THINKING BUSINESS
a blog by Chris Barrow

Simon’s KPI’s

KPI’s – key performance indicators – are the magic numbers that can tell both you and an outsider exacly what’s going on in your business.My favourite KPI’s for dentistry have always been (as a percentage of total sales):

  1. Lab bills (10% for GDP’s and 14% for funky dentists)

  2. Material costs (7% for everyone)

  3. Staff costs (17.5% normally, rising to 22% of you salary your hygienists)

  4. Profit before tax (between 25% and 40%, depending on number of dentists in the building)

That’s kept me going for some years now – then along comes Simon Hocken as my business partner – and I discover that he has a different set of criteria:

  1. ADY (average daily yield per dentist) – aim for £1000 for an associate GDP and £1500 for a principal GDP

  2. Net profit per month – duh

  3. Daily bank balance and rolling average balance (is the trend up or down)

  4. Active patient list size per full-time dentist (only needs to be 1000 if you do what’s right)

  5. New patient numbers per month (<10, 15-20 or +20?)

Add the two sets of KPI’s together – and you can analyse and coach a client very quickly indeed.

Sad truth is, many principals never look at these numbers.

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