How to Control Spend with Dental Practice Budgets

Reducing waste through smarter procurement can help raise your EBITDA, but achieving formulary compliance is only half the battle – you also need budgets to proactively manage spend.

As a leader in the dental procurement industry, we often talk about the importance of filling leaky buckets. After all, what good is a purchasing strategy if you can’t keep track of where your money is going?

Following staffing costs, supplies are typically the next largest expense at dental practices. But while accounting for predictable costs like staff compensation is a simple and straightforward task, keeping track of variable expenses in your dental office budget can present a challenge. 

Dental inventory needs and order volume fluctuates from month to month, resulting in imbalances that can be difficult to track if you are still using manual budget spreadsheets. Add in the variability of supply costs when renegotiating vendor contracts and it’s easy to see how many practice owners struggle to get a quick and reliable pulse on their supply expenses for their annual operating budget.

Fortunately, dental budget software is keeping up with the increasing complexity of dental support organizations (DSOs) and their dental procurement lifecycle. Read below for everything you need to know about controlling spend with dental practice budgets.

Dental practice budgets for supply expenses

Wherever there’s a lot of spending, there’s a tremendous opportunity for savings. Look no further than procurement, where supply expenses run anywhere from 5-6% cost of revenue at the average 50+ office dental organization to as high as 10% at organizations with 1-5 offices. 

In order to efficiently manage spend, you need to set budgets that accurately reflect your expenses and drive better decision making. Among other benefits, dental office budgets can help:

  • Implement a purchasing strategy that determines what you can and cannot afford based on your business budget goals.
  • Prevent overspending by setting budget alerts that notify you when a purchase order goes over a certain spending threshold.
  • Gain real-time insights into past and current spend so that you can make better purchasing decisions.
  • Get transparency into your procurement team’s finances and assess their true value creation for your organization.
  • Deliver accurate financial reporting quickly and easily.

For these reasons and more, it’s no surprise that the biggest and fastest growing DSOs are turning to budget controls to help boost their EBITDA through proactive spend management.

Finding the best dental budget software

If you’re looking for a dental office budget solution that helps control overspending while improving visibility, it’s important to know the different best-in-class features that are available.

Central Dashboard for Budget Visibility

Rather than keeping track of lengthy dental practice budget spreadsheets, upgrade to a platform that displays all of your office budgets in one single location. From a centralized budgets dashboard you can access, view, and manage budgets for every dental practice in your organization quickly and conveniently.

Custom Dental Office Budgets

With custom dental office budgets, you can choose how you monitor your dental practice expenses. Set multiple budgets per office, per month, and track spend all the way down to the location, vendor, product, or specialty level. Custom budget features put you in control, giving you the flexibility to design a spend management program that’s tailored to your long-term goals.

Bulk Importing Dental Office Budgets

Say goodbye to bulky office spreadsheets and hello to bulk importing. With dental procurement software, adjusting budgets from month to month has never been easier – just download and import each dental practice budget at the click of a button. 

Improving the dental practice budget experience

Dental practice budget worksheets are time-intensive to maintain, prone to human error, and inefficiently connected to your purchasing activity. An all-in-one dental procurement platform solves this problem with a simple integration between purchasing and budget management, ensuring that no business expense goes missing. As more and more dental organizations look to automated budget controls to rein in rogue spending, they’re finding a winning solution in procurement software that closes the gaps throughout the dental practice budget process.

Interested in learning more about dental budget capabilities with CureMint? Reach out today for a free demo.


How to Boost Your Dental Practice EBITDA with Procurement

Increasing EBITDA for dental organizations through strategic procurement.

EBITDA: Dental Practices & DSOs

For dentists and dental support organizations (DSOs) there is one common tool that both entities use from time to time. Hint: it’s not a sickle probe. 

Whether you operate 1 office as a solo practitioner or manage 50+ practices as a CFO, you need to be able to reliably gauge how your business is doing. EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, is an accounting measure that serves as a proxy to calculate a company’s operating cash flow. 

