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Practice Matters DENTAL TRIBUNE | June 20106A from the beginning. Do not con- vince yourself that because they’ve worked in this dental practice for X number of years, they know how you want things done. They don’t, and they will simply keep performing their responsibil- ities according to what they think you want unless they are directed otherwise. Recognize the strengths and weaknesses among your team members. All employees bring both to their positions. The fact is that some people are much bet- ter suited for certain responsibili- ties and not others. Just because “Rebecca” has been handling insurance and collections for the practice doesn’t mean she’s effec- tive in those areas. Look at results. Rebecca may be much more successful at scheduling and recall and would be a much more valu- able employee if she were assigned those duties. Don’t be afraid to restructure responsibilities to make the most of team strengths. In addition, be open to maximizing those strengths through profes- sional training. Give ongoing direction, guid- ance and feedback to your team so that they know where they stand. Don’t be stingy. Give praise often and appraise performance regu- larly. Verbal feedback can be given at any time, but it is most effective at the very moment the employee is engaging in the behavior that you either want to praise or cor- rect. Nip problems in the bud and you’ll avoid numerous thorns in your side. If an employee is not fulfilling her/his responsibilities, address the issue privately and directly with her/him. Be prepared to discuss the key points of the problem as you see it as well as possible resolutions. Use performance reviews to motivate and encourage your team to thrive in their positions. Base your performance measurements on individual jobs. Focus on spe- cific job-related goals and how those relate to improving the total practice. Used effectively, employee performance measurements and reviews offer critical information that is essential in your efforts to make major decisions regarding patients, financial concerns, man- agement systems, productivity and staff in your new practice. Lesson No. 3: Keep your hands in the business Certainly, it doesn’t take long to recognize that there are many hats for the dentist to wear. The hat that says “The CEO” is just as important as the hat that says “The Dentist.” It is critical that you completely understand the busi- ness side of your practice. There are 22 practice systems and you should be well-versed in each of them. If not, seek out training for new dentists. The effectiveness of the practice sys- tems will directly, and profoundly, affect your own success today and throughout your entire career. For starters, routinely moni- tor practice overhead. It should breakdown according to the fol- lowing benchmarks to ensure that it is within the industry standard of 55 percent of collections: • Dental supplies: 5 percent • Office supplies: 2 percent • Rent: 5 percent • Laboratory: 10 percent • Payroll: 20 percent • Payroll taxes and benefits: 3 percent • Miscellaneous: 10 percent Keep a particularly close eye on staff salaries. Payroll should be between 20 and 22 percent of gross income. Tack on an addi- tional 3 to 5 percent for payroll taxes and benefits. If your payroll costs are higher than that, they are hammering your profits. Here’s what may be happening: • You have too many employees. • You are giving raises based on longevity rather than productivity/ performance. • The hygiene department is not meeting the industry standard for production, which is 33 percent of total practice production. • The recall system, if there is one, is not structured to ensure that the hygiene schedule is full and appointments are kept. Maximizing productivity. Hand- in-hand with practice overhead is production, and one area that directly affects your production is your schedule. Oftentimes, new dentists simply want to be busy, but it’s more important to be pro- ductive. Follow these steps to maximize productivity. First, establish a goal. Let’s say yours is to break $700,000 in clini- cal production. This calculates to $14,583 per week, not including four weeks for vacation. Working 40 hours per week means you’ll need to produce about $364 per hour. If you want to work fewer hours, obviously per-hour produc- tion will need to be higher. A crown charged out at $900, which takes two appointments for a total of two hours, exceeds the per hour production goal by $86. This excess can be applied to any shortfall caused by smaller ticket procedures. Use the steps below to determine the rate of hourly production in your practice. The assistant logs the amount of time it takes to perform specific procedures. If the procedure takes the dentist three appointments, she should record the time needed for all three appointments. Record the total fee for the pro- cedure. Determine the procedure value per hourly goal. To do this, take the cost of the procedure (for example, $900) divide it by the total time to perform the proce- dure ($900 ÷ 120 minutes). That will give you your production per minute value (= $7.50). Multiply that by 60 minutes ($7.50 x 70 = $450). Compare that amount to the dentist’s hourly production goal. It must equal or exceed the identi- fied goal. Now you can identify tasks that can be delegated and opportuni- ties for training that will maximize the assistant’s functions. You also should be able to see more clearly how set up and tasks can be made more efficient. A career in dentistry is one of the most personally and profes- sionally fulfilling fields you can choose. With the right team, clear leadership and effective business systems, you can enjoy tremen- dous personal success and lifelong financial security for you and your family. DT f DT page 4A AD About the author Sally McKenzie is CEO of McKenzie Management, which provides success-proven man- agement solutions to dental prac- titioners nationwide. She is also editor of The Dentist’s Network Newsletter at www.thedentists network.net; the e-Management Newsletter from www.mckenzie mgmt.com; and The New Den- tist™ magazine, www.thenew dentist.net. She can be reached at (877) 777-6151 or sallymck @mckenziemgmt.com. ‘Give ongoing direction, guidance and feedback to your team so they know where they stand.’