Capacity Matters!

Recently, a client confided to me that he was feeling burnt out with all the hours he was putting in at his practice. He was starting to think about retirement after 20 years of building his practice, so he was considering reducing the hours of operation and active-patient count.

As his accountant, I knew this was the worst possible move he could make for his business. I asked him to pause for a minute and think about two important points:

  1. You should always aim to build capacity in your practice, never to reduce it.
  2. As you start to wind down your career and head into retirement, shouldn’t your practice be thriving and growing so that you can sell it for a tidy profit?

The client agreed that these points did make sense for his business but he still needed to reduce his working hours, so he needed a solution.

That solution was to calculate the capacity of his practice.

What is capacity?

You already know what your current numbers are – but do you know what these numbers should be?

Capacity determines the optimum combination of providers to patients, hours spent on hygiene vs. operatories and patient visits per year vs. length of visit, calculated using a specific formula.

Capacity can help you determine optimal numbers for the four key areas of your practice:

  • Number of providers/practitioners
  • Number of active patients
  • Operatories
  • Hours dedicated to hygiene

How do you calculate capacity?

(# of active patients x 80%) x 2 visits per year x length of average appointment / # of weeks practice is open annually = minimum demand for hygiene hours*

*This formula is not an exact measure for your practice – it should be used as an approximate guideline to the optimum performance for your practice. It will also highlight which areas of your practice might need more attention and time.

Solution for the Client

We realized that the client’s practice could comfortably sustain a second DDS practitioner. With this new hire, the client could reduce his own hours and still build capacity for his practice, thus allowing him to work fewer hours AND earn more money.

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