As a Dental Clinic Owner are you a Sufficer? Or an Optimizer?

Take advantage of that most employed dentists are paid on commission.

Many dentists are entrepreneurs, they own and manage their practice, some run several practices. From their businesses most dentists enjoy a satisfactory income that meets their lifestyle needs plus savings for retirement. I would categorize this type of dentist as a sufficer, they could probably make more money with some level of effort but they are happy with what they have and with their prospects. There is absolutely nothing wrong with this approach and some studies, not related to dentistry, have shown that sufficiers tend to be a bit happier than optimizers.

Coming from Industry I am used to the situation where staff expect a guaranteed monthly paycheck with some element of incentive on top of their salary. For sales, the incentive rate can be quite high, for finance and admin generally lower. From my perspective, the concept that your highest revenue generators work almost solely on commission is unusual and presents some great opportunities for optimizing your dental practice. In Singapore at least, and I believe in many other countries, dentists are typically paid a percentage of the revenue they generate. Straight commission, if they generate nothing they get no pay. If they generate say $100,000 in production in a month, maybe they get $50,000. As the owner of the clinic you get the balance to cover overheads and to give yourself something for your hard work towards optimizing your clinic.

I often think running a clinic has analogies to running an airline, well maybe that is not so accurate today with Covid destroying airlines earnings. But think back to the days before Covid, what made an airline successful? High load factors, filling as many seats as possible and attracting premium passengers to fill the business and first class sections,. As for an airline that only makes money when the plane is in the air, you are only making money when a patient is in the chair. A plane on the ground makes nothing, so does an empty chair.

Think of patients that want high revenue procedures as your premium passengers and the patients that come once or twice a year for a check up and polish as your economy class passengers. Like an airline you need both to maximize your earnings.

An airline has to pay the captain and first officer whether the plane is full or empty. As dental clinic owner you pay your dentist based on the balance of high revenue and lower revenue patients he or she treats.

A clinic owner can greatly increase his business earnings by hiring a high revenue generating dentist paid on a share of production charged. High revenue will come from a dentist that has the skills to provide high income procedures to your premium customers. It is likely you will need to support the dentist with a dental assistant but the costs will be small percentage to the added income you can enjoy. Also an effective dental assistant will enable the dentist to see more patients and thus pay for themselves.

By optimizing your practice you will enjoy a higher monthly income, and your practice will be worth more when it comes to sell. Not only because it is more profitable but more importantly the practice in not reliant on you producing income but has a pool of talent who can ensure the earnings will continue into the future.