Diagnosing hidden inefficiencies in your practice: Key insights and actionable strategies
Diagnosing hidden inefficiencies in your practice: Key insights and actionable strategies
Synopsis
5 Minute Read
How can you identify hidden inefficiencies in your practice — and take the right steps to improve its profitability? Our advisors discussed this crucial topic during MNP’s Diagnosing Hidden Inefficiencies in your Practice webinar on June 10, 2025.
Our advisors discussed common challenges that impact the profitability of your practice and shared insights to help you improve your performance, including:
- Grow your net new revenue
- Increase your existing patient revenue
- Revenue and profit enablement
- Benchmark your performance
Insight
Progress
Webinar
Professionals
How can you identify hidden inefficiencies in your practice — and take the right steps to improve its profitability? Our advisors discussed this crucial topic during MNP’s Diagnosing Hidden Inefficiencies in your Practice webinar on June 10, 2025.
Dental and veterinary professionals from across Canada received valuable insights and practical advice to help diagnose and address hidden inefficiencies and improve the performance of their practice.
Yohaan Thommy, National Leader of MNP’s Performance Improvement team, Ariane Babin, Quebec Lead with MNP’s Professional Services team, and Nakul Gupta, Senior Manager of MNP’s Value Creation team shared their knowledge with attendees to help them make their practices more efficient and productive in this insightful webinar.
How does EBITDA impact enterprise value?
EBITDA is your earnings before interest, taxes, depreciation, and amortization. It is an important financial metric that shows how much profit your practice makes from its daily operations before any financial or tax strategies are applied and provides insights into your overall financial health.
“What would be a good EBITDA margin? In my experience, a well-managed dental clinic typically sits at around an 18 percent to 20 percent normalized EBITDA margin. A well-managed veterinarian clinic has an 18 to 24 percent normalized EBITDA margin,” says Ariane.
Practitioners who fail to monitor the financial health of their practice and take proactive steps to optimize their business value drivers often have a lower EBITDA margin. This results in reduced take-home earnings and a substantial decline in the overall enterprise value of their business.
What hidden inefficiencies impact the profitability of your practice?
Cost management issues
Cost management issues such as high staff costs and unoptimized marketing spend can lead to EDITDA leakages in your practice. For example, your practice may allocate a significant amount of its budget toward marketing. However, if your patients are largely coming to your practice through word of mouth, this is a waste of money. It is crucial to monitor where you are spending your money and where your patients are coming from to determine whether you are receiving a return on your investments.
“High staff costs means more people. However, more people doesn’t always mean more productivity,” says Ariane. “Sometimes it’s a scheduling issue, sometimes it’s a delegation issue. Either way, it costs you your margin and leads to poor profitability and decreased enterprise value.”
A lack of CAPEX planning can result in the unplanned timing of investments or overinvestment in the repair of older equipment. It can also cause an absence of investments based on return on investment (ROI) or prioritizing areas of investment of growth.
Operational inefficiencies
Operational inefficiencies may involve outdated equipment or ineffective supplies management — leading to overstocking or understocking. This limits the free cash available for your operations and can cause higher debt and waste for your practice.
Revenue risks
Revenue risks include underutilized capacity, low patient retention, limited service offerings, and high rates of redoing treatments. Ariane says, “Underutilized capacity has a huge impact. You’ve got the space and the chairs, but not enough billable time. Sometimes it’s not about hiring more people — it’s about optimizing what you already have.”
How to address hidden inefficiencies in your practice
Grow your net new revenue
Net new revenue is the additional revenue your practice generates year-on-year from new sources. This commonly includes new patients, the addition of new services, or increased spending by your existing patients on new treatments.
Implementing a smooth intake process for new patients and offering additional services or specialists to complement the care your existing patients receive can help increase your net new revenue. Evaluating the impact from your marketing expenditure will also help you better plan your spending across areas and channels that drive the intentional growth of your practice or clinic.
