Is it time to expand your services?
Adding new services to your practice can be a great way to drive more revenue. In this post, we’ll run through some of the things you need to consider before making the decision to expand your services.
The cost of equipment and training
Whether the new service offering will be delivered by you, an associate dentist or other team member, there will be monetary costs to consider. Not just the purchase of equipment, tools and supplies, but the expense of training and potential lost productivity during the learning curve. It’s a good practice to calculate a break-even point to determine how long it will take to recoup your initial investment through new future revenues.
Profit margin of the new service
If performing the new service necessarily means you will perform fewer of your current ones, you need to compare the profit margins to make sure you’re not replacing a high-margin service with a lower-margin one.
Adding a new service presents a marketing opportunity. While advertising new services costs money, you won’t necessarily need to allocate more of your budget to marketing than you already do, with the added benefit of having an exciting new message to share.
If the new service requires new equipment, you will need to figure out where you will put it and how the addition would affect your current workflow.
The value of diversification
Diversifying your services will typically reduce business risk and add financial stability to your practice. Just like diversifying an investment portfolio, the broader the range of services you offer, the more flexible you can be in attracting new patients or serving your current ones.
Impact on your professional satisfaction
For some doctors, adding new procedures to their repertoire increases their job satisfaction. For other doctors, these new responsibilities have the opposite effect, making work more challenging.
Knowing yourself and what you would like the clinical side of practice ownership to look like can help you make smart service expansion decisions.