NOW UPDATED FOR 2006!
The most recent benchmarking data for Dentists is now available, both in print and in downloadable PDF format, with your purchase of the Dentists Business Benchmarking Guide. (NOTE: 2006 updates not yet available in online HTML subscription version of this guide - please call MAUS Sales Centre on 1 300 300 586 for further info.)
This Small Business Profile presents the results of a survey of Dental practices for the financial years up to June 30, 2004. The survey was based on 32 practices.
Successful dental practices are all about patient care, high quality, contemporary service, regular patient contact and good interpersonal relations between dentist and patient.
With these aspects in place, business management skills come to the fore. Productivity is a key area. Optimising the consults per professional will increase productive (or fee-earning) time and reduce the non-chargeable time. More revenue per dentist will flow automatically. Dentists need to be supported effectively by dental nurses or technicians etc., and also need breaks during the day to balance their workload.
Costs per person tend to rise in the more profitable firms, but nowhere near as much as revenue per person - that leads directly to more total profit. When that formula works well, profits per principal will rise.
These are the results of a survey of dentists. These results should not be considered to be representative of all dentists in Australia. However, they will allow principals to identify strengths and weaknesses in the ability of their practice to generate revenue, control expenses and earn sufficient profits. This is done by identifying these elements of practice performance and comparing them with benchmark performance levels currently being achieved by the sample of practices in this survey.
All of the dentists in our survey were from the eastern states of Australia. Queensland was the most heavily represented area, while there were no firms located in Tasmania or the Northern Territory in our sample.
Practices from metropolitan areas represented around 67% of the entire group. The remaining 33% of practices were divided between larger regional cities and towns (population over 20,000) and rural areas (population under 20,000).
Around 90% of practices rented their premises and approximately 67% of those businesses which rented were located in premises with street frontage.
The following table will give you a snapshot of the variance in results found in your industry for various Key Performance Indicators (KPIs). Each KPI (shown in rows) should be considered independently of each other. For example, a business with a high percentage gross profit would not normally also have a high relative percentage of their income spent on wages.
For each KPI, the table shows the average, high and low results found in the business surveyed. The KPIs should not be 'added together' under the high and low columns as they do not necessarily relate to the same business.
The KPIs show the 5th highest and 5th lowest actual result for each performance indicator. The range of values shown therefore covers the middle 80% of reported results.
|Total Income||$643,999||$256,899||$1.32 mil|
|Wages and Salaries (staff only, not owners)||28.00%||16.34%||43.33%|
|Rent of Premises #||5.50%||2.39%||9.69%|
|Interest, Bank Charges||2.14%||0.69%||4.26%|
|Other Depreciation, Lease and Hire Purchase||4.14%||1.10%||7.95%|
|Staff on Costs||2.53%||1.15%||3.76%|
|Net Profit (bps*)||28.00%||19.69%||47.91%|
|Support Staff per Dentist||2.27||1.50||3.00|
|Fees Rendered to Account||25.00%||7.00%||55.00%|
|Average Consult Length (minutes)||33||25||45|
|Average Number of Consults per Dentist per
|Opening Hours per Day||9||8||10|
# calculation uses
only the firms in rented premises *(bps) before principals' salaries
So, how does your firm 'stack up' against these averages? These results will give you an idea of where your practice falls in relation to the sample and give you a better understanding of your relative strengths and weaknesses.
The remaining expense items each represented less than 2% of total income on average; however some practices reported some larger results for such items as:
- All Insurance Costs of up to 3.89%;
- Other Occupancy Costs of up to 1.84%;
- Professional Development Costs of up to 7.51%;
- Repairs, Maintenance, Hire of Plant & Equipment of up to 5.11%;
- Vehicle Operating Costs of up to 4.33%;
- All Other Expenses of up to 4.99%.
To summarise this, larger practices had:
- Higher profit per principal
- More employees per principal, where each employee delivered more revenue to the practice
- Lower non-salary overheads in total.
The more profitable practices:
- Were larger
- Had lower non-salary overhead costs and higher net profit margins
- Had fewer support staff per Dentist, and achieved much higher overall personnel productivity
- Conducted more consults during a typical working week
- Funded a higher percentage of a larger asset base with their own money.