The Numbers That Run Your Practice
How well do you really know the health of your dental practice? In this episode, Phil Cole challenges practice owners to look beyond production totals and ask a fundamental question: Do you know the numbers that truly drive your business?
While most dentists excel clinically, many rely on intuition rather than data when making business decisions. Phil explains why this reactive approach can limit growth and introduces the concept of the practice "instrument panel"—eight essential key performance indicators that provide a clear picture of financial and operational performance.
You'll learn why tracking metrics such as production by provider, collection percentage, overhead, new patient flow, case acceptance, hygiene reappointment rates, active patient count, and accounts receivable is critical to understanding what's really happening inside your practice. More importantly, Phil explains how these numbers work together to identify opportunities, uncover challenges, and support smarter decision-making.
This episode serves as the foundation for the series, giving you a practical framework for measuring your practice's performance. Phil encourages listeners to begin tracking these key metrics now, setting the stage for future episodes that take a deeper dive into each one and show how consistent measurement can lead to greater profitability, efficiency, and long-term success.
Transcript
Let me ask you a question, and be honest with yourself right now, without opening a report.
Speaker A:Do you know what your practice produced last month?
Speaker A:Do you know what you actually collected?
Speaker A:Do you know your overhead percentage?
Speaker A:If you had to guess your case acceptance, would you be within, let's say, 10 points?
Speaker A:Take a second with that.
Speaker A:I'm not asking whether you could find those numbers if you went digging.
Speaker A:I'm asking whether they live in your head, the way your schedule for tomorrow lives in your head.
Speaker A:Because those two things, what you produced and what's on tomorrow's schedule, are the same kind of information.
Speaker A:One is the plan, the other is whether the plan is working.
Speaker A:Most owners I sit down with cannot answer those questions.
Speaker A:Not because they're bad clinicians.
Speaker A:They're excellent.
Speaker A:They spent a decade learning to read a radiograph in three seconds and to feel a margin they can't even see.
Speaker A:They just have never been handed the instrument panel.
Speaker A:It's like they're flying a plane by looking out the window.
Speaker A:And on a clear day, looking out the window, everything works fine.
Speaker A:You feel busy, the schedule looks full and money's coming in.
Speaker A:The problem is the day it stops being clear, a payer changes a fee schedule, an associate starts to slow down.
Speaker A:For some reason, new patients dip for two months and you do not feel it until it's already cost you 1/4 of your year.
Speaker A:Today we're going to fix that.
Speaker A:This is the first episode of an eight part series on the eight things every practice needs help with.
Speaker A:And we're starting with the one that ties them all together.
Speaker A:And that's all the numbers together.
Speaker A:This is the Dental Business podcast brought to you by Class Solutions.
Speaker A:One team.
Speaker A:Five divisions aligned around your practice.
Speaker A:I'm Phil Cole and over 27 years I have valued, coached and transitioned to more practices than I can count.
Speaker A:Everything I am going to teach you this series comes from what actually works inside those practices.
Speaker A:It's not theory, not what looks good in a textbook.
Speaker A:What moves the numbers when a real owner with a real payroll walks into Monday morning and applies it.
Speaker A:This episode is brought to you by Class Solutions.
Speaker A:One firm, five divisions all pulling for your practice.
Speaker A:Practice transitions, coaching, accounting and tax, marketing and real estate under one roof.
Speaker A:Start with us@classsolutions.com so here's the trap.
Speaker A:You went to school to be a dentist, not a cfo.
Speaker A:Nobody taught you which numbers matter, so you either ignore them or.
Speaker A:Or you may be drowned in them.
Speaker A:Your practice management Software will throw 400 reports at you if you ask it.
Speaker A:That's not clarity.
Speaker A:That's noise.
Speaker A:And noise is worse than silence because noise feels like information.
Speaker A:You can spend an entire Sunday afternoon pulling reports, printing them, highlighting them, walking away, maybe knowing less than when you started because you never decided which numbers were the ones that actually run the business.
Speaker A:I want to name the two failure modes because almost every owner lives in one of them.
Speaker A:The first is the owner who ignores the numbers entirely.
Speaker A:They run the practice on what I always say.
Speaker A:They run the practice on feeling busy is good, slow is bad, and the bank account is the only dashboard.
