Why Do Tech Companies Sell For 10x To 100x Their Revenue, While Dental Practices Are Only Worth 1x Their Yearly Revenue?
So back to the question, why are dental practices only worth their yearly production? Because they have to work hard for every dollar they get! WhatsApp does not. There is no recurring revenue (or as I like to call it, Free Money!) The great thing about software is that once it is built, the money keeps rolling in without much work invested. You basically get “Free Money.”
So how can a dental practice get recurring revenue? It’s easy, do what dental insurance does. Half of the US population does not have dental insurance. That means that about half of your patient base does not have insurance as well. Let’s work with some numbers. If you were able to sell your Private Dental Plan for an average of $65 to 350 patients, that would mean that you would make $22,750 per month or $273,000 per year without doing any dentistry! Let’s say your practice produces $500,000 annually, you can add the revenue from your private plans up and you are now worth $1.32 million! Here’s the calculation: $273,000 x 3 + 500,000 = 1.32 million. Mind you, this is if you only stay at 350 patients. You should be able to grow a lot more over the years!
Don’t forget the most important part of all this: Automation!. You need a software to do these things for you automatically. If you cannot do that, you will lose a lot of money instead! Currently, there is only one company that even offers such a thing. They are called denefits. They do charge $300 a month, but do you really care when you make $22,000 a month from them? I would say it’s well deserved!
New Insight Into Why Your Dental Practice Is Not Growing!
If your practice is not growing anymore, then please read on. If it is growing, then please read on anyways because your practice will be worth a lot more!
Let’s analyze why a practice stops growing in the first place. Say you are the only dentist in your practice. Say you produce $5000 in a day, but if you worked really really hard every day you can average $8000 of production. Now that’s a lot of money, but it comes at a price: YOU! You cannot live the way you want to, your family cannot have the parent/spouse they need, you cannot take vacations or breaks comfortably without thinking about the $8000 you lose every day! You work like a dog, and at the end of the year you will make a lot of money, but the very next day, month or year is the same exact thing. You keep working hard with no end in sight. You can hire more associates, but these associates also have a ceiling. You as a dentist or your associate can only do so much labor! Managing these associates becomes even more stressful especially if the month is not going well!. What can you do? All this labor that you put into your dentistry never seems to pay you back! It’s back breaking labor to do implants, fillings, root canals and crowns all day every day!
Now, think about the life of a dental insurance company executive. They go to their office, make a few calls, look at the numbers, take a long lunch, look at more numbers, then they go home. Why is their life so much easier? You are the one doing all of the work, but they are the ones with an easier life! What’s the difference? Recurring Revenue is the difference!
Insurance companies can sit back and relax because there is a ton of customers paying them for coverage just in case anything happens. When it does, they pony up most of the time and pay you, the dentist. But ask yourself this, how many more times will this one patient have more cavities, or need a crown? If you as a dentist did your job right, then it will be maybe 5 to 10 years until something else is needed. But within these 5 to 10 years, the dental insurance company has collected thousands of dollars by doing nothing!
Why can’t you as a dentist do the same thing? Why can’t you charge a monthly premium to insure your patient from a dental disaster? Really, if you think about it, there are only 2 diseases dentists need to really worry about. Cavities and periodontal disease. Both are controlled by good oral hygiene and regular cleanings. That means that if you just give regular cleanings, then those patients will never need anything else, thus avoiding any major dental disasters. Any disaster you can prevent also means free money in your pocket as well!
Insurance companies have the manpower and the systems to make it profitable. You as a dentist do not. The only company whose software is robust enough to easily automate the process for you is Denefits. Join them, I guarantee you won’t regret it.
Dental Insurance companies are profiting at record levels, does that mean your dental practice is too? No? Watch this to find the solution!