Additionally, actively monitoring your google reviews and making intentional positive responses, especially in key growth areas, — can all help drive your net new revenue.
““With improved processes, you can track your spending and utilize data effectively. This will help you optimize the services your patients use — ultimately leading to increased revenue growth,” says Nakul.
Increase existing patient revenue
Growing your revenue from your existing patients is a strategic and cost-effective method to increase your practice’s profitability. It reflects a strong relationship with your patients, provides recurring revenues, and serves as the best endorsement for new patients through word-of-mouth referrals.
“Are you understanding why people come to your clinic for the first time? That data is so important,” says Yohaan. “One of the pieces of advice I give is to block off about 45 to 50 minutes a week to see if you can follow up with some new patients coming into your clinic.”
Consider whether your budget is aligned with the service and product needs of your patients and invest in patient and resource scheduling tools to increase operational efficiency and grow your existing patient revenue. Additionally, reviewing the effectiveness of your booking software and exploring how to leverage technologies such as CRM platforms to reduce lost revenue from missed service offerings or non-recurring customers.
Revenue and profit enablement
A lack of proactive strategies can inhibit long-term financial success. Revenue and profit enablement refers to the strategic alignment and optimization of all processes, tools, and teams that contribute to generating revenue across your different product and service offerings.
“When we talk about revenue and profitability enablement, I think it’s more about how you make decisions about the factors that can drive revenue, profitability, or control in your practice,” says Nakul. “You need to use the tools and information available because your systems actually have an immense volume of data to support your decisions.”
Taking the right steps to optimize your staff and patient scheduling will reduce idle time and cancellations. Using data to offer tailored bundles will drive higher per-visit revenue and improve the overall profitability of your practice. A margin analysis will help further support better pricing and service offering decisions — and optimizing the fixed and variable costs of your practice will reduce your overall expenses.
There are many ways to drive positive revenue and profit improvements, including:
Benchmark your performance
Benchmarking involves comparing the performance metrics of your practice to industry standards or best practices. Performance metrics integrate both financial and non-financial metrics to provide a balanced overview of your practice’s health. Some key KPIs include:
- The percentage of revenue earned from existing patients
- Profitability by procedure delivered
- Number of treatment retakes
- Active / capacity booked in the next four weeks
- Paid hours versus billable hours
- Average revenue per patient
- Billing per equipped room
- Percentage of active patients
- Supplies as a percentage of revenue
“While you shouldn’t just focus on these nine metrics, these are some important KPIs to monitor your practice’s performance,” says Nakul. “Benchmarking provides a clear indication of how your own business is performing as well as a clear variable to compare versus other practitioners in the industry. Selecting the correct metrics provides a clear picture of areas where performance needs to be improved and what operational levers need to be pulled to achieve the expected result.”
Creating a self-updating scorecard with key business indicators is crucial for monitoring your results. Effective practitioners rely on BI dashboards that automatically provide real-time insights, enabling them to focus on strategies that enhance performance instead of worrying about data accuracy. Without a performance dashboard, you risk inefficiencies, missed growth opportunities, and lower profits.
Take the next steps
For more information about how to address hidden inefficiencies in your practice, contact a member of our Consulting team.
Nakul Gupta
Senior Manager, Consulting - Performance Improvement & Operational Excellence
Insights
-
Performance
June 27, 2025
Are you paying more than your fair share in property taxes?
How can you know if you’re paying more than your fair share of property taxes? A property tax assessment review can help ensure accuracy.
-
Performance
June 19, 2025
Are you in the market for more equipment? Whether you buy or lease could make a big difference in your farm’s success
Building an asset purchase plan before buying new equipment can help you make an informed decision to best suit your needs.
-
Confidence
June 18, 2025
Succession Planning Basics: How to get what you want for your business
Knowing what you need and what your options are is difficult to do on your own and often the reason business owners fail to plan for their own exit.