Speaker A:The trouble is the bank account is a lagging indicator.
Speaker A:By the time it tells you something is wrong, the thing that caused it happened 60, 90 or six months ago.
Speaker A:And now you're reacting instead of steering.
Speaker A:The second failure mode is the opposite.
Speaker A:The owner who tries to track everything, 40, 50, 60 metrics on a spreadsheet, color coded.
Speaker A:And they still cannot tell if last month was a good month or not.
Speaker A:Because when everything is important, I'm going to tell you, nothing is important.
Speaker A:They have data, but they don't know or have a decision.
Speaker A:They can't look at the page and say, this is the one thing I need to fix this week.
Speaker A:The owners who win do not track more numbers, they track fewer, but they track the right ones.
Speaker A:And they look at them on a rhythm.
Speaker A:That's the whole game.
Speaker A:A small set of numbers watched consistently, acted on quickly.
Speaker A:Consistency, I will tell you, beats intensity every single time.
Speaker A:The owner who looks at eight numbers for 10 minutes every single month will run circles around the owner who does a heroic four hour deep dive.
Speaker A:Twice a year I break a practice into eight numbers.
Speaker A:Master these eight and you can run any practice.
Speaker A:Dental, chiropractic, optometry, urgent care, doesn't matter, the names on the door, the physics of a healthy practice, do not.
Speaker A:The rest of this series takes them one at a time.
Speaker A:And today I'm going to give you the whole panel so that you can see how they all connect.
Speaker A:So here are the eight numbers.
Speaker A:Number one, production by provider, not total production per provider.
Speaker A:Total production is the number most owners quote and it's the number that hides the most.
Speaker A:Total production is the sum of everyone's work.
Speaker A:So a strong producer can mask a weak one and you never see it.
Speaker A:When you break it down per doctor and per hygienist, the truth comes out really fast.
Speaker A:Here's how you read it.
Speaker A:Take each provider's production and set it against the hours they were in the chair and the schedule that they were handed.
Speaker A:What you are looking for is Whether each person is producing at the level the schedule allows.
Speaker A:A doctor working four days a week with a full schedule and a good procedure mix has a number that they should hit if they are all well under it you have a problem.
Speaker A:And the problem is one of three things.
Speaker A:The schedule is not feeding them the right procedures.
Speaker A:They are diagnosing, but they're not closing or they're too slow.
Speaker A:Each of those has a different fix.
Speaker A:And you cannot pick the fix until you have isolated the provider.
Speaker A:Let me give you a real pattern.
Speaker A:I see practice does $80,000 a month.
Speaker A:Owner's happy, feels busy.
Speaker A:We split it by provider and the owner doctor is doing 60 of the 80.
Speaker A:And the associate they hired to give themselves a Life is doing 20 on four days a week.
Speaker A:That associate is producing at a level that does not cover their own compensation or overhead.
Speaker A:The owner thought they bought freedom.
Speaker A:They actually bought a second job subsidizing someone else.
Speaker A:You cannot see that in the total.
Speaker A:You see it in the instant with per provider when total production is flat.
Speaker A:This is the number that tells you who and where it turns.
Speaker A:A vague feeling of we are stuck into a specific sentence.
Speaker A:Dr. Lee's production per day dropped 50% or 15% I should say over the last quarter and started when we changed the hygiene handoff.
Speaker A:Now you have something that you can actually fix.
Speaker A:Number two, collection percentage.
Speaker A:This is the one simple to define and brutal when it slips over everything you produce.
Speaker A:How many did you actually bring in door?
Speaker A:You take collections, you divide it by production over the same period and you get a percentage.
Speaker A:Healthy is 98% or better on a rolling basis.
Speaker A:Not one great month, a rolling average.
Speaker A:Because collections always lag.
Speaker A:Production and a single month will lie to you in both directions.
Speaker A:Now here is why this is the most expensive number to ignore.
Speaker A:It is money you already earned.
Speaker A:You paid for the staff, the materials, the lab bill, the chair, time the dentistry is done and out the door.
Speaker A:Collection percentage is the only number on this list where the work is already complete.
Speaker A:And you are simply deciding whether to get your own money.
Speaker A:If you're producing a million dollars a year and collecting 90%, you do not lose 10% of your effort.
Speaker A:You did all the work and you gave away $100,000 of it.