EBITDA is calculated by taking your total revenue and subtracting all operating expenses (except interest, taxes, depreciation, and amortization). As a “bottom line” number on your income statement, EBITDA is useful for investors since it’s easily calculated and can be compared to other competitors within the dental industry. In fact, EBITDA is the metric on which most businesses in the world are measured – banks, private equity, and financial firms use EBITDA to put a number on a business’s value and analyze it for investment or lending decisions.

Why is EBITDA important for dental practices?

Dentists who are planning an exit or retirement, or those who wish to pass off the operational headaches of their practice and focus solely on clinical, have a significant interest in raising their business’s value prior to a sale. In some cases the difference in payout can be hundreds of thousands, if not millions, of dollars. 

This is where dental support organizations (DSOs) come into the picture. Previously, buyers of dental practices – namely, other dentists – were restricted to as much capital as banks would lend them. According to the dental M&A experts at Tusk Partners, most banks have a lending ceiling of 80-90% of annual revenue. But with the advent of private equity-backed DSOs in the dental industry, it’s now possible to secure additional capital for a deal since private equity groups are not constrained by what a bank would offer the average dentist looking to buy a practice. 

More importantly, private equity groups are measured on EBITDA themselves. They don’t look at a dental practice’s revenue when considering an acquisition – they are focused on the EBITDA and how that number could increase their own EBITDA. Typically DSOs will pay a multiple as high as 4-6x a dental practice’s EBITDA so long as the business acquisition increases the DSO’s collective EBITDA. What this means is that the true value of a dental practice is not simply a percentage of its annual revenue, but often much more. 

How strategic procurement can impact your EBITDA

If you own a dental practice you may be wondering, how can I increase my EBITDA? One proven way to improve your EBITDA is to implement operational processes that drive greater efficiency and cut costs. Procurement, as an operational indicator of performance as well as a cost driver, remains one of the best ways for dental organizations to grow their value.

A recent study from Spend Matters shows that if an organization’s spend on non-payroll expenses is greater than its EBITDA, then a 1% decrease in spend will increase EBITDA by more than 1%. In average cases, a 10% reduction in spend can result in a 20% to 40% improvement in EBITDA. This is because procurement savings go straight to a company’s bottom line, acting as an immediate lever, whereas raising top line revenue requires overhead costs. Every $1 of savings is therefore worth much more than $1 of revenue – for some dental practices, a dollar saved could be worth anywhere from $5 to $20 of increased revenue. 

Strategic procurement offers dental organizations with a tremendous cost savings opportunity. By making sure that purchasers are buying the right supplies from the right vendors at the right price, an end-to-end solution for dental procurement eliminates rogue spending within a dental organization. Connecting your procurement and accounts payable teams with a holistic procure-to-pay software that uses 3-way invoice matching can also deliver savings by preventing wasteful payments for duplicate or erroneous invoices. 

Perhaps most importantly, digitizing your organization’s procurement journey with an end-to-end solution generates robust data that can be intelligently analyzed for cost savings. After all, can you really know how much you’re spending with each vendor when they’re the ones providing your order history? By tracking your supply expenses with spend management software, you can quickly identify spending leaks and create a strategic sourcing plan that cuts costs when it comes time to renegotiate supplier contracts.

Dental procurement software makes a difference

Ultimately, streamlining your procurement process is only one piece of the EBITDA puzzle. There is also staff compensation, insurance, marketing, rent, utilities, and other expenses that make up a group practice’s overhead. Nevertheless, given the cost of revenue spent on raw materials and supplies by dental offices each year, implementing a smarter procurement process is a sure and easy solution to deliver results and boost your EBITDA. See how CureMint streamlines the procurement process while providing data and visibility to facilitate better cash flow management.


A Complete Guide to the Dental Procurement Lifecycle

Learn the ins and outs of dental procurement, and how dental practices of all sizes can benefit from a proactive approach to spend management.

The state of dental procurement in 2021

In their latest Chief Procurement Officer (CPO) Survey, Deloitte’s consulting team referred to 2020 as the “year of the supply chain.” From masks and toilet paper to groceries and other goods, the world’s global supply chains were put to the test last year by the COVID-19 pandemic, battling supply shocks and demand surges in a rapidly changing purchasing environment. 

