In this transcript from a video by Steven J Wick & Associates PC in Fort Collins, we explore dental practice cost centers and profit centers. This video provides insights for dental practitioners who are starting their own practice and want to better understand how to track profits across different segments of their business. The discussion covers practice setup, staffing, cost tracking, insurance considerations, and identifying the most profitable areas of your practice.
To learn more about how to accurately manage your dental finances and optimize revenue, check out our detailed article on how to track dental practice profits in Fort Collins.
Please note, this video does not constitute legal or financial advice, and we recommend contacting a CPA for guidance on your specific case.
Transcript
00:00:00 – Introduction: Starting Your Dental Practice
People don’t understand they just figure they’re making money but they don’t understand where their segments [Music] are. This is you, a dentist wanting to start your own practice; however, you’re not sure where to begin. You may need to plan out your setup. Usually, when I’m working with dentists, it could be one dentist and two or three demo hygienists, maybe a receptionist, up to you know six or eight dentists that are employees of the practice. So usually there’s—well, could be one owner or several owners and
00:00:47 – Identifying Your Setup and Accounting
They’re sharing things depending upon their agreement. Before starting your dental practice, you must first identify your setup. Your accounting methods and financial management will be entirely based on your dental practice agreement, including costs related to dental practitioners, staff, and other overhead expenses. Once you’ve determined your setup, you’ll gain insight into startup costs, fees, insurance acceptance, deciding which insurance to partner with, and assessing its impact on your income
00:01:18 – Understanding Practice Segments and Costs
And the subsequent steps toward establishing your own practice. The biggest thing I really wanted to talk about is making sure that the practice understands their costs and also the segments of their practice. This could be like hygienist—what are the fees that are being built through that part of the practice? And also the hygienist labor. Or it could be, you know, each doctor or associates, and how much they’re earning the practice and how much you’re paying them out, because those are really big pieces of
00:02:07 – Identifying Revenue Streams and Profitability
Understanding the business. So I’ve seen it often, we just put it that way—people don’t understand, they just figure they’re making money but they don’t understand where their segments are. You have to really look at the model and where you’re at and understand where are you making your money. And is it, you know, if you’re doing fillings or root canals, or you farm that out to somebody else, or dentures, or whatever else that you do, crowns—what are you making and how much time
00:02:46 – Cost Centers and Profit Centers
And is that part of the model? And, you know, as with almost every business, there are more profitable areas than other areas. So maybe like a cleaning is a gateway into some of the other things that you do. So maybe you’re only making a small percentage, or a smaller percentage, on your dental cleanings, but that sets up the fillings and crowns and whatever else you have that you’re doing. And that segues into the x-rays and all of those things—those are cost centers potentially and profit centers. And so looking at those and tracking those, I like to use some industry standards to try and compare where you’re at—are you in line with your peers or the industry—and making sure that you’re kind of on track.
00:03:29 – Insurance and Administrative Considerations
The insurance piece—I know I’ve worked with several people and looking at all of the administrative paperwork and whatnot you have to send off to the insurance company and potentially to Medicare—what does that all cost you? You got to factor all of that in too to see if you are really making money doing this.
00:04:07 – Key Takeaways for Financial Success
That’s one of the biggest things that I’ve been able to help people with. In a nutshell, starting your own dental practice requires careful planning and understanding of various factors. You must identify your setup, including practice structure, staffing, and ownership. Once clear, focus on startup costs, fees, insurance, and other necessary steps. Understand your practice’s segments such as hygienists and practitioners, and
00:04:40 – Tracking Costs, Profits, and Leveraging Professional Guidance
Track costs and profits diligently. Leverage industry standards and professional guidance for confidence. These factors can contribute to your overall financial success. If you’re unsure, meeting with a CPA who knows the dental world is your best bet to ensure you are actually making a profit [Music]. Are you a dental practitioner starting a dental business and in need of CPA services? Explore our core services on our website at SJ Wick CPA.com or give us a call at 972-24-3366. Whether you’re seeking increased
00:05:18 – Supporting Success: CPA Services
Profits, payroll assistance, or tax relief, we’re fully committed to your success [Music].
Conclusion: Dental Practice Cost Centers and Profit Centers
Understanding dental practice cost centers and profit centers is essential for the financial success of your dental practice. By tracking costs, evaluating revenue streams, and leveraging professional CPA guidance, you can identify which areas are most profitable and ensure your practice is sustainable and successful.
