How to Spot and Fix Profitability Leaks in Your Dental Practice

A patient shares a lighthearted moment with the dentist during a check-up in a modern dental clinic.

Executive Summary

Profitability is the backbone of any successful dental practice. Yet, inefficiencies and missed opportunities often slip under the radar, quietly cutting into your revenue. This article highlights the most common areas where practices lose money and provides clear, actionable strategies to address these leaks—whether it’s improving treatment conversions, managing overhead costs, or increasing staff productivity.

Introduction

Managing a dental practice goes beyond delivering exceptional care. It’s about running a business that’s efficient, scalable, and profitable. Without strong systems and regular attention to the finer details, hidden issues can drain your revenue. The good news? Small, targeted changes can lead to big results. Let’s break down the most common areas where money is left on the table and how to fix them.

Key Areas to Address

1. Treatment Conversions

If your practice struggles to turn patient interest into treatment, you’re leaving significant revenue untapped. Patients often hesitate because of confusion, cost concerns, or lack of follow-up.

Action Plan:

• Review your treatment conversion rates in your practice management software.

• Assign a treatment coordinator to follow up with patients, clarify treatment plans in simple terms, and address concerns like cost.

• Example: Boosting a conversion rate from 50% to 75% for a $2,000 treatment plan across 40 weeks can generate $120,000 in additional annual revenue.

2. Staff Productivity

Your team’s efficiency directly impacts your bottom line. Tracking productivity through metrics like the Effective Hourly Rate (EHR) gives a clear picture of where improvements are needed.

Action Plan:

• Use AI tools like Co-Treat to identify missed opportunities for treatment.

• Standardise patient communication to avoid misunderstandings.

• Reward high-performing team members monthly to boost motivation.

3. Overhead Costs

Unchecked expenses—whether from wages, labs, or supplies—can eat into profits. Staying within industry benchmarks ensures financial stability.

Action Plan:

• Monitor monthly expenses:

  • Personnel: 20-25% of revenue

  • Lab costs: No more than 10-12% (maybe more in aligner practices)

  • Supplies: 5-7%

• Schedule monthly meetings to review supplier contracts and identify cost-saving opportunities.

4. Visualising Profitability Metrics

Keeping a close eye on metrics can give you valuable insights into your practice’s financial health. Use a monthly profitability checklist:

• Compare sales to budget.

• Track gross and net profit margins.

• Monitor treatment conversion rates and patient retention.

• Review the biggest wins and obstacles each month to inform your next steps.

The Importance of Systemisation

Lack of consistent systems can lead to missed opportunities and patient dissatisfaction. Systemisation is key to running a predictable, profitable practice.

Action Plan:

• Implement a system for:

  • New patient phone calls: Build rapport and clearly outline next steps.

  • Follow-ups: Track declined treatments and revisit them later.

• Use tools like Loom or checklists to document workflows. Regularly test and refine these processes to improve results.

Conclusion

Small, intentional changes can lead to big financial gains. Start by tackling one area, monitor your progress, and keep building from there. Profitability isn’t about major overhauls—it’s about taking consistent, manageable steps toward better results.

How Aligned Business Consulting Can Help

At Aligned Business Consulting, we help dental and specialist practice owners implement efficient systems that drive profitability, enhance patient experience, and reduce daily stress.

With over 25 years of industry experience, we provide actionable strategies to help your practice thrive in today’s competitive landscape. 

Need expert guidance on your results? Book a complimentary 30-minute virtual coffee chat here to discuss the next steps.

📩 For enquiries, email us at: michelle@alignedbusinessconsulting.com.au

To learn more about how I can help your dental practice, visit my services.

go to Services

To learn more about how I can help your dental practice, visit our Services Page.

This is a personal blog. Any views or opinions represented in this blog are personal and belong solely to the blog owner and do not represent those of people, institutions or organisations that the owner may or may not be associated with in a professional or personal capacity unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club organisation, company, or individual.