Don't rely on statistics as a guide when planning a dental office
This article was inspired by a recent conversation that I had with Linda Miles of Linda Miles & Associates, during which she shared one of her pearls of practice management wisdom. Her client was steadfast in his intent to constrain his overhead to align with the statistical 50% average. In her characteristically direct and succinct manner, Linda posed the query [paraphrased], “Would you rather retain 50% of a $500,000 practice or 40% of a $1,000,000 practice?” The bottom line is that it’s not how much you spend. It’s how much you make. That postulate is grounded on proven business principles, not statistics.
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Consider for a moment that department store chains clamor for space in a mall despite the inordinately high lease rates and CAM charges. In some cases they must also pay a percentage of their gross receipts back to the mall. But, as long as their “bottom line” continues to grow, they simply consider the associated expenses as the cost of doing business. The same holds true when planning a dental office. That’s not to say that you should spend recklessly. But keep in mind that “underspending” can ultimately be more costly than “overspending.” All investment decisions must be predicated on an expected Return On Investment (ROI). To that end, you must establish and adhere to a budget. But each line item needs to be weighed individually to determine their respective value.
For example, we designed an office for an 11-chair prosthetics practice. Their lab space was four times that of most statistical averages, and was equipped comparatively to that of any commercial lab. Ten years later, the practice is thriving and the space and equipment continue to serve the needs of the practice. The additional upfront expense has long-since been amortized and the associated day-to-day costs remain negligible.
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On a less costly and more subtle level, space was allocated in the very center of the suite of that practice for a future panoramic X-ray. This “prime real estate” sat “wastefully” idle in the center of the suite for over four years. Currently, their state-of-the-art, digital panorex is positioned for optimal function and flow — both of which serve to reduce overhead and enhance revenue.
So, study the statistics, and, if possible, research the results. It is likely that you will discover that to follow the words of the of soothsayers will only serve to limit your potential. In the words of Albert Einstein, the definition of insanity is, “Doing the same thing over and over again and expecting different results.” Don’t become a statistic.
Garrett Ludwig founded Diversified Design Technologies Inc. in 1971. The company has specialized in the design and construction of private-practice, health-care facilities since 1975. During that time, he has designed more than 300,000 square feet of professional office space. He has a U.S. patent on his emergency services “crash cart” design. Ludwig has shared his experience in dental office design in numerous trade publications, and continues to lecture on the subject. He can be reached at (800) 622-5563 and [email protected]. Visit his Web site at www.profitbydesign.us.
