GOAL SETTING THAT MEANS SOMETHING

Setting goals for one’s practice is an elusive, challenging, and often avoided task. For many dental owners, it is like throwing a dart at a board and hoping it hits the correct number. For others, goals are simply a faint memory of a great month that was long, long ago…and why can’t we do that again????

I’d like to take just a minute to review goal setting, and how I handle that task with my practices.

Goal setting should be based on reality. Too often I see owners set a goal that is in no way connected to the practice as it is currently constructed. I cannot tell you how disheartening this practice is for your staff. They feel as if they will never ever win. If the goal is set properly, it can and should be achieved and celebrated. If it is set improperly, it is something that weighs heavily on the back of all staff members and discourages them until they simply go back to doing what they were doing before all this crazy “goal” talk started.

OK, so briefly here’s how I set a goal:

The first thing I do is examine the Profit and Loss report and take a look at the actual expenses of the business. I look at how said practice compares to industry norms in relation to labor, supplies, rent, and overall cost of doing business. I then determine what is the break-even point of the practice; in other words, how much do we have to produce to cover all the cost of doing business BEFORE MAKING ANY PROFIT. The reason I want to know this is because production above the break-even line is about 70% profit, so it is much easier to determine what the goal should be set at if we know exactly where we begin to make a profit. I know the 70% number varies from region to region; I’m simply using it as an estimate—some places it’s higher, some places it’s lower.

Dental Practice Management

 

Now that we have an idea about the break-even point and what the expenses of the practices are, then I calculate all of the non-DDS production that the practice could generate—this includes specialists that come into the practice, hygienist production and any other non-general dentist activity. Here is an example (based on one month). I’ll keep it simple—I will include specialist and general-dentist orthodontic work even if the orthodontia is done by the general dentist.

Orthodontics (roughly one case of Invisalign) $ 4,500
Oral Surgery (roughly two cases of wisdom teeth extraction) $ 4,000
Hygiene (16 days at $1000 a day) $16,000
TOTAL non-DDS Production $24,500

So there we have it, the non-general dentist production with all its various components will produce $24,500 if we hit our targets. I always pause and look at my clients and staff and say, “ok what is tough here,” “what is out of reach?” These are all very important questions to ask when setting goals because the staff is very happy to sit back and let a doctor put a number on the board and have absolutely no belief that they can actually achieve it. The staff must be engaged in setting the goal, they must understand how we got the number, what the goal is based on, and have a clear idea of how they contribute to the overall production.

Now to take a look at Dr. days—in the simple example, let’s assume there’s only one provider in the practice, and he’s going to work the same 16 days as the hygienist has worked, basically for four-day weeks (based on one month).

16 Doctor Days (16 days at $3500 a day) $56,000
Non-DDS Production $24,500
TOTAL Doctor Days + non-DDS Production $80,500

I have to say, I have done this for 15 years, and I have never had a staff look at the projected goal and say, “well that’s impossible!”…usually, it excites them because they now know what a WIN LOOKS LIKE!

 

What I typically would do is stand back from the list of production items and say, “OK, what is the most difficult number to hit here,” is it the ortho? Maybe it is–that means we need to build a system that will provide us with two orthodontia cases a month. Maybe it’s the oral surgery, and we need to start thinking differently about referring cases out and whether we can get somebody in house to do IV sedation for our patients. Maybe it’s hygiene—what are our recall and new patient generation systems doing? So depending on what the break-even said, we can adjust the numbers slightly, and then we can sit back and look at what performance changes might have to be made to make those numbers a reality.

The key to proper goal setting is:

● The goal must be based on your Profit and Loss
● Goals must be achievable
● The goal must be clear, and the staff must know HOW they contribute to it
● Once you hit the goal, your behavior MUST change into FUTURE BOOKING (that is the next blog topic)

 

If you would like to put more focus on your education and patient care, and less time in the often frustrating management and marketing of your practice, we can help. Call us for a complimentary consultation and we will quickly show you the great positive impact we can make to your operations, brand, and revenue. 949.232.4788

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