Running a dental practice, especially one with multiple locations, is no small feat. Ensuring financial health and operational efficiency often boils down to one critical metric: EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). But what happens when your practice revenue plateaus and your bottom line feels stagnant? Before overhauling your entire operational structure, consider whether your practice management software is driving profitability or holding you back.
This guide will help you understand EBITDA’s importance, how to calculate it, and how to evaluate whether your current software is helping or hindering your financial goals.
Why EBITDA Matters
EBITDA provides a clear picture of your practice's operational profitability by focusing on core earnings, excluding the effects of financing and accounting decisions. It’s a critical metric for:
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Assessing financial health.
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Identifying inefficiencies.
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Attracting higher valuations when selling a practice.
Increasing EBITDA year over year is desirable. Practices with an EBITDA range of $200,000 to $500,000 typically fetch higher valuations, as buyers often pay multiples of EBITDA (3x to 7x). However, the exact target can vary based on factors such as the practice's location, patient base, and overall market conditions.
Tracking and Improving EBITDA
Calculating EBITDA involves subtracting operating expenses from revenue and adding non-cash expenses like depreciation and amortization. This figure offers insight into your practice’s core profitability. Accurate tracking requires robust accounting software, detailed financial records, and tools to benchmark performance against industry standards.
To improve EBITDA, focus on two principal areas: revenue growth and cost management. Strategies include increasing patient volume through marketing, enhancing service offerings, optimizing staff productivity and scheduling, and streamlining billing and payment processes.
Should New Dental Practices Track EBITDA?
Absolutely, yes. Even if you do not anticipate selling your practice any time soon, knowing and understanding your EBITDA is essential for assessing the operational performance of the practice, free from the effects of financing and accounting decisions. By analyzing trends in EBITDA, owners can pinpoint areas requiring improvement, such as cost management, patient flow, or pricing strategies. This operational insight is invaluable for making informed decisions and strategic planning. Additionally, benchmarking against industry peers using EBITDA can highlight areas where the practice excels or lags, providing a roadmap for competitive positioning.
The Hidden Impact of Practice Management Software on EBITDA
Your dental practice management system plays a critical role in your financial success. If it struggles with scheduling, billing, patient engagement, or staff productivity, it may be silently draining your EBITDA. Ask yourself: does your software truly empower your practice to thrive? Does it streamline operations from start to finish and enhance your team’s productivity?
If you haven’t compared your legacy system to the latest cloud-based solutions, you could be overlooking how much your current software holds back your potential profitability.
Self-Assessment: Is Your Software Supporting Your EBITDA Goals?
Evaluate your software by answering the following questions. For every "no," consider the potential impact on your practice's profitability.
Optimized Operational Efficiency
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Does your software offer self-scheduling for patients and streamlined appointment management for your team?
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Are billing and payment processes automated?
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Can you access patient information, treatment plans, and schedules in a centralized, user-friendly interface?
Enhanced Revenue Streams
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Does your software enable targeted communication to promote high-margin services?
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Does it support an effective patient recall system for regular check-ups?
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Can you create detailed treatment plans with instant insights into coverage and deductibles?
Reduced Labor Costs
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Can you easily access reports to assess staff productivity?
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Does the software offer voice-activated perio charting for hands-free hygiene workflows?
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Is team training seamless, ensuring fast onboarding?
Maximized Patient Retention and Acquisition
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Does your software enhance patient experiences with features like text-to-pay and two-way communication?
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Can you create and track customized marketing campaigns?
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Does it efficiently manage patient referrals?
Fine-Tuned Fee Structure
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Does your software analyze and suggest fee adjustments based on market trends?
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Can it integrate with flexible payment platforms like Global Payments?
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Does it provide easy aging reports and quick insurance verification?
The Curve SuperHero™ Difference
If you found yourself answering “no” to these questions, it’s time to consider upgrading your practice management software. An all-in-one, cloud-based solution like Curve SuperHero™ can transform your operations by:
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Streamlining scheduling, billing, and patient engagement.
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Reducing overhead and maintenance costs.
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Automating workflows to enhance staff productivity.
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Providing real-time financial insights for informed decision-making.
Curve SuperHero’s integrated tools, like Curve GRO®, empower practices to improve patient satisfaction and loyalty while driving profitability. Additionally, its advanced analytics help practice owners monitor KPIs and adapt strategies to boost EBITDA margins.
Don’t Let Outdated Software Hold You Back
Your software should be an asset, not a liability. Curve SuperHero™ helps dental practices unlock untapped potential by simplifying operations, improving patient care, and increasing profitability.
Learn if your practice is future-proof by downloading the 2025 Dental Industry Report: Trends Changing the Dental Landscape.
Schedule your Curve SuperHero™ demo today and take the first step toward boosting your EBITDA and driving your practice to new heights.
