set a goal to cut overhead by 5%, attract 10 new patients a month, and perform 15% more elective procedures.

Remember that SMART goals are Specific, Measurable, Achievable, Realistic, and Time-Bound. A goal to attract 10 new patients a month for 120 new patients in a year is a SMART goal. If you say only that you want to attract new dental patients without making the goal specific, that’s not SMART.

4. Utilize Understandable Incentives

Incentives, used correctly, push your team to excel and improve profits across the board. But not all incentives work equally well.

There are two factors to consider when developing incentives to improve productivity at your dental office:

  1. How incentives are earned.
  2. What those incentives are.

The first should be tied directly to valuable metrics, such as positive results from customer surveys. There are pros and cons to offering cash rewards, with most experts agreeing that they work best when there is a clearly defined goal, measurable metrics for the reward, and strict controls in place.

If you prefer not to offer cash, consider offering additional employee benefits, paid vacation time, and other rewards that will maintain employees’ association with your practice over time.

5. Learn the Value of Good Presentation

A quality presentation goes a long way in improving the profitability of your dental office. It’s not enough to be the best in town or offer the best service, you need to present your business in a way that backs up your claims. This means investing in a good camera for putting together marketing materials (or hiring a professional dental marketing firm) or showing patients the condition of their teeth, etc. You may want to remodel your office interior and exterior and hire a web developer to make you a high-quality dental website.

In many cases, presentation may affect profitability even more than the quality of your practice and services. Combine both for maximum effect.

Unique presentations work wonders as well. For example, if you show your patients the state of their teeth with a high-definition video on a big screen TV, pointing out problems and explaining them like a sports commentator explaining a play, that will leave an impact. An impressive presentation will encourage your patients to come back, and it may inspire them to recommend your practice to their friends and family.

Presentations done right have an impact, and impact means profit.

6. Revamp Your Patient Experience

Few people think of their dentist visits as a positive experience. Changing that mindset is the key to success in a dental practice, and that means making the patient experience as impressive as possible.

Everything you do should be viewed through the lens of the patient experience because happy patients come back, refer their friends and family to you, and leave glowing Yelp reviews. Happy customers drive every success story.

You should put your office manager in charge to take the lead in creating a stellar patient experience. As you teach your office manager the importance of a positive patient experience, they will get a better feel and understanding of how to run a dental practice.

7. Improve How You Receive Calls

calls to dentist

If you don’t have a plan for receiving calls, a method discussed among your team, or a system for handling missed calls and voice mail, then you are missing out on potential profit. Every conversation with a potential or current patient should be treated as a sales call.

Your receptionists sell your practice, and that means implementing all the attention to detail, scripting, and secondary considerations that a sales agent would when communicating by phone.

8. Automate When Possible

Automation is key to improving worker efficiency, and in turn, to increasing your profits. It requires more staff hours to manually enter data than it does to use automated workflow software. It requires more effort and more staff to answer every phone call than it does to have an automated system that can greet patients, triage emergency calls, and allow you to call back at a convenient time.

Automation is also ideal for following up with patients by email or phone after a visit. Follow-up calls, particularly with patients who need to reschedule or who may be on the fence about choosing your practice, translates to lower profits.

Automation, when used properly, can make your dental practice more profitable.

9. Treat All Interactions as Marketing

Every conversation you or your employees have with a patient is an opportunity to market your practice. Whether you are setting an appointment, chatting during a procedure, or following up to explain the proper care after a procedure, your patient interactions impact the patient’s willingness to come back. So, treat these interactions as what they are—practice marketing.

That doesn’t mean you should be making the hard sale every moment you are with the patient. All it means is that you should be mindful of the interaction’s value beyond the immediate result.

10. Practice, Practice, Practice

Knowing that you need to prioritize good patient interactions is important, but knowledge isn’t enough.

Come up with potential patient scenarios, write scripts for them, and have receptionists and hygienists and assistants sit down and practice their patient interactions.

This method might take up a bit of time, but it goes a long way to improving patient interactions, especially when unusual or confrontational situations arise.

