or a quick glance at the 3 principles, read this summary first. If you don’t have time to read through the whole article, this summary should give you exactly what you need when trying to cut dental office supply costs. This review has 3 parts:
- Be organized
- Look for other opportunities to save on purchases
- Look for ways to recycle and reduce your carbon footprint
Context: The two ways to increase your bottom line
When it comes to the financial side of running a successful dental office, all dentists know the commonsense equation at the heart of it all: Net Income = Gross Income – Expenses.
Yet, this simple equation often becomes the most challenging one to master in practice. To make it clear why, let’s keep two simple cases in mind:
- Dental office A: grosses $1,000,000 and has dental office costs that are 85% of gross income.
- Dental office B: grosses $500,000 and has dental office costs that are 50% of gross income.
So, is the million dollar practice truly better off than Dental office B?
It’s easy to see why the million-dollar practice is WORSE off. If we plug the numbers into our equation for net income, we see the following results:
- Dental Office A Net Income = $150,000
- Dental Office B Net Income = $250,000
You’ve probably seen this comparison made before. Yet, it’s often the case that dentists will still fall into the trap of Dental Office A. Why is this the case? As part of human nature, it can become very easy to blur the lines between needs and wants. This leads to our emotions getting the better of us, and forcing us to justify our actions after the fact. The case is the same when looking at the cutting dental office supply costs.
Considering the information and advice on the internet about cutting dental office supply costs, one important factor seems to be missing: A commonsense mindset coupled with effective, and practical steps on how to make it happen…consistently.
Why Cut Costs?
The example mentioned above shows that a cost-driven dental office can be more profitable than a purely revenue-driven one, despite bringing in less revenue. The reason is simple: The Net Income equation is meant to widen the gap between gross income (revenue) and expenses (costs). Increasing your revenue does not necessarily widen the gap with expenses. In fact, many times the expenses of a practice increase with an increase in production (revenue).
This important principle makes the focus on cost-cutting all the more important. Here’s how you can take steps to make sure your dental office (if not already) can become a cost-effective and highly profitable practice.
Golden Rule: Make Cost-Cutting an Obsession
Make it an obsession to cut down on costs. Question everything you spend and look for a better way. Even small savings multiplied over your career will accumulate and add a significant amount to the bottom line.
The Details Behind the 3 Principles to Cutting Dental Office Supply Costs
- Observe your usage patterns over time, and give yourself enough leeway time to look for sales
- You want to have an intimate understanding of EXACTLY how, where, when, why, and how you and your dental team use supplies.
- Once you are aware of your usage patterns, you can give yourself enough time to search for deals in different places.
- Internet access opens us up to many more opportunities than were available before; and, within a short time span.
- Giving yourself enough time to search will make more opportunities available to you.
- Always look for sales
- Practice makes perfect. The more you look for sales, the better you will get at spotting the great ones from the average ones.
- You will also naturally develop a system that works best for you and your dental office, eventually saving you time AND money.
- Work with a sales representative you can trust
- The key to working with a sales representative (if you do work with one) is to ensure that you can trust them.
- A smart sales representative will know that success for you also means success for them. This means that they will work with you to get your practice to a higher level .
- Working with a sales representative also involves give and take. Even if you can find a lower price for every item, you want to focus on the long term relationship with your sales representative. In the long run, fighting tooth and nail for every item may waste more time and resources than you might be comfortable with.
A great place to research different supplies and to find good deals is right here, on our Hot Deals section. It’s always being updated to give you the latest and greatest deals from across the industry.
Look for Other Opportunities to Save on Purchases
- Offer different terms of payment or methods of payment:
- Pay in cash if you can.
- Find payment terms that might work best for both you and the seller.
- Consider refurbishing or reupholstering chairs and cabinets
- Large equipment like chairs and cabinets can cost a fortune.
- They are also build to last.
- Refurbishing or reupholstering can be a great way to maintain the professional aesthetics of your dental office without having to make large purchases more frequently.
- If need be, look into second hand equipment:
- Depending on things like your current gross income, it might be worthwhile to look into second hand equipment.
- Not only can you find some great quality equipment (relatively long lasting), you can also find amazing savings opportunities.
- Make sure you take some effort to find trustworthy second-hand equipment providers.
To learn more and compare what’s out there, you can use our Product Comparison section. You’ll find a comprehensive listing of all equipment and supplies from different manufacturers and distributors.
Look for ways to recycle and reduce your carbon footprint
- Recycle your paper and paper clips:
- The list can grow as long as you want it to, but finding ways to reuse existing supplies can be a great way of reducing your costs significantly in the long run.
- The sum of all parts is what your aim is. All the little changes, efforts, and savings will pile up over time.
- Consider cost-effective digital methods:
- The proliferation of productivity and administrative apps and tools has made it easy for dental offices to go green.
- Finding cost-effective (often times, FREE) methods of replacing paper and pen can dramatically reduce your variable costs over time.
For a list of different companies that tailor digital tools to dental offices, check out our Directory Section for a comprehensive listing.
These 3 principles, along with the golden rule for cutting dental office supply costs, should give you and your dental team the upper-hand when it comes to tackling your overhead expenses throughout the year. It’s finally time to move from being a low-profit, revenue-driven office to a high-profit, cost-driven success story.