Welcome back, I am Scott Dudley with MACC Academy. If you own a general dental business, do me a favor. Divide your collections over the last 12 months by the number of operatory’s you have. This number will tell you how efficient your business is.
Many will only look at EBITDA or profitability as a percent of revenue – and this is a huge mistake. Let me explain why with an example.
After paying doctor salaries, the EBITDA or profitability of two different, 4 operatory practices, is 15%. Office #1 has collections of one million. Office #2 has collections of $2m. Although the EBITDA percentage of both offices is 15%, office #2, at $300,000, is twice as profitable as office #1. It is also twice as valuable.
Fairly obvious, but consider the fact that the $2m office’s profitability could slide to 8% and it would still have more EBITDA, be more profitable, and be more valuable than the $1m office.
While the whole dental world is focused on EBITDA, profitability, and overhead percentage. We here at MACC Academy are focused on systems and training that will increase revenue.
In my example, the $2m office collects $500,000 per operatory per year. The $1m office collects $250,000 per operatory per year. I hope you understand now why that metric is so valuable to understand….. And, by the way, the $1m office -it will usually need MORE patients and to spend more advertising dollars than the $2m office because of its inefficiencies.
So, I ask you again, what are your collections divided number of operatories? No matter what the size is of your business, If you collect less than $400,000 per operatory per year, our systems and strategy's will help you.
By focusing on schedule improvement, value creation, patient throughput rate, and the expectations and accountability of doctors and staff – MACC Academy will move your business towards $500,000 per operatory per year.
Sign up for a no obligation consultation. I look forward to working with you.