THINKING BUSINESS
a blog by Chris Barrow

The sweet spot

I keep on harping on about “operating costs per surgery per day” (OCPSPD) as being possibly THE most important number in private dentistry. Total running costs Less lab. Less materials. Less clinician’s fees. Which means we are looking at the costs of running your business, even if no patients or clinicians show up. Then – dividing that cost by the number of surgery days available in the year. My client and friend Colin Campbell has written about this in his own excellent blog. CLICK HERE Colin’s “sweet spot” here is between £500 and £750 per day. I’m going to suggest that figure is higher than average because he owns a specialist referral clinic in West Bridgford. In the case of an owner-managed private practice with a good mix of cosmetic and high-end work delivered by the Principal – I’m going to move the “sweet spot” down to the £500 per day mark. The importance of staying close to the “sweet spot” cannot be over-emphasised. In the last few weeks I’ve been involved in conversations about business development that include:

  1. I’m building a second practice down the road

  2. I want to convert a derelict barn

  3. I want to expand and add 3 further surgeries

In each case, NO ESTIMATE HAS BEEN MADE OF THE LIKELY OCPSPD AFTER THE PROJECT IS COMPLETED. Everyone gets very excited about the vision, the architectural plans, the layout of facilities, the equipment, the decorations and the business plan. Nobody can answer a simple question: “after you cut the ribbon – what will the revised OCPSPD be?” So I become the miserable so-and-so who asks and, as we say up North, “pisses on everybody’s chips”. I’m quietly proud of the conversation with one ambitious client who, after I pointed out that the revised OCPSPD for his “Temple to My Magnificence” would be close to £1,000, tore up the plans. You know all those “shag pile and chandelier” practices that have closed down in the last few years? Well now you know why. Find your “sweet spot” and make sure you don’t wander far away – or your lovely little practice will become a financial carnivore with an appetite for YOU.

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