The dental industry was no exception – dental practices faced significant hurdles as they adapted to a “new normal” of sanitization protocols, protective gear, and scheduling changes. Many offices closed down for a short period, while others dealt with a drastically reduced patient load. Further up the supply chain, dental supply manufacturers and distributors had to deal with production bottlenecks and hazy demand forecasts of their own. Navigating these sudden highs and lows made it more difficult for practices to acquire supplies, and order backlogs and shipping delays were not uncommon in 2020.

Fortunately the future is bright for the dental industry in 2021. Patients are once again filling offices, in part thanks to new features that the pandemic helped bring about, such as online appointment scheduling, and dental organizations can get back to operating their business and meeting revenue goals as usual. However, for dental supply chain managers and procurement officers, there may be no going back to “the way things used to be.” 

As dental organizations recover from the pandemic and set their sights on an increasingly digital future, it has become clear that the dental procurement process must evolve to keep pace with the growing sophistication of the modern dental practice. Now, perhaps more than ever, there is a strong desire among industry professionals to build an agile supply chain environment that is supported by a smarter, more efficient procurement process. 

Your dental supply chain as a competitive advantage

Dental practices run on supplies. From bibs and crowns to composites and brackets, dental practices require a large variety and quantity of supplies in order to deliver the patient care that is critical to their mission. Some of these goods, such as disposable gloves, may be easy to obtain. Others, such as implants or private label products, may require extensive lead time, custom specifications, and close coordination between the manufacturer, distributor, and receiver. 

The goal of supply chain management for dental practices is not only to ensure that doctors have what they need to serve their patients, but also to responsibly manage the costs associated with obtaining supplies. Price creep, misquotes, and overspending are just a few of the challenges that dental supply chain managers must overcome. And in a competitive marketplace, where dental organizations can use their purchasing power to drive down rates and leverage negotiations between vendors, an efficient supply chain is a valuable advantage.

PROCUREMENT VS. PURCHASING

Procurement, and by extension, purchasing, is a significant cost driver for dental organizations as they manage their supply chain. After staffing costs, supply costs are often the highest for an organization. Purchasing fits under the wider umbrella of procurement and is focused solely on placing purchase orders (POs), receiving inventory into stock, and submitting payment to suppliers. Procurement spans the entire buying process, from identifying needs and gathering quotes to selecting vendors and managing contracts. Because purchasing deals with the direct costs for raw materials and products, the procurement process presents a unique opportunity for dental organizations to earn significant savings.

TOTAL COST OF OWNERSHIP

It is also important to consider the total cost of ownership that goes into managing a dental organization’s supply chain. Lead dental assistants may spend up to 20 hours a week scrolling through catalogs, searching for supplies, logging in and out of multiple supplier portals, receiving shipments, and following up with vendors. Procurement managers may spend even more time handling order requests, purchase approvals, and tracking down shipments and payments. Ultimately, some organizations process hundreds of invoices per day – and the more suppliers they buy from, the more invoices that accounts payable (A/P) departments have to spend time managing.

Automating these manual tasks with digital tools and implementing a streamlined procurement solution allows dental organizations to reduce the total cost of ownership, freeing up staff to focus on clinical or other growth-oriented activities. At the practice level, lead dental assistants can look forward to spending less time ordering and more time chairside. At the organization level, procurement managers can speed up purchase approval workflows and spend management tasks while A/P clerks can automate other time-intensive chores. 

INCREASING PROFITABILITY WITH A SMARTER SUPPLY CHAIN

With the rise of dental support organizations (DSOs), profit and loss statements have never been under more pressure to ensure waste and inefficiency are removed from the bottom line. When it comes to improving margins, most dental organizations instinctively turn to their revenue streams – working more hours and treating more patients leads to increased productivity and greater profits, so the thinking goes. 

While this is a tried and true approach to financial growth, there is only so much an organization can do to increase output and drive its bottom line. On the flip side, there are also rising costs and associated expenses to consider. After all, the easiest dollar to make is the one you don’t spend. As Chief Financial Officers (CFOs) and Chief Operations Officers (COOs) look into overhead costs at dental practices, more often than not they are finding tremendous hidden profits in the source-to-pay procurement process. 

