It’s hard to get excited about a 1% reduction in costs, or a 1% increase in profits for that matter. The excitement of a big move is why the lottery is newsworthy and an audit is not.
What are the odds of a lottery-size increase in profit or decrease in cost happening to your office? I was speaking with a man the other day who was retelling his tales of fortune and his biggest move was buying property in Atlantic City before gambling was legalized. Is this a huge, exciting move? Yes. Was it anything but dumb luck (insider information) and blind risk-taking? No. Is it reproducible? No, it was a once-in-a-lifetime opportunity.
When I was working at Sealed Air I had a colleague in equipment servicing who would go out on calls to fix machinery. The servicemen were additionally allowed to sell products like Bubble Wrap to the customer if they were running low and collect a commission. This man was initially discouraged by the commission brought in by such small sales. By the time he got to those companies they were already a customer with a big equipment investment (with a big commission which went to some other salesperson) and all they needed were small supplies. To paraphrase his words: “All I would make is around $50 per sale which seemed like nothing compared to the commission on the equipment. I barely tried to sell additional supplies and all of the commission from the supply sales went to the salesperson who was called up to resupply. I started to put some effort in and I realized that even though each sale is really small, they’re pretty much guaranteed without much work and each little commission of $50 starts to add up over a whole year.” For him the commission ended up adding about $10,000 per year to his base salary.
How can you use this information?
Think about what you can do to increase efficiency (decrease cost) and generate additional income (increase profit). Let’s say you can decrease your crown prep time or impression time by using a faster setting material. After the initial learning curve maybe this saves you about one minute per patient. Not a lot of time, but what if you do 100 per year? That’s 100 minutes saved. Still boring. But what if you changed 10 things to save one minute per patient for crowns? That’s 1,000 minutes saved. What if 5 of those things you changed translate to other procedures as well? If they save 30 seconds for every patient in your practice, that would be how many minutes saved per year? You could see more patients to increase income or work fewer days and maintain the same salary.
What about selling electric toothbrushes at your office? Will you sell a lot of them? No. But what if you sold 30 per year at a profit of about $30 each? That’s $900 per year which is boring. What if you found 10 more products? That’s $9000 per year!
Success is boring but consistent.