615: 1 Game-Changing Way to Save Your Practice Money! - Miranda Beeson

1 Game-Changing Way to Save Your Practice Money!

Episode #615 with Miranda Beeson

Anyone who works in the dental world has felt the pain of rising costs—though we work harder and harder, we have to keep pinching pennies more and more. To help solve this problem, Kirk Behrendt brings back the Solutionist, herself: Miranda Beeson. Your money doesn’t have to be working against you, so learn how to get your supply budget under control and your money working for you by listening to Episode #615 of The Best Practices Show!

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Links Mentioned in This Episode:

Episode #575 of the Best Practices Show: “How to Calculate Your Overhead in 60 Seconds,” with Dr. Barrett Straub

Main Takeaways:

Costs are on the rise, so you need to get your money under control.

If you don’t tell your money how to work for you, it will work against you.

Inventory what you have.

Set a supply budget.

Track what you spend.

Make sure there’s accountability.

Work with your rep to get a price comparison on your top supplies.

Evaluate and re-evaluate your ordering system often.

Quotes:

“Anyone who's listening, who works in the dental world and practice owner, you have felt that pain over the last couple of years. We're pinching our pennies harder and harder as time goes on and if we aren't moving forward and keeping up with those trends, then we're ultimately moving backwards. So we want to make sure that we're doing things within the practice to keep up with those changes and the costs going up within just society in general with our economy. If you don't tell your money how to work for you, then it's going to take over. It's going to control you. And at the end of the month you're sitting there going, ‘Oh man, I feel like I worked so hard and I thought we would have more in the bank than this.’ And so if we can get control of that and tell our money how to work for us in the practice, then we're going to be happier in the end and we're going to feel a little less stressed and maybe even take some more vacations throughout the year and reward our team a little bit more.” (03:04—03:54)

“If you have a plan for your money and you're telling it how to work for you, you're going to end up better in the end; you're going to have a little extra in your pocket at the end of the day or at the end of the month. You have to make sure that you're in charge—don't let your money control you.” (04:41—04:56)

“One of the gaps is our overhead gap. And how can we shrink that gap to help save the practice money and become more profitable? And one of the pieces of that overhead gap—and it's a piece that we can share with our team because they contribute to this—is our supply budget. And our supply budget should be around that 5% mark of our overall budget. And so if you're consistently at 7 or 8%, it doesn't seem like it's that much more, but when you look at 7 or 8% of $1,000,000 or multimillion dollar practice, like that's a lot of money throughout the year. So that's where those small changes really come in to making big impacts.” (05:46—06:26)

“So when we're looking at our supply budget, the first thing that I have teams do is inventory what you already have. So go through every single operator and do some spring cleaning. Usually there's things tucked away. There's an assistant who is like, ‘Man, my doctor uses this so often, I'm going to keep a couple extra in here so that I don't have to hunt down or fight Suzy for it.’ So first things first, inventory your operatories; do a good clean sweep and get everything standardized. Not only is that going to help you to find materials that you may have in the practice that you don't realize you have—maybe you think you're out of. It's also going to help you standardize and make your flow more efficient when your rooms are now clean and set up and functioning just like one another throughout the practice. But the big factor is you're going to find a lot of gems when you go through and clean out your operatories.” (06:26—07:19)

“A lot of offices will just have a list. That's kind of their ordering system. They have a list, a clipboard or dry erase board or something in a general space. And when someone realizes, ‘Oh, we're out of this,’ they write it on the list, and then that's how they decide what gets ordered. But are we really out of that? We might have seven of that object, that item spread throughout our operatories, and we just don't know because we're keeping this back stock or we're hoarding things.” (09:08—09:34)

“What I really love, as well, that I've had the opportunity of using when I was in practice was a barcode scanner ordering system where you can have the item barcode right there in front on the shelf in front of whatever it is, and you just have a little scanner. And when you see you've hit that threshold of two or whatever you decide that it is, all you have to do is grab it, scan it, and now whoever's doing your ordering, when they go in to order from their supplier, it's already uploaded right off of that scanner and everything's there and it'll highlight duplicates for you and help do some of that work. So we want to work smarter, not harder for sure. We don't want to make this a bigger job for someone than it needs to be. We want to make it an easier job for somebody and a more efficient process in the practice.” (12:33—13:17)

“So really you want to look at your previous month’s collections . . . if you're looking at the month that just happened, then you want for last month's supply budget to be within 5% of your overall spend. However, you don't know what your collections are going to be for this month. So how do I predict 5% of this month? Well, we're going to base it off of last month because that's the most predictable, closest way we're going to get to knowing. So we'll look at last month's collections and that's going to guide our budget. So we're going to take whatever we collected last month. 5% of that will be our max budget for this month when we're placing orders. And so now whoever's responsible for your ordering, or if it's you as the practice owner, you know, ‘I have this much money, $12,000, whatever it may be, to work with this month. And when I hit that limit, I'm done spending.’ That's the key, right? It's not just setting the budget, but stop when you hit that budget. You want to make sure that you align with your team around this and that they know. If you're not the person doing the ordering, you have to share with the person who's doing the ordering what that budget is and why, so that they know and can be responsible to stay within the expectations of that budget.” (14:13—15:30)