Today, digital tools like dental-specific procurement software are transforming the dental industry with modern solutions to outdated processes. Establishing an all-in-one dental procurement ecosystem can help dental organizations cut costs by ensuring each office buys the right thing from the right place at the right time. And with e-procurement tools, DSOs can bring visibility and control to purchasing chaos – increasing formulary acceptance and reducing rogue spending. For these reasons alone, it’s no surprise that one case study found dental procurement software can save a 20-office DSO more than $16,000 per month.

What is the dental procurement lifecycle?

The dental procurement lifecycle is the entire process of finding, negotiating, and contracting with a supplier of dental goods; purchasing and receiving the goods; and submitting final payment for the goods. In other words, dental procurement covers every aspect involved in getting dental supplies from point A (the manufacturer or distributor) to point B (the dental practice). And it’s not just regular dental practices that need supplies – orthodontists, oral surgeons, pediatric dentists, prosthodontists, and endodontists all use dental procurement to get the products and equipment they need to operate their specialties. 

SOURCE

The dental procurement lifecycle begins with the strategic sourcing of goods from vendors. This is the initial planning stage where a dental organization evaluates its inventory needs and determines the right supply partners.

Analyze

Whenever deciding where to source dental supplies from, it is important for the dental organization to first analyze its spend history and current state. This information gives CFOs a better understanding of the organization’s expenses, and helps them identify opportunities to leverage their purchasing power to drive down costs. This process is also the beginning stages of building a formulary, or custom supply catalog. By gaining visibility into where cost savings opportunities exist, the dental organization can then generate a more beneficial Request for Quotation (RFQ) to identify the best partners for their strategy. 

Select

In order to begin the selection process the dental organization will send an RFQ out to bid with every major dental supply distributor in the industry, as well as smaller local distributors and direct manufacturers. The RFQ gathers relevant information, including: product manufacturer, item skus, item descriptions, item category, item subcategory, unit of measure, quantity ordered, and price per product. Once price quotes are returned, the procurement team can start to make an apples-to-apples price comparison between vendors. The organization may also choose to conduct clinical evaluation trials for new supplies. Following the results of the trial, the dental procurement team can map out the potential savings for preferred goods from each supplier and make selections.

Formalize

After a last round of negotiations, the dental organization finishes its sourcing process by signing a written contract to document the scope of the supplier partnership and ensure clarity and accountability. The procurement team should take steps to alert the organization’s offices and clinicians of any impending changes to the supply catalog in order to avoid costly mistakes. Finally, the procurement team consolidates all new products into the proper formularies so that offices can purchase the appropriate items and maintain formulary compliance.

PROCURE

After the dental organization has solidified its supply partners, the next step of the dental procurement lifecycle is to execute a procurement strategy on a daily basis by getting products: 

    • At the right price
    • From the right source 
    • On the right budget
    • In the right quantity
    • For delivery at the right time 
Catalog

First, the procurement team must centralize all supplier relationships so that all of their supplies can be purchased from one platform. Whether there’s one supply catalog used across the whole organization, or several sections of a catalog (formularies), a digital catalog serves as a tool to implement the organization’s purchasing policies by leading purchasers to choose goods from the correct suppliers. In doing so, catalogs help create a “single source of truth” for the organization by allowing all purchasing to take place from a safe and predetermined ecosystem under the dental organization’s full control.

Order

Now that the dental organization’s digital catalog is centralized, purchasers can now log in to one platform and, factoring in key data points such as budgets, preferred product lists and formularies, create streamlined order requisitions with all the necessary items for the practice to run efficiently. For most dental organizations the supply ordering process is usually initiated by the dental assistant and office managers at each location. 

Review/Approve

This is where the organization has the opportunity to proactively review and/or approve any potential roque spend that does not align with their procurement strategy. When the management team receives a purchase requisition, they can choose to either approve, alter, or deny the request as part of the official review and approval process within the organization. (The best solutions will help you automate these decisions by factoring in key criteria tailored to your organization.) If the order is approved, a purchase order (PO) will be created and sent to the supplier. The review and approval process is an important step in the procurement lifecycle as a cost-prevention measure designed to create a proactive spend management culture that eliminates rogue spending. 