When you get your team members familiar with the different ways a conversation with a patient or potential patient might go, they won’t panic when it happens. You will see improved morale, improved efficiency, happier patients, and through all that, more profit.

11. Specialize Your Hygienists

Specialists do better work. They are more focused in their efforts, typically working to their strengths, and can better maintain an edge in the field by narrowing the topics where they pursue professional learning and development.

Of course, specialization doesn't need to be about dental expertise. Some hygienists get along better with certain patients under different circumstances. Some can't stay focused doing the same simple procedure all day every day while others perform at their best doing routine work. Identify what your hygienists do best and put them on those tasks. Allowing your hygienists to have some agency about what they do and when they do it will translate to greater efficiency and more profits.

12. Consider Picking Up a New or Exciting Procedure

Nothing beats the marketing potential of being the only option in town for a cutting-edge technique. Being the only provider for a service gives you an automatic competitive edge that can help you to recoup any expenses associated with learning the new procedure.

It doesn’t even need to be a particularly difficult or special procedure. It just needs to be new enough that other practices are not offering it, something that’s easy to advertise and explain, and most importantly, something that your patients will want.

13. Build a Specialty

Focusing your entire clinic towards a particular type of problem, a particular type of client, or a particular procedure can also lead to great profitability. It will require time, research, and dedication to develop a specialty, but it’s an extremely effective route to making more money.

To build a specialty, you'll typically need to develop a unique selling proposition (USP). A USP is exactly what it sounds, something that makes you or your office unique enough that others will seek you out because of it.

Read more about developing a USP: How Can a Dentist Develop a Unique Selling Proposition?

You might lose business from outside of your new specialty, but by becoming the go-to dental office for a specific type of patient, you can dominate a section of the market AND improve efficiency by refining your efforts.

14. Wow Factor

Wowing your patients should be a high priority. You can impress them with your ads, your building exterior, the inside of your office, great and personalized service, etc., as each of these elements leaves an impact. In other words, you want a practice that doesn’t look like every other dentist’s office in the country.

Adding the wow factor to your practice doesn’t have to be an expensive endeavor. Being a pediatric dentist that focuses on creating a painless, fun experience for kids offers as much wow factor as being a high-end office with expensive furniture and nice paintings.

15. Collect Information

Any business can benefit from gathering information on its clientele. You can get a better look at demographics, satisfaction, return rates, and other data you might collect, especially when you use it in a focused way with the right dental practice management software. This allows you to adjust how you approach patients, advertise, and service your patients for maximized efficiency.

You can also spot weaknesses and act to shore them up with the proper data at hand. Using this method to identify potential strengths and weaknesses can help you to build on your strengths and improve your weaknesses while increasing your profits.

16. Manage Your Data Properly

How many hours do your employees spend collecting and organizing data that could be spent doing other things if you invested in proper data management solutions? Collecting, sharing, checking, and organizing patient data can be a nightmare, but it shouldn’t be.

Taking the time to improve your data management system reduces time wasted by employees dealing with dated systems and creates better sources of information for your marketing efforts to retain existing patients and attract new ones. Keep in mind that all data management systems you use in your practice must be HIPAA compliant.

17. Modernize Your Administration

Data isn’t the only place to modernize. Your entire administrative system can likely benefit from improvement.

A business process software can unify your data, keep your forms in line with governmental regulations, and even allow for patients to securely fill out paperwork in compliance with legal regulations before they walk in the door. A modern dental office isn’t just one with the latest tools in the back, it manages every aspect of the business with unparalleled efficiency.

18. Keep Learning

Dentists who stop trying to improve, both in their medical expertise and their business, stagnate and fall behind. Momentum can only take you so far and it’s essential to stay on top of changing research in dentistry.

Professional development can help every member of your team, from your front desk staff to hygienists and dentists. It is an opportunity to learn new procedures, new techniques, and new methods of treating patients. Most states require PD for dentists, and you should not be afraid to go above and beyond the minimum requirements to make your dental practice stand out from its competitors.

19. Consider Using Mobile Technology in Your Office

A dental office that adopts the latest technology spends more upfront but ends up at the forefront of earnings. Mobile apps and tablets may not feel particularly useful for you or your patients, but beyond any additional functionality provided by modern tools you will also improve your image, developing that “Wow Factor” we discussed earlier.

