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a blog by Chris Barrow

Are you flying blind?

As I mentioned in a social media post last night - my Wednesday was spent working through no less than 9 sets of financial data, sent by clients for review and comment.

  • Calculating Key Performance Indicators (KPIs) and comparing them to benchmarks;

  • Calculating Operating Cost Per Surgery Per Day (OCPSPD) and comparing that to benchmark;

  • Looking at the impact of increasing wages on profitability;

  • Calculating the Average Daily Yield (ADY) of every fee-earner (gross revenue generated per day from either NHS delivery, private treatment sales or plan revenue);

  • Conducting the crucial analysis of the profitability of each individual fee-earner;

  • Establishing ADY targets for every fee-earner (as an alternative to the currently useless conversation around reducing percentages or moving to sliding scale - it's about production, not pay);

  • Analysing the profit contribution of each "product line" (a.k.a. treatment modality) and determining winners and losers in the product mix;

  • Calculating Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and using that to suggest a likely goodwill valuation for the business in current market conditions (and then looking at exit strategy);

  • Reviewing current prices and suggesting price increases to maintain target profit margins.

All of the above are the dental business equivalent of a pilot's instrument panel.

I have a simple question for you this morning........

Have you done the same?

Or are you flying blind?

Let me know if you need help.

419 views2 comments


I'd love to know where Invisalign fits in...with lab fees approaching 2K now.

Replying to

Morning and Happy New Year - I'm currently working on an "Invisalign profitability calculator" in collaboration with a dental accountant - I've asked for this because so many of my clients have expressed concerns around the diminishing/vanishing profit margins in this area. Watch this space.

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