“If you don't have a budget set up within your practice, it may just be that, you know, maybe you don't know what the budget should be; what is our profession's industry standard for what the budget should be around that?” (16:10—16:24)

“If you set the budget, that's great. But how do we know if we're staying within that budget? And there's a lot of ways that you can do this as well. And it's really pretty simple. So one of the tools that we use is a supply budget tracker where we look at collections from last month. Okay, what's 5% of that? That's going to go right at the top of our supply budget. And now we know we're working down from there. Everything that we order throughout the month, we need to track and determine how much we have left to spend next.” (18:32—19:09)

“You want to double check [your invoices] just like you would if you go out to a restaurant and you just do an eye test, you do a glance over, ‘Did I buy extra beer? No. Okay, good. I'm going to go and take care of this.’ Let's just look at your invoices, make sure you're on track, but then look at where you are compared to your budget for the month. And have you hit that budget?” (19:21—19:39)

“Every supply ordering system that you develop should have a little contingency plan at the end. A Plan B, ‘When we hit max, what do we do?’ And maybe it's, ‘Okay. I go to my office manager or I go to the practice owner and we talk about we've hit budget, but we are going to run out of gloves before the next month.’ Great. Now they may stamp approval for you, but they're going to be intentional about that decision. You're going to think it through instead of just swiping the card and getting more.” (20:05—20:33)

“There are things within the practice that you could probably get a generic version of or another brand of, or maybe something’s on sale this month. So there's also that mindset around exploring new things and having an open mind to trying something new. So when you're tracking what you're spending, part of what you should be tracking is looking at how much these things cost. Look at each item at some point, maybe not every time, every month, but looking at ‘What am I really spending? Oh my goodness, prophy paste is how much? I bet I can find a comparable that saves me half the amount of money.’ And I bet you can too, because I've seen it happen. I've seen teams do it.” (22:42—23:23)

“[When ordering from supply chains] you can set parameters within their software. So if you're a practice owner and you have an assistant who's responsible for ordering, you can set a max that alerts you. ‘Once we've spent this much each month, send me an email so I know we're close to budget.’ So now as the practice owner, I don't have to worry about ordering. I have delegated that to someone else that I trust. However, if we're getting close to budget or if we hit budget, I can get alerts in my email and now I know I need to work a lot tighter with my ordering coordinator until the end of the month to make sure we're staying on track for that target.” (23:47—24:23)

“But if you don't try new things and experiment, then you might [not] find something that you really, really do like—you like it even better. And guess what? You saved the practice some money on that new product as well.” (27:48—27:59)

“Work with your rep, let them know, you know, you can request, ‘Hey, here's what I'd like to do. I'd like to have a list of the top products that we ordered last year, maybe the top 25, top 30 products that we ordered last year. And I'd really like to do some cost comparison,’ and have them help you with that. They can do that for you, and they will do that for you.” (28:25—28:44)

“Evaluate and reevaluate your ordering system. Hold yourself accountable. Hold your team accountable to the budget and revisit that over and over again. You're going to want to revisit it month by month by month, and then check in with your team quarterly.” (29:24—29:40)

“You always want to know where you're at—have meetings monthly or quarterly with your ordering coordinator to make sure you're in alignment and then just keep the whole team communicated with throughout the process and getting their feedback. But just don't set it and forget it. ‘Okay, we set up an ordering system, now Susie is going to run with it,’ but Susie might fall off a little bit with that too, because she got really busy last month and if you're not checking it, she's never going to be held accountable, so then it starts to be less important for her. And Susie's got a lot of priorities in the office and for this to maintain as a top priority, she has to know that it's something that's a top priority for you, the practice owner. So we have to have repeated accountability and evaluating that system to make sure it's working for us.” (29:44—30:29)

“It's one of the easiest things that I think practices can do to make an impact with minimal effort and not really having to affect other things within the practice. A lot of the things that we do and coach with teams, they do have ripple effects into other areas of the office. This is something that's pretty streamlined and you can jump into it quickly. You can make an impact within a month's time, and it really doesn't have a ripple effect on much of anything else in the practice. So it's an easy go-to to start saving money month by month.” (30:37—31:11)

Snippets:

0:00 Introduction.

01:42 Miranda’s background.

02:45 You control your money; your money doesn’t control you.

05:26 Step 1: Inventory what you have.

07:18 Keep your cabinets clean.

09:03 Don’t rely on “the list.”

10:11 Organize your shelves.

13:36 Step 2: Set a supply budget and stick to it

16:07 There’s no shame in asking for help.

18:26 Step 3: Track what you spend.

20:33 The importance of the invoice.

21:49 Look for cost-effective alternatives.

25:00 Involve your team to control the narrative.

28:15 Final thoughts.

Miranda Beeson, MS, BSDH Bio: 

Miranda Beeson, MS, BSDH, has over 25 years of clinical dental hygiene, front office, practice administration, and speaking experience. She is enthusiastic about communication and loves helping others find the power that words can bring to their patient interactions and practice dynamics. As a Lead Practice Coach, she is driven to create opportunities to find value in experiences and cultivate new approaches. 

Miranda graduated from Old Dominion University, and enjoys spending time with her husband, Chuck, and her children, Trent, Mallory, and Cassidy. Family time is the best time, and is often spent on a golf course, a volleyball court, or spending the day boating at the beach.