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What does the schedule have to produce before you earn a dollar?
Most owners can name their monthly overhead and still cannot say what a Tuesday has to hit. Those are different numbers, and the second one is the one you can actually manage against.
What the schedule has to produce
Starts with example numbers · nothing is sent anywhereRent, staff wages and payroll taxes, insurance, software, loan payments, utilities: everything that arrives whether or not a patient does. Your P&L has it; leave your own compensation out.
Clinical days, not calendar days.
Hours with a patient in a chair, not hours the building is open.
As a share of production. Most practices land between 12% and 20% combined.
Associate pay as a percentage of their production. If you are the only dentist and pay yourself from profit, set this to 0.
What you want left over after everything above is paid.
Your average production per patient visit (total production divided by visits for a typical month), used to turn the target into a number of appointments.
The number that matters
Every day you open the doors costs $8,193 in production before the practice earns a dollar. At $1,150 a visit, that is about 8 appointments just to break even, and 10 to hit your profit goal.
Only 56¢ of every production dollar is left to cover fixed costs once supplies, lab and doctor pay come out. That is why break-even is always higher than owners guess. They divide by one instead of by the margin.
How to read it
Divide by the margin, not by one.
The mistake in every napkin version of this is treating production as if it were profit. It is not. Before a dollar of production reaches your rent, it has already paid for the composite, the lab bill and (if an associate did the work) the doctor percentage.
So the formula is daily fixed cost divided by the margin that survives, not daily fixed cost on its own. With supplies and lab at 16% and doctor pay at 28%, only 56 cents of each production dollar is left. That means every $1,000 of fixed cost needs about $1,786 of production behind it.
This is the same model I run inside my own practices. The value of it is not the number. It is that the number is daily, so it turns into a decision your team can make at the morning huddle instead of a surprise at the end of the month.
Questions
Before you act on it.
Why is my number higher than I expected?
Almost always because the napkin version divides fixed costs by one instead of by the margin. If supplies, lab and doctor pay take 44 cents of every production dollar, only 56 cents is left to cover rent and wages, so you need roughly $1.79 of production for every $1 of fixed cost, not $1.
Should my own pay go in fixed costs?
No. Put associate compensation in the doctor percentage, and leave your own draw out entirely. It comes from the profit goal, not from costs. Otherwise you are asking the practice to break even on money that is already yours.
What counts as a fixed cost?
Anything that arrives whether or not a patient does: rent, staff wages and payroll taxes, insurance, software, loan payments, utilities. Supplies and lab are not fixed. They scale with the work, which is why they sit in the margin instead.
How do I use this day to day?
Post the break-even number where the team can see it and compare it to scheduled production each morning. A schedule that is below break-even before the day starts is a problem you can still fix at 8am and cannot fix at 5pm.
Knowing the number is step one. The course is about hitting it.