KPI’s – key performance indicators – are the magic numbers that can tell both you and an outsider exacly what’s going on in your business.My favourite KPI’s for dentistry have always been (as a percentage of total sales):
- Lab bills (10% for GDP’s and 14% for funky dentists)
- Material costs (7% for everyone)
- Staff costs (17.5% normally, rising to 22% of you salary your hygienists)
- Profit before tax (between 25% and 40%, depending on number of dentists in the building)
That’s kept me going for some years now – then along comes Simon Hocken as my business partner – and I discover that he has a different set of criteria:
- ADY (average daily yield per dentist) – aim for Â£1000 for an associate GDP and Â£1500 for a principal GDP
- Net profit per month – duh
- Daily bank balance and rolling average balance (is the trend up or down)
- Active patient list size per full-time dentist (only needs to be 1000 if you do what’s right)
- New patient numbers per month (<10, 15-20 or +20?)
Add the two sets of KPI’s together – and you can analyse and coach a client very quickly indeed.
Sad truth is, many principals never look at these numbers.