Most practice owners focus on the obvious expenses — associates, staff wages, and lab bills. But often, the real profit leaks come from hidden costs buried in day-to-day operations. Left unchecked, these can add up to tens of thousands of pounds a year.
Here are five of the most common — and how to stop them.
Ordering more than you need — or buying products that sit on a shelf until they expire — is a silent drain on cash flow. It may seem like a small one, but imagine what else you could do with that cashflow?
Tip: Have staff track expiry dates, review usage trends monthly, and rotate stock so nothing is forgotten in the back of a cupboard.
Lab fees tend to rise gradually over time, and without regular comparison, you may be overpaying. We are not advocating using cheaper labs that produce inferior work – rather using good labs that produce high quality work and ensuring your fees align to the quality of work being provided.
Often just having a conversation with lab owners can help secure better lab fees, especially when you are a valued client
Tip: Review your lab costs annually. Even a 5% saving on a £36,000 yearly lab spend is £1,800 straight back in profit. You can invest that into staff training meaning they upskill and that yields yet further ROI.
Occasional overtime is fine, but if it’s routine, it could signal inefficiencies in appointment scheduling or staff allocation. Perhaps you are short-staffed? Regular overtime can be more expensive than recruiting an additional staff member. That may also increase the group productivity.
Even if it does not, it likely means better service provided for patients and less work on individual staff members.
Tip: Analyse when and why overtime occurs — often, better diary management can remove the need altogether. Ensure you speak to the associates.
Some practices spend heavily on ads or sponsorships without tracking returns. If you can’t measure the impact, you can’t improve it.
Long term you also want to ensure the majority of your patient base is made up of existing patients (whom you already spent marketing dollar to acquire) and word-of-mouth referrals. This will drastically bring down your customer acquisition cost (CAC).
Tip: For every marketing pound spent, track enquiries, conversions, and patient value to see if it’s actually profitable.
Provide the best service and care so that once acquired, the patient remains a patient for (ideally) their lifetime.
Every late-paying patient or patient debt carried can reduce cash flow and increases admin costs.
Ensure you collect deposits upfront and that treatment is paid for in full before completion. In business cashflow is often the most important factor.
Tip: Have a clear collections process, use automated reminders, and reconcile payments weekly to spot issues early.
These hidden costs rarely seem significant day-to-day, but together they can quietly erase a huge chunk of profit. More importantly, it can help with cashflow. By reviewing them regularly and putting systems in place to control them, you can protect — and grow — your bottom line without seeing a single extra patient.
Action Step:
Pick one hidden cost from this list and audit it this week. You might be surprised how much you find.
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