Speaker A:That's a car, that's a hire, that's a new renovation just gone every year quietly.
Speaker A:And I think that's something that is missed.
Speaker A:It's every year.
Speaker A:And here's the part that gets owners.
Speaker A:A two point slip does not feel like anything.
Speaker A:98 To 96 sounds like a rounding error on a million dollars.
Speaker A:It is $20,000 a year walking out the door.
Speaker A:And it will keep walking until someone names it.
Speaker A:The causes are almost always the same on a short list.
Speaker A:Claims going out with missing attachments, write offs.
Speaker A:No one is tracking statements that never get sent the balances that age until the patient forgets they even owe you.
Speaker A:None of that is a fee problem.
Speaker A:All of it is a process problem, which means all of it is fixable without seeing a single additional patient.
Speaker A:Number three Overhead percentage Huge.
Speaker A:Every dollar of overhead is is a dollar that never reaches you.
Speaker A:Overhead percentage is your total operating costs divided by collections.
Speaker A:It is the single best measure of how efficient your practice converts work into take home income.
Speaker A:And it is where the profit of the whole enterprise is won or lost.
Speaker A:Most general practices should run in the low 60s.
Speaker A:That leaves you a healthy owner's return.
Speaker A:When I see 75, 85, we've seen 95, I know exactly where to look.
Speaker A:Because overhead does not creep up evenly, it concentrates.
Speaker A:The big three are staff, which should land in the high 20s to very, very low 30s as a percentage of collections occupancy, meaning your rent and supplies, plus your lab.
Speaker A:When overhead balloons, it is almost always payroll that has drifted because you added positions faster than you added production or supply ordering that nobody controls.
Speaker A:Let me show you why that percentage matters more than the dollar.
Speaker A:Two practices both spend $40,000 a month on staff.
Speaker A:One collects 100,000, so staff is 40% and that practice is drowning.
Speaker A:The other collects 140,000, so staff is 28% and that practice is thriving.
Speaker A:Same payroll, though completely different businesses.
Speaker A:That is why you never manage overhead by starting at the expense.
Speaker A:You manage it as a percentage because the goal is not to spend less.
Speaker A:The goal is to produce and collect enough that every category falls back into its healthy band.
Speaker A:Overhead gets a full episode later in this series because it's the number owners most want to attack with a chainsaw and most need to attack with with a scalpel.
Speaker A:Cut the wrong costs and you kill the production that was paying for it.
Speaker A:We'll walk you through exactly which levers to pull and in what order.
Speaker A:Number four New patient count.
Speaker A:This is the top of your funnel.
Speaker A:The number of genuinely new patients who came through the door this month.
Speaker A:And I have to warn you about this one because it is the number every owner obsesses over and is the number that lies most easily.
Speaker A:Raw count lies because not all new patients are worth the same.
Speaker A:A hundred new patients who show up for a cleaning Decline everything else and never come back are worth less than 40 new patients who accept the care they need and stay with you for a decade.
Speaker A:If you chase raw count with heavy marketing, you can actually make your practice worse.
Speaker A:Filling your hygiene schedule with one time price shoppers while your treatment schedule stays empty.
Speaker A:Volume without quality is just once again expensive noise.
Speaker A:So track the count, but track it honestly.
Speaker A:Watch where they came from because a patient referred by an existing patient behaves completely different from the patient who clicked the cheapest ad.
Speaker A:Watch what they are worth in their first year, not their first visit, and watch your retention on them because a new patient who does not come back for their next hygiene visit was a cost, it was not a customer.
Speaker A:New patients only matter when they connect to the next number, which is what actually happens once they are in your chair.
Speaker A:Number five, case acceptance of the treatment.
Speaker A:You diagnose how much gets scheduled and done.
Speaker A:You take the dollars of treatment presented and you look at the dollars that you actually got scheduled.
Speaker A:That ratio is case acceptance.
Speaker A:And I will say this plainly, it is the single most leveraged number in the entire practice.
Speaker A:And here's why.
Speaker A:You already paid to create it.
Speaker A:You paid for the marketing that brought the patient in.
Speaker A:You paid for the chair time, the exam, the radiographs, the doctor's diagnosis.
Speaker A:Every bit of the cost is already spent by the moment the treatment plan exists.