Receive

The final step of the Procure phase is to confirm receipt of the order. The dental office receiving the package will confirm receipt and check to make sure that the correct quantity and exact items were delivered according to the original PO. It is important to verify that no items are missing or damaged, and to escalate any shipment issues, as failure to do so can create a costly misalignment between procurement and A/P departments. 

PAY

The third and final stage of the procurement lifecycle is billing and payment for the goods and services that have been sourced and procured. Here, the dental organization aims to create an efficient, visible layer of accountability ensuring accurate billing, payment, and reporting of all expenses. 

Invoice Match

First, the accounts payable (A/P) department tracks and organizes supplier invoices and approves them for payment after validating the invoice matches the approved PO, and that the order was also received at its destination. The best invoice matching process utilizes an automated 3-way invoice match, an accounting control to make sure that the purchase order, inventory packing receipt, and invoice are an exact match. The goal is to reduce the risk of mispayment for duplicate, unauthorized, or inaccurate invoices – limiting costly overspending while also bringing much-needed price transparency across the supply chain. 

Data from APQC’s Open Standards Benchmarking® Accounts Payable survey shows that on average, most organizations report up to 2% of their payments as duplicate or erroneous, costing them tens of thousands of dollars each year. 

Payment

When an invoice is approved, the A/P department will submit payment to the vendor. Each vendor may have different payment terms, and preferred methods of payment which must be managed accordingly. 

Record

Last but not least, the procurement journey ends with the recording of the completed transaction marked with the proper general ledger (GL) code, speciality code, and other important information that allows for a seamless integration to the dental organization’s financial system.

Benefits of streamlining the dental procurement process

As the dental industry continues the trend toward the consolidation of operational processes, there are rising expectations across the industry of increased operational margins. An area that is often overlooked is the dental source-to-pay procurement process. Many dental organizations are stuck using inefficient processes dependent on spreadsheets and manual data entry for approvals, forms, paper catalogs, numerous vendor ecommerce portals, paper and emailed invoices, and snail mail to process and pay for thousands of orders. Implementing a holistic dental software solution can help alleviate these issues and bring a tremendous boost to an organization’s productivity with much-improved visibility, efficiency, and control over its supply chain.

1.)  Visibility

An effective dental procurement strategy starts with establishing one environment where all procurement activity takes place. Every office, user, and purchase order exists within a controlled procurement ecosystem, giving the dental organization a “single source of truth” to store and manage all company procurement knowledge. This data and visibility empowers dental organizations to make intelligent decisions and plan toward mitigating supply costs, while also facilitating proactive spend management and inventory practices. 

TRANSPARENCY INTO ORDER VOLUME AND HISTORY

One of the greatest benefits to be gained from an end-to-end procurement ecosystem is the visibility, storage, and management of order data. By implementing a source-to-pay platform across the organization, order data can be quickly accessed from anywhere and for spend across all vendors in a single, centralized location. Procurement teams can view order volume, and budgeting insights in real-time, creating an accurate and proactive spend culture across their organization. This transparency also carries over into order history – while most dental organizations depend on their suppliers to provide them with their spend history, which creates a conflict of interest when negotiating new terms, e-procurement provides an environment under the organization’s full control. Thanks to dental procurement software, it’s easy to view and export an organization’s complete order history at the click of a button.

TRACEABILITY FOR REPORTING AND AUDITING 

It can be hard to keep track of received orders with just a few offices, but as dental organizations scale, it becomes a significant challenge for an entire enterprise with hundreds of locations and thousands of invoices, purchase requisitions, and contracts. In the modern era of e-commerce where shoppers can monitor their online purchase activity at any time, there is no reason why dental organizations should not be able to enjoy the same capabilities across all suppliers. Dental procurement software provides full traceability for every order placed by every office within an organization. And with receive and reconciliation features in place, a holistic source-to-pay solution delivers added visibility in the reporting and auditing process, helping both procurement and finance leaders easily confirm what has arrived, when, where, and at what price.