Of course, there are dozens of ways for a savvy office to use mobile technology to improve efficiency, so the wow factor alone is a bonus, not the whole package.

20. Stay on Top of Dental Breakthroughs

Some breakthroughs have a minimal impact, while others completely change the dental industry. If something big lands and you are not waiting for the product to hit the shelves or the technique to receive approval for general use, you are not paying enough attention to what’s happening.

This goes beyond cutting-edge techniques, which have their place in improving profit at a dental office. It also goes to simple changes, such as less expensive ways of doing the same procedures, methods that cut procedure times in half, and any other number of profit-increasing breakthroughs. The investment of time to stay abreast and be the first to make these changes will more than pay for itself in terms of profit, customer satisfaction, and professional reputation.

21. Expand Assistant Responsibilities

Too many dental offices undervalue and underrate their assistants, and in doing so lose valuable profit potential. There are two key factors to improving profits that tie directly to assistants:

There are two factors to consider when developing incentives to improve productivity at your dental office:

  1. Every hygienist should have an assistant, one they can work with effectively and regularly. The improvement in efficiency simply can’t be understated.
  2. Tasks that can be left to assistants should be left to assistants if you want to maximize profitability. Putting highly-paid dentists and hygienists to work on tasks an assistant could handle only wastes valuable time. If your dentists have nothing better to do with their time, your problems lie elsewhere.

22. Review Current Pricing Structure

Has it been a while since you changed your prices? If so, you should do some competitor research to see if it’s time to raise your prices.

The cost of living affects everybody. If you have increased your overhead by giving raises to your staff or paying more for rent or supplies, then your prices should increase accordingly. Leaving them the same will negatively impact your profits over time and can make a big difference, depending on where your practice is located and how much you charge.

You should review costs on a procedure-by-procedure basis, evaluating the time, supplies, and staff required for each. Then revamp your prices, making sure to communicate the changes to your patients in a way that emphasizes that your priority is their care. After you have done these things, create a regular system for reviewing prices to ensure you don’t fall behind again.

23. Reduce Insurance Dependency

Decreasing dependency doesn’t mean that you stop accepting insurance altogether. Instead, it may mean starting a dialogue with patients to explain the benefits of a membership program where they pay a fixed amount each month in return for the care they need. This method allows them to spread out the costs and avoid insurance company restrictions on care. On your end, it reduces the time that your staff spends filing claims and allows you to provide the best possible care for your patients.

24. Develop a Patient Reactivation Program

What do you do when a patient doesn’t return to your practice? The answer for a lot of dentists is that they do nothing. That’s a mistake because many inactive patients would come back if you paid a bit of attention to them.

Your patient reactivation program can and should be simple. It might involve sending emails or texts to patients who haven’t visited your practice in a while. It could also include having your staff call people or mail flyers to their homes. Offering a discount for them to return can be a huge incentive, particularly with patients who don’t have dental insurance.

25. Evaluate and Refine Your Practice’s Patient Collection Strategy

Nobody likes being the person who calls someone to ask for money. It is for that reason that many dental practices don’t do a good job of collecting the money that is owed to them.

Collections shouldn’t be treated as a negative thing. You provided services that a patient agreed to pay for. Some strategies that may help include creating an automated system of follow-ups, offering to create payment plans, and letting patients know that you are willing to work with them to continue to provide necessary care while they pay what they owe.

Final Thoughts on Improving the Profitability of Your Dental Practice

Ultimately, most of the steps a dental practice should take to improve profitability come down to a few core concepts.

  1. Understanding what customers need and want through research, data crunching, and honest conversations.
  2. Standing out to patients while meeting their needs and wants by using impressive presentations, perfect customer service, and unique treatments they can't get elsewhere.
  3. Eliminating waste and improving employee efficiency through morale-building efforts, practice sessions, improved software solutions, and a general buy-in to the goal of helping patients have a great experience.

If you can keep up with those basic ideas, and always consider how your efforts affect those areas of your practice, you will no doubt grow, and develop a more profitable dental practice.

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