Speaker A:Case acceptance is the point where all of that investment either turns into dentistry and revenue or it evaporates.
Speaker A:Two identical practices, same new patients, same diagnosis.
Speaker A:One accepts at 45% and one accepts at 70%.
Speaker A:The second practice produce 60% more from the exact same top of funnel without spending another dollar on marketing.
Speaker A:That is the whole ball game.
Speaker A:And when case acceptance is low, it is almost never a price problem.
Speaker A:It is a communication and trust problem.
Speaker A:The treatment was presented in a clinical language the patient did not understand, or it was presented as a list of procedures instead of a conversation about their health.
Speaker A:And there was no clear next step or no financial options offered at the moment of the yes.
Speaker A:Every one of those is a skill you can build and a system you can install.
Speaker A:We give case acceptance a full episode too, because moving this one number moves everything downstream of it.
Speaker A:Number six, Hygiene reappointment percentage.
Speaker A:When a patient finishes a hygiene visit, do they leave with their next visit already booked?
Speaker A:You measure it simply.
Speaker A:Of the patients seen in hygiene this month, what percentage walked out the door with their next appointment on the schedule?
Speaker A:Best practices are above 95%.
Speaker A:Most struggling practices are down around 60 or 70.
Speaker A:And they don't even know it.
Speaker A:This is the quiet number, and it might be the most predictive one on the whole panel because it tells you the health of your recall base, which is the engine that keeps the practice alive year after year.
Speaker A:A patient who leaves without their next visit booked is not a patient anymore.
Speaker A:They are hope.
Speaker A:You are hoping they call you back.
Speaker A:You are hoping the postcard works.
Speaker A:You're hoping they did not drift into the practice closer to their new job.
Speaker A:A patient who leaves with the appointment on the books is a patient that single behavior booking before they walk out is the difference between a practice that compounds and a practice that leaks out the back door as fast as marketing pours in the front.
Speaker A:The notice, the leverage.
Speaker A:If you are reappointing at 70% and you get into that 95, you did not just improve a statistic, you rebuilt your future schedule.
Speaker A:Every one of those patients is six months of production.
Speaker A:You no longer have to go chase this is why I love this number.
Speaker A:It costs nothing to fix.
Speaker A:It is a front desk habit and a verbal skill and it pays for every six months for forever.
Speaker A:Number seven Active Patient Count how many patients have been in within the last 18 months.
Speaker A:That window matters, so use it consistently.
Speaker A:18 Months.
Speaker A:One visit.
Speaker A:That is an active patient.
Speaker A: person who came in once since: Speaker A:The active count is the number of real living relationships you have right now.
Speaker A:So there's two reasons this number is so important.
Speaker A:First, it is the true measure of whether your practice is growing or dying, and it cuts through a good production month.
Speaker A:You can have a great month on the back of a few big cases while your active base is quietly shrinking underneath you.
Speaker A:Production can be up and your practice can be getting smaller at the same time.
Speaker A:Active patient count is the number that will not let you lie to yourself about that.
Speaker A:Second, and this is the one owners do not think about until it's time.
Speaker A:This is a number a buyer pays for, though when you go to sell or bring in a partner, the active patient count is the asset.
Speaker A:It is the reoccurring, predictable base of care that a buyer is actually purchasing.
Speaker A:Two practices with the same production do not sell for the same price.
Speaker A:And we've talked about this in other episodes.
Speaker A:If one has a growing active base of 2,000 patients and the other is living off a draining base of of 900.
Speaker A:If this number is shrinking, you are consuming your own practice and every month you wait the practice you will eventually sell is worthless.
Speaker A:Grow this number and you are building equity whether or not you ever plan to leave.
Speaker A:Number eight, accounts receivable over 90 days.
Speaker A:This is money you earned that is sitting out there aging.
Speaker A:Look at your total receivables and then look at the slice that is more than 90 days old, both as a dollar figure and as a percentage of the total.
Speaker A:In a healthy practice, the over 90 bucket is small, well under 15.
Speaker A:It should be under 10% of your total receivables.
Speaker A:When it balloons, you're effectively acting as an interest free bank for your patients and and your payers.
Speaker A:And you never agreed to that.
Speaker A:Here's the rule.
Speaker A:You have to internalize.
