April 24, 2025
The success of your dental practice or DSO hinges on one balancing act: meeting immediate needs while also planning for future growth.
Focus too much on the short term? You’ll either lose out on potential for growth or ignore long-simmering problems. Too much focus on the long-term means you can potentially stumble over roadblocks with cash flow and hitting production numbers week by week, month by month.
Finding this equilibrium is crucial for sustained success as one study by McKinsey found that this leads to results like:
The principles of balancing short-term goals and long-term growth apply across the spectrum of dental practices, from solo practitioners to large DSOs. Regardless of size, every dental business faces the challenge of meeting immediate needs while planning for future expansion.
In this post, we'll explore practical strategies to help you navigate the challenges of balancing short-term goals with long-term growth aspirations.
The first step in balancing short-term and long-term objectives is taking a look at how your daily operations are running and seeing how they align with your overall strategic vision.
SMART goals are a great tool for this. This means setting goals that are:
For example, you might set a short-term goal of increasing hygiene production by 10% in the next quarter, while also planning for a 5% overall growth in the coming year. These goals should be integrated into a detailed business plan that clearly connects daily tasks to long-term growth objectives.
Implement systems to track progress and measure important KPIs for your practice.
An e-procurement platform to track and analyze your supply costs against production on a monthly basis. These systems can also help track compliance with both vendors and internal practices on a monthly basis. Regular monitoring ensures that negotiated terms are being honored and that your team is adhering to established procurement protocols.
During regular team meetings, you can reinforce the connection between these KPIs, daily work, and future growth. Monthly staff meetings, meanwhile, can give you more data to review and see how you’re pacing versus annual objectives.
This not only keeps everyone aligned but also fosters a sense of ownership and purpose among your team.
Effective financial management is at the heart of both short- and long-term growth.
Start by reviewing (or creating) your budget that allocates resources for both immediate operations and future expansion. If you're managing a DSO, you’ll also have to consider individual budgets for each practice while also planning for overall organizational growth.
Moreover, having a very clear picture of cash flow is vital. Keep a close eye on your collections as a percentage of production, aiming for at least a 98% collection rate. This ensures you have the necessary funds to cover immediate expenses while also investing in future growth.
Optimizing your procurement processes and accounts payable strategies can also help optimize your cashflow. With clearer visibility into these areas of your back office, you can better align your purchases (supplies, equipment, etc) or other investments with your practice’s financial rhythms.
Speaking of technology and equipment, carefully evaluate or project ROI over a 3-5 year period. While new digital imaging equipment might have a significant upfront cost, the long-term benefits in terms of improved patient care and increased efficiency could justify the investment.
Don't forget to build financial safety nets. Allocate a percentage of your monthly revenue to both an emergency fund and a growth fund. This dual approach ensures you're prepared for unexpected expenses while also saving for future expansion opportunities.
As we touched on previously, effective inventory management is a powerful lever for overall practice health.
Pay particular attention to how you’re managing your inventory at your practice. Establish par levels for supplies based on monthly usage patterns. This helps prevent both stockouts and overstocking, optimizing your cash flow.
Balance just-in-time ordering with bulk purchasing for cost savings. For high-use items like gloves, consider bulk orders to take advantage of volume discounts. However, for perishable items or those with fluctuating demand, more frequent, smaller orders may be more appropriate.
Once you have a better handle on your inventory processes, revisit your relationship with vendors. If you’re only working with one supplier, we strongly recommend adopting a multi-vendor approach. Having at least 2 to 3 suppliers can ensure you avoid supply chain disruptions or certain supplies being out of stock.
You should also be regularly reviewing your contracts with vendors for year-over-year price increases and rebate thresholds to avoid unexpected costs and maximize savings. Conduct quarterly business reviews with your vendors to ensure you're getting optimal pricing and service. If you are working with a variety of them, perhaps narrow these reviews to the top five. These reviews also provide an opportunity to discuss future needs and potential partnerships that could support your long-term growth.
Trying to manage these processes manually can be downright impossible. Consider a procurement platform like Method so you can compare prices across vendors and track spending against budgets. This data-driven approach can lead to significant cost savings in the short term while informing strategic decisions for long-term growth.
Once your back office is sorted, it's time to turn to the patient-facing aspect of your practice.
When introducing new services, do so strategically based on market demand and your practice's long-term goals. For instance, you might phase in clear aligner treatments over 6 months while maintaining focus on your core services.
With your new systems and processes in place monitoring inventory, you’ll better be able to spot spikes in supply spend. Using your e-procurement platform, cross-reference with production data to determine if it correlates with increased procedures. This analysis helps distinguish between necessary expenditures for growth and potential inefficiencies in procurement.
Staff training should reflect both current needs and future growth areas. Schedule quarterly CE sessions to keep skills sharp for current services, and plan annual training for new technologies or services you're planning to introduce.
Patient feedback is invaluable for both immediate improvements and long-term planning. Make it easy for your patients to leave feedback and incorporate results into your monthly reviews. Use this information to make a priority list of immediate concerns, and use the aggregated data in your annual strategic planning to inform future service offerings.
Finding a steady balance within your dental practice is an ongoing process that requires careful planning, consistent execution, and regular reassessment.
The dental industry is constantly evolving, and your ability to adapt while maintaining a long-term perspective will be crucial to your success. Maintaining flexibility is key. Your practice will have its own rhythms based on your patient base. Monthly, quarterly, and annual planning sessions can help you adjust your strategies as needed.
While implementing these strategies may seem daunting, the benefits are worth the effort.