2.)  Efficiency

Inefficiencies cost dental organizations money in two main ways. The first being increased time to execute a given process, and the second being the opportunity cost when the best process is not executed properly due to the inherent human errors that come with manual work. Streamlining the various aspects of the source-to-pay process into a single solution can help dental organizations improve inefficiencies by reducing the time it takes to execute procurement actions; erasing department bottlenecks and blindspots; and limiting human error through the automation of manual workflows.

AUTOMATING TRANSACTIONAL CHORES AND MANUAL PROCESSING

Dental organizations can quickly improve their source-to-pay process and drastically reduce operational costs by implementing an integrated solution that automates manual tasks with software. 

    • Source – A holistic suite of e-procurement tools helps managers speed up activities like spend analysis and vendor catalog onboarding by automating time-intensive chores. E-procurement allows dental organizations to automatically track vendor spend, down to every dollar, rather than relying on complicated spreadsheets with manual inputs.
    • Procure – Purchasers will earn significant time savings by ordering from a single online platform rather than navigating different vendor workflows and purchasing experiences. Procurement managers can speed up the onerous process of review and approval workflows by using automated order rules, resulting in significantly lower operational costs.
    • Pay – Verifying invoice matches and making payments has never been easier with one software to connect procurement and A/P teams. Adopting a single platform across the organization to submit, approve, and pay for purchases helps remove costly departmental bottlenecks and silos.  
SIMPLIFYING THE PURCHASING PROCESS

Supply purchasing proves to be one of the most cumbersome, time-consuming tasks for office managers. Rather than catching up to the modern expectations of enterprise procurement, purchasing remains a significant source of stress and frustration for staff at the practice-level as they deal with manual, redundant, antiquated processes. It is not uncommon for office managers and lead dental assistants to fill out purchase orders by hand or spend hours managing an office spreadsheet. 

Automating these mundane tasks with e-procurement software is one of the easiest and most effective ways to improve an organization’s operational capacity. Whether a dental office orders supplies every 2 weeks or every 2 days, by integrating its formularies into a centralized solution, DSOs can ease the burden on staff searching for the right products at the right price. It’s no wonder why DSOs are able to reduce their staff’s supply ordering time by as much as 76% with dental procurement software – resulting in massive payroll savings and freeing up practitioners and support staff to focus on patient care.

CONSOLIDATING WORKFLOWS INTO ONE EASY SOLUTION

While some dental organizations try to scratch together multiple isolated solutions, a holistic source-to-pay system efficiently consolidates workflows for the sourcing, procurement, and payment of supplies into one simple solution. An organization relying on separate systems opens up its procurement process to greater opportunity for human error, and cross-departmental activities such as invoice matching, order processing, and purchase approvals can take much more time than necessary. Instead, using an all-in-one dental procurement software provides a smoother experience – reducing time spent on procurement for all employees across the supply chain. Purchasers no longer need to juggle convoluted ordering flows and administrators can quickly view and analyze data from across the procurement lifecycle as the organization achieves optimal efficiency.

3.)  Control 

Establishing an end-to-end procurement ecosystem not only brings visibility and efficiency to an organization’s source-to-pay lifecycle, it also gives dental organizations the tools they need to take control over rogue spending. 

REAL-TIME SPEND ANALYSIS

A proactive approach to spend management starts with knowing what an organization’s order volume is at any moment. With a centralized and digital procurement environment, supply managers can get a real-time spend analysis at the touch of a button, viewing custom dashboards and downloading spend reports based on vendor, office, region, product, and more. The days of dissecting complex office spreadsheets are being replaced by enterprise technology designed to give dental procurement teams the control and customization they need to make fast and accurate decisions. And as historic order data turns into predictive buying signals, an organization can better equip for the ups and downs of its order flow without overspending.

ORDER RULES & APPROVAL WORKFLOWS

As DSOs grow in scale and incorporate new practices, each with their own inventory needs, it becomes progressively more difficult to manage purchase requisitions with budget goals. The ability for procurement managers to monitor and react to spending activity in real-time is a valuable edge, turning an organization’s supply process into a competitive advantage. E-procurement technology can give dental organizations this ability with a suite of automated tools for proactive spend management, including: 

    • Setting minimum and maximum budget alerts
    • Creating order rules and workflows for who orders what
    • Automatically approving/denying purchase orders
    • Enabling or disabling user permissions
    • Notifying the right person for event triggers such as broken rules, order volume, etc.

