Financial problems rarely appear overnight. In most dental practices, the warning signs start small — and if spotted early, they’re often easy to fix. The danger comes when they go unnoticed for months (or years), quietly eating away at profits and stability.
Here’s how to recognise common red flags before they turn into serious problems.
If your margin (revenue minus direct costs like labs and materials) is shrinking, it could mean rising supplier costs, under-pricing, or inefficient use of resources. Even a 2–3% drop, left unchecked, can have a huge annual impact.
For a practice with £600,000 in annual revenue, that equates to £12,000-£18,000 in lost gross profits
Here’s how to recognise common red flags before they turn into serious problems.
Staff are your biggest asset — and one of your biggest expenses. If payroll costs keep rising faster than revenue, it’s a sign to review rotas, overtime, and team efficiency.
The focus should be on upskilling and training staff, ensuring motivation/morale is high and the impact will be a net positive to your practice and profits.
For a practice with £600,000 in annual revenue, that equates to £12,000-£18,000 in lost gross profits
Here’s how to recognise common red flags before they turn into serious problems.
Consistently struggling to pay bills despite being “profitable” on paper is a clear warning sign. This can point to slow collections, poor payment terms, or mismatched income/expense timing.
Build a buffer, try to improve payment terms with suppliers and tighten credit controls.
If lab and stock spend climbs month after month without a clear business reason (e.g., more complex cases), you could be dealing with price creep, over-ordering, or waste.
If too much of your income comes from one type of treatment or one contract (e.g., NHS), your practice becomes vulnerable to changes in demand, policy, or pricing.
Try to introduce multiple patient acquisition channels and introduce other services (endodontics, paeds etc) if not already offered.
Spotting financial red flags early gives you options: you can make adjustments, negotiate with suppliers, or reallocate resources before the problem becomes urgent. The best-run practices don’t just measure performance — they act on the first signs of trouble.
Review the past 6 months of your key financial metrics and highlight any negative trends. Pick one to address this month.
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