Six goals of high-performance practices

April 1, 2013
As a small business, a dental practice can improve day-to-day performance and stimulate growth, even during the current economic downturn, by using the proven technique of goal setting.

by Roger P. Levin, DDS


As a small business, a dental practice can improve day-to-day performance and stimulate growth, even during the current economic downturn, by using the proven technique of goal setting. Goals are broad, long-term (three-year) targets calculated to drive the practice toward the dentist's vision of success. More than simply marks of achievement, goals serve as true motivators for the doctor and staff when they are used regularly to gauge the practice's progress.

Working with thousands of dental practices, Levin Group has found that goal setting is particularly valuable for focusing dentists -- who typically have little or no business training -- on the performance factors that make the difference between an average and exceptional practice.

Once the technique of goal setting has been mastered, each practice will have a unique set of goals based on the dentist's vision. When initially laying the foundation for future success, all practices will benefit from these six fundamental goals:

1. Continually increase production. Practices have flat years and even some down years, especially in the slow economy we have now. The goal is to maintain a trend of ongoing production increases. In the past this was common, but times have changed. Much more effort is required for success today than simply opening the door and waiting for patients to arrive. The dentist has no choice but to become an outstanding business executive.

If a practice is not seeing production increases of at least 15% per year, it needs to make improvements. Dental practices should not be allowed to flatline. In recent years, many practices have hit plateaus and slipped into decline. A practice that is not continually increasing production is already in a state of decline and should replace its management and marketing systems as quickly as possible.

2. Continually grow profitability. At one of my recent seminars, a dentist said he was proud of the fact that his overhead number was 20% less than the target I had discussed in the seminar. When I asked for more information, he admitted that his production numbers were not good, about half the average that we see for practices. This illustrates the point that if overhead is too low, it chokes practice growth. Growing a practice effectively requires an adequate investment in overhead. In this example, the dentist was spending hours each night in the office writing up charts, and even spending time overseeing many of the credit card inputs.

Since they have invested so heavily in their education and practice, dentists should approach every spending decision with an eye on how it will affect profit. Some practices with high production also have overhead that is too high. Too much overhead leads to reduced profit margins. For example, one dentist who recently became a client was producing $1.3 million annually, but with 89% overhead, which left a very unimpressive profit margin. Many dentists would be pleased to have a practice with $1.3 million annual production, but only appropriate overhead numbers will make the practice profitable and the dentist happy.

On the other hand, there must be production for profit to increase, and there must be adequate overhead to facilitate that production. Smart expenditures on overhead, such as investing 3% to 6% of your revenue each year for internal marketing, can lead to a huge return on investment.

3. Continually generate more referrals. New patients are vital for any practice. To maintain a steady flow of referrals from patients, practices must create an ongoing marketing program that consists of multiple strategies designed to generate patient referrals. Such a program is far less expensive than typical external marketing activities, including direct mail and advertising. What's more, internal marketing is more effective than external marketing so the return on investment is far better.

For a general practice using internal marketing, the goal is to see a 30% increase in patient referrals annually. An internal marketing program -- eliciting referrals from existing patients -- should try to motivate 40% to 60% of patients to make at least one new patient referral per year. A practice can double its patient base in two years by achieving this target.

Patient referrals are so important to the health of the practice that dentists should hire a part-time internal marketing coordinator (IMC) to handle the numerous details of creating and implementing multiple marketing strategies.

4. Maintain a low-stress environment. In the Dental Economics/Levin Group 2012 Annual Practice Survey, more than one third of the responding dentists -- 35.2% -- said they are experiencing high or extremely high stress. People under too much stress suffer physically, emotionally, mentally, and spiritually, which accounts for why there are more exhausted dentists each year. This is especially a concern for female dentists, who often work two jobs, one as a dentist and the other as a mother.

Few dentists understand the true cause of their stress. Stress typically does not come from patients or staff. It is a side effect of inefficient business systems. Every business needs to grow, but that growth should not be achieved through the doctor and staff working 12 to 16 hour days. Strong growth with less stress comes from excellent systems and scripting that make effective performance simple and repeatable.

Every dentist should rate their stress level on a scale of 1 (no stress) to 10 (totally stressed out). If the answer is 3 or higher, their practice systems are inefficient -- either obsolete or incomplete. Great systems create great customer service and better practices, while also reducing stress, which leads to a better life.

5. Seek high professional satisfaction and an enjoyable practice environment. Many people do not like their jobs and only work for the paycheck. To be a good leader, the dentist must create a purpose for the practice. Staff members cannot be expected to work every day merely to make money for the doctor. They need a sense of purpose to make their work meaningful, and the dentist is the one who should define that purpose.

Professional satisfaction comes from having a purpose and working toward achieving it. For example, if the purpose of a practice is to help patients have a perfect smile, it should consider focusing on cosmetic dentistry. This could provide the spark that enables everyone to value and enjoy their work.

6. Gain financial independence. Nothing is sadder than dentists who dedicate their entire careers to helping others by performing high-quality dentistry, then have to postpone retirement due to lack of funds. A passion for dentistry should not mean having to run a practice indefinitely. To enjoy their retirement years, dentists must have a long-term plan that will build financial security for the future.

The later a dentist begins to plan for financial independence, the harder it is to achieve. Accumulating wealth is more challenging today than ever, and the market value of dental practices, regarded by many dentists as the financial key to their retirement, is currently lower than many had hoped. Whatever stage a dentist's career is in, it is not too early to start improving practice profitability and personal financial planning.


Now that the Great Recession and its consequences have changed dentistry forever, practice success is no longer automatic. Today's dentists must take a businesslike approach to building their practices and generating enough income to meet immediate and long-term financial needs. Practices will not reach full practice potential until they implement new systems, but goal setting can get the growth process started. The six goals discussed here, if reviewed regularly by the doctor and team, will begin the process of creating a high-performance practice.

To learn how to run a more profitable, efficient, and satisfying practice, visit the Levin Group Resource Center at, a free online resource with tips, videos, and other valuable information. You can also connect with Levin Group on Facebook and Twitter (@Levin_Group) to learn strategies and share ideas.

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