Speaker A:Money ages like milk, not like wine.
Speaker A:The day a balance crosses 90 days, the odds of ever collecting it fall off a cliff.
Speaker A:A balance of 30 days is almost certainly collectible.
Speaker A:The same balance at 120 days is a coin flip.
Speaker A:And at the year it is nearly gone.
Speaker A:Every day it sits is worth less and the effort to chase it goes up while the payoff goes down.
Speaker A:The good news is this is almost always the fastest number to fix on the whole panel.
Speaker A:It is real money.
Speaker A:It already belongs to you and it responds to a system in weeks, not quarters.
Speaker A:Someone has to own the aging report, work at oldest first and have a script for the calls.
Speaker A:When we take on a practice with a bloated over 90 balance, this is often the first cash we free up and is cash that was theirs the whole time.
Speaker A:It funds the very improvements we're about to make everywhere else.
Speaker A:So there's the panel 8 numbers.
Speaker A:Now here is the part I most want you to hear, because it's the part that turns eight statistics into one instrument.
Speaker A:Notice how they hand off to each other new patients.
Speaker A:Well, they feed the case acceptance.
Speaker A:Case acceptance that feeds production.
Speaker A:Production feeds collections.
Speaker A:Collections measured against overhead becomes your profit.
Speaker A:Hygiene reappointment that feeds your active patient count.
Speaker A:And of course your active patient count is the base that generates new production month after month after month.
Speaker A:Accounts receivable is the tax you pay when the collection ends at that chain.
Speaker A:And that chain gets really, really sloppy.
Speaker A:It is one system, a single connected system.
Speaker A:And that is exactly why owners get confused when they look at numbers with isolation.
Speaker A:Oh, production is down, so they panic about making or marketing, excuse me, and buy more new patients.
Speaker A:But when you can see all eight at once, you find out production is down because case acceptance slipped.
Speaker A:And case acceptance slipped because the treatment coordinator left two months ago.
Speaker A:More new patients would have poured in to the bucket with a hole in it.
Speaker A:The panel does not just tell you what's wrong.
Speaker A:It tells you where the chain and the link actually is.
Speaker A:When you can see all eight side by side, you can find the leak in about 90 seconds.
Speaker A:I do it in front of owners all the time and it looks like a magic trick to them, but it's not.
Speaker A:It's just the difference between starting at one gauge at a time and looking at the whole instrument panel at once.
Speaker A:A pilot does not check airspeed, then put it away and then check altitude.
Speaker A:They see it all together, and the relationship between the gauges is the information.
Speaker A:Same with your practice.
Speaker A:So how do you see all eight at once?
Speaker A:Well, every month, without spending your Sunday building spreadsheets.
Speaker A:Because, let us be honest, I just described a lot of math, and if the answer were to go calculate all of this by hand every month, almost none of you would do it.
Speaker A:I wouldn't do it.
Speaker A:And it would just pass over month over month over month.
Speaker A:So that is exactly why we built the class dashboard.
Speaker A:The dashboard pulls the numbers that matter out of your practice management software and puts them on one screen.
Speaker A:All eight, plus the supporting numbers underneath each one, side by side, month over month.
Speaker A:And benchmarked against practices like yours.
Speaker A:That benchmark matters.
Speaker A:It's the one thing to know your overhead is 68%.
Speaker A:It's another to know that practices your size in Your region run 62, so you have six points of profit sitting on the table.
Speaker A:Context turns a number into a decision.
Speaker A:You open it and you know with one look whether you're winning or are you leaking.
Speaker A:This is the instrument panel I said you were missing.
Speaker A:And here's what matters most about it.
Speaker A:Every class coaching client runs on it.
Speaker A:When you work with class coaching, you are both looking at the same live picture of your practice.
Speaker A:No more how do you think last month when we already know how last month, when we can both see it?
Speaker A:So we don't spend the call restructuring the past.
Speaker A:We spend the entire call on the one thing that matters, which is what we are going to do about this, this month.
Speaker A:And let's fix it.
Speaker A:The dashboard is the backbone of everything we do for this series.
Speaker A:Every single fix I teach you in the next seven episodes shows up as a number moving on that screen.
Speaker A:This is how you know it worked.
Speaker A:Not because it felt better, but because the numbers moved.
Speaker A:And you watched it move.
