Five Surefire Ways to Boost Your Bottom Line
Posted Apr 28, 2011 in Management
Over one-third of respondents to LMT's 2008 Fee Survey say their profitability has increased in the last two years. Here are the top five strategies they're using to boost their bottom lines:
1. Streamline internal operations. Respondents are looking at their daily procedures with an eye on maximizing efficiency, enhancing productivity and improving the final product. For instance, one owner-respondent has eliminated unnecessary steps from production, allowing him to take on more cases. "By converting from the submerge to the steam method to cure my acrylic appliances and pouring up groups of appliances at once rather than one at a time, I've become more efficient," says Cade Tippett, owner of Cadetech Ortho Lab, Stephenville, Texas. "As a result, I'm doing four to six more cases a day at about $36 each. It's like I've gained a whole additional account."
Other respondents are investing in CAD/CAM equipment to automate processes, switching to four 10-hour workdays to enhance productivity, adding microscopes to every step of the fabrication process, and incorporating lean manufacturing principles to eliminate waste and inefficiencies.
2. Invest in training. From manufacturer courses and in-house videos to high-end classes at Dawson Academy, LVI or Pankey Institute, our survey respondents are committed to raising the expertise of their staffs. "The best way to command higher fees is to provide the best restoration you can, and that requires education and keeping up with the latest technologies," says Timothy Wright, owner of Wright's Dental Laboratory, a one-person C&B lab in Apalachin, New York. "If clients are satisfied with your work, they will see the value in the price you charge." And don't forget to toot your own horn: letting your clients know what you're doing to advance your skills and the new techniques you've learned can give your laboratory a valuable competitive edge.
3. Focus on cases with a higher profit margin. A surefire strategy for boosting your bottom line is to focus on cases with a higher profit margin, such as all-ceramics, implants or less labor-intensive pressable restorations. For example, since Scott Emett, owner, Riverside Dental Studio, St. George, Utah, began offering Empress and Cercon restorations, his laboratory's overall profit margin has increased by 8%. "These restorations have about a 30% higher profit margin than the other restorations we offer, and they're in demand so we can charge more for them," says Emett. "As we get through the learning curve with the technique, there will be less labor involved, further enhancing our profits. This is the most effective strategy I've ever used in my lab for raising my income and increasing business."
4. Tap into a niche area where your expertise is in demand. For instance, in the implant specialty, complex restorations like overdenture bars are growing in popularity, creating a window of opportunity for some proactive laboratory owners. "We are a lab limited to implant dentistry and our fees reflect the extra labor and knowledge required to produce implant-supported restorations," says David S. Weber, CDT, owner, Sun Dental Laboratory, Medford, Oregon. "Competing by offering a higher level of service, care, knowledge and craftsmanship, and charging the dentist for the value of that level, has been a winning strategy for us."
In the denture arena, aging boomers are demanding something more than a conventional denture and they're willing to pay for a cosmetic restoration that incorporates characterization, custom gingival toning and custom tooth characterization. "I've started fabricating high-end dentures and partials and these types of cases separate me from my competitors. I don't compete on price," says Danny Roberts, CDT, Hawkeye Dental Studio, Cedar Rapids, Iowa.
5. Crank up customer service. From custom shades, faster turnaround times, client education, in-office consultations, no-questions-asked guarantees and free pickup and delivery, respondents are delivering value-added services to enhance clients' overall experience with their laboratory.
For example, Weber is offering a unique implant parts rental program that makes it easier for his clients to do implant dentistry. Here's how it works: The dentist faxes the lab the surgeon's post-op instructions and the lab uses the implant brand, diameter and flare on the healing cuff to pick the correct corresponding impression post out of its stock; it autoclaves it and sends the post to the dentist. Then when the actual case comes in from the dentist, the office returns the lab's post.
"Our customers love the program because they don't have to stock their own components and keep them organized," says Weber. "We also send out the posts with a step-by-step outline of the impression appointment, complete with time-saving tips. This way, if a doctor is new to implants--or has a brand new staff member--he knows exactly what he needs to do."
The lab also allows its clients to rent torque wrenches from its extensive inventory, allowing clients to avoid buying a wrench--which can range from $200 to $750--for an implant system they may never use again.
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