A regular and predictable income is the holy grail for any business and that’s no different for dental practices. Nigel Jones discussed how a dental practice can generate an income, even when they are forced to close or the dentist is away on holiday.
Due to the recent exceptional weather circumstances, many practices have experienced closures and appointment cancellations. I am sure that the majority of dentists did their very best to keep services going in such extreme weather, but through no fault of their own, many are now facing clawback or loss of income amid patient cancellations.
The BDA has called on NHS England and the Welsh Government to invoke force majeure on their GDS contracts, but if this is unacknowledged, due to the proximity of the extreme weather to the contract year end, there was limited time for providers to make up their UDAs, which must have been concerning.
If you are the owner of a small dental practice, facing an unexpected closure or even planning to take time off to go on holiday can be a painful financial blow. This is a perennial problem for practioner-based businesses such as dental practices where income generation is, for the large part, dependent on chargeable time spent with the patient.
“you can’t sell your services while you’re asleep”
The problem with a service-based industry such as dentistry is that you can’t sell your services while you’re asleep or when you take time off, unlike a product-led, commodity business where orders can come in at any time of the month or year.
So, what could you do to generate income…even when you’re not working?
Introducing a patient membership plan into your practice is one potential answer. A membership plan provides your patients with the ability to spread the cost of their maintenance dental treatment across the year through monthly Direct Debit payments. This means that you can flatten out the financial peaks and troughs in your practice and create a consistent and reliable income, even when you’re away or the practice is closed.
“It’s a well-known fact that most businesses that go under don’t do so because of a lack of work but from a lack of cash flow to keep their businesses operating.”
Dealing with a ‘self-imposed’ dip in income can be particularly problematic for smaller, one and two chair practices where there is not the level of staff resource to cover for the times when the principal is away or perhaps over Christmas and the New Year. A poor month in terms of income generation can result in cash-flow problems further down the line, leading to increased pressure, stress and worry. It’s a well-known fact that most businesses that go under don’t do so because of a lack of work but from a lack of cash flow to keep their businesses operating.
All of this can be mitigated by the introduction of a membership plan. The plan provides a clear win/win for patients and practices alike. Patients benefit from regular preventative appointments, the ability to spread the cost of their treatment and can offer additional incentives such as discounts on additional treatments. Practices benefit not only from a predictable income, but also from increased patient loyalty, a reduction in non-attendees and an increase in treatment uptake.
Of course, it could be argued that the plan merely spreads the pain of those non-earning weeks across the year, making some kind of loan facility for the dentist. However, this is a misconception. Calculating your monthly membership fees should take into account the owner’s full salary (including paid holidays) as well as other factors such as covering the practice overhead costs, clinical hours, length of procedures and future investments.
Introducing a plan into your practice is a simple process and, because there are multiple benefits for your patients’, there’s no hard sell involved. It’s simply a matter of getting your team on board with the principle, training them to clearly communicate the benefits to your patients and introducing a simple process to sign those patients up to the plan.
A patient membership plan provider, such as Practice Plan, will have experts on hand to help you assess the viability of a plan for your practice and, if it’s right for you, proven processes and systems in place to get your plan and team up and running quickly and effectively.
“A patient membership plan is a simple and effective way of helping you to achieve a regular and predictable income.”
A patient membership plan is a simple and effective way of helping you to achieve a regular and predictable income. So, if you’d like to relax worry-free when extreme weather hits or whilst on your next holiday, start thinking about introducing and building a plan in your practice. And if you’d like a free consultation to explore your options, the team at Practice Plan are here to help you explore your options.