Speaker A:So before the next episode, I want you to do one thing.
Speaker A:Just one.
Speaker A:Pull these eight numbers for last month.
Speaker A:Even, rough numbers, even if you have to estimate Two of them.
Speaker A:Write them on one page, one number per line in your own handwriting.
Speaker A:Production provider collection percentage, overhead percentage, new patient count, case acceptance, hygiene reappointment, active patient count, and accounts receivable over 90 days.
Speaker A:That page is your first dashboard, and I promise you two things about it.
Speaker A:First, it'll take you less time than you think, probably 30 minutes.
Speaker A:Second, it will already tell you something that you didn't know.
Speaker A:Every owner who does this exercise finds at least one number that is nowhere near where they assumed it was.
Speaker A:That surprise, that gap between what you felt and what is true, is the exact moment you stopped flying by looking out the window and started flying by using the instruments.
Speaker A:Then over the next several episodes, we take each problem area apart and we rebuild it one number at a time.
Speaker A:So next week we start with the schedule.
Speaker A:The engine that either fills your day with the right work or.
Speaker A:Or quietly waste it.
Speaker A:Because a full schedule and a profitable schedule are not the same thing.
Speaker A:And I'm going to show you the difference.
Speaker A:Here is what I want you to do.
Speaker A:With everything that we covered today, you have two choices.
Speaker A:You can go back to the practice, try to install all of this on your own and hope it sticks.
Speaker A:A lot of owners do exactly that and a few of them make it work.
Speaker A:Not going to lie, it's possible.
Speaker A:But if I will tell you what usually happens.
Speaker A:You get busy.
Speaker A:Couple emergencies blow up your Tuesday.
Speaker A:The one page dashboard becomes a two page to do list.
Speaker A:And by March it's in the drawer or in the garbage.
Speaker A:Not because you're not capable, because you're running a practice full time.
Speaker A:And change that has no one holding it in place tends to drift back to the way it was.
Speaker A:Or you can let a coach who has done this hundreds of times install it with you, hold you to it and show you the numbers moving on your dashboard every single month.
Speaker A:The difference is not information.
Speaker A:You just got the information for free in this episode.
Speaker A:The difference is installation and accountability.
Speaker A:It's the difference between knowing what a healthy practice looks like and actually having one.
Speaker A:The clearest path is for us, the Practice Pulse membership.
Speaker A:And it comes in three tiers so that you can start wherever you choose to.
Speaker A:Our essentials is $9.97 a month and it gets you the dashboard and a monthly benchmark scorecard with a coach to review it each month.
Speaker A:So you finally have a panel in front of you every month and you get additional four 90 minute coaching sessions with additional reports.
Speaker A: Our pro tier at: Speaker A: hen there's our elite tier at: Speaker A:It is our owners building towards multiple locations.
Speaker A:It's those who are really growing or those who are looking at exiting in the next five to seven years where the stakes and the upside are both a lot bigger and you receive everything in the other tiers.
Speaker A:But instead of two, you get four on site coaching days.
Speaker A:And if you're not ready for a monthly coaching relationship yet, start with a practice health assessment.
Speaker A:We take one big deep dive and look at your practice across every number that matters and we hand you a 30 page written plan report and with a plan of what is to needs to be fixed first, in what order and it is a single fastest way to find out where the money is leaking.
Speaker A:And it comes with a full read on all eight numbers we cover today and more.
Speaker A:Think of it as a one time complete physical for your practice.
Speaker A:Whichever door you walk through, you land on the same practice or land in the same place.
Speaker A:I should say the class dashboard.
Speaker A:That's the single view of your practice that every class coach works from and it is where you will watch those numbers improve month after month in black and white.
Speaker A:Go to classdentalcoaching.com or book a discovery call and we'll tell you exactly where you stand.
Speaker A:No guessing, no sales pitch, just straight read on your practice.
Speaker A:But be ready for the truth that is it for this show.
Speaker A:If this helped you, and I think it did, do one thing for me.
Speaker A:Share it with any owner who needs it.
Speaker A:Someone who you know who is flying by, looking out the window on a clear day and then go pull those eight numbers for yourself.
Speaker A:I'll see you next week on this eight series journey when you get to work on your schedule.
Speaker A:We'll see you next time.