Automated PO review and approval workflows can be tailored to any organization’s procurement process, bringing a healthy mix of freedom and control that empowers procurement leaders to design a spend management environment conducive to their organizational goals.

What size does my practice need to be to start considering dental procurement solutions?

The benefits of an all-in-one procurement solution can be realized at any level of organization, regardless of how many dental offices you are operating or what your order volume is. Most dental practices spend anywhere from 5-8% of their revenue on clinical procurement. However, with an effective dental procurement system in place, many DSOs are able to reduce this cost to 3% of revenue or less, not including the total cost of ownership.

dental_supply_expenses_cost_of_revenue
SCALABILITY

For dentists and dental specialists who wish to pursue an exit, implementing e-procurement software can help increase your valuation. Standardized and structured operational processes, especially for cost drivers such as procurement, can indicate how scalable a practice is, possibly warranting a higher valuation. More importantly, a structured approach to purchasing behavior produces data, which can be captured in one centralized system. With all the organization’s data in one place, the true savings of each supplier, and the KPIs that make each office run more efficiently, are easily quantifiable – an attractive proposition for investors. 

Regardless of the size of a dental organization, a digital procurement platform helps provide a wealth of benefits. Dental procurement software makes it easier for DSOs to onboard new practices efficiently, while maintaining purchasing standards and alleviating any integration pain points for the doctor or staff whose practice is being acquired. And as more and more dental practices look to join together under a DSO structure, having a predictable and duplicative process for sourcing, procuring, and paying is a proven way to get the most out of your supply chain and stay competitive in an ever changing landscape of buyers and suppliers.

Finding the best procurement software for your dental organization

According to a recent survey, 22% of dentists are seeing new opportunities that have emerged because of the pandemic. As businesses delve deeper into technology, analytics, and automation, enterprise procurement software is only getting stronger. And with dental-specific procurement software designed to meet the needs of DSOs, there’s never been a better time to take your dental organization to the next level.

CureMint is the leading provider of dental procurement technology helping dental organizations scale across North America. With a holistic approach to procurement and an intuitive platform optimized for dental practices, CureMint helps dental organizations increase spend visibility, automate workflows, and gain better operational efficiency. Learn how CureMint can cut costs and streamline procurement for your organization today. 


Triangle Tweeners

CureMint Lands on the Rapidly Growing Triangle Tweeners List

CureMint Lands on the Rapidly Growing Triangle Tweeners List

Triangle Tweeners

The sixth annual Triangle Tweeners List just dropped. It’s the who’s who of the up-and-comers in the Triangle area of North Carolina. Over the years the list has grown to now represent 230 local area startups.

This year (well it’s the 2020 list released in 2021) CureMint made the cut having raised their seed round from CoFounders Capital back in early 2020 just as the pandemic hit.

This is a great honor and just another point of validation for relocating CureMint from Los Angeles to the thriving Triangle area. “We feel surrounded by kindred spirits striving towards disruptive greatness each in our own verticals and in our own way.”

The startup community in the Triangle is amazing. And it’s all thanks to local leaders like Scot Wingo, the brainchild behind the Triangle Tweeners List. This is Scot’s passion project and one of many ways he gives back to the local community. Thanks Scot!


Recruit Rockstars Logo

Recruit Rockstars Podcast: Why VCs Drilled into the Dental Market

Join author and recruiting extraordinaire, Jeff Hyman, as he interviews Co-founder and CEO, Brandon McCarty on how he attracts top talent.

Brandon and Chris
Brandon McCarty (on left) with Co-founder Chris Rathgeb (on right)

Jeff Hyman knows the recruiting world inside and out. He launched the Recruit Rockstars site (and a book with the same name) to help scale PE & VC companies with top talent.

Learn how Brandon launched the company and moved it from Los Angeles to the booming Triangle area of North Carolina. Find out values are important to him and how vision plays a key role in attracting top talent especially in the early days of a startup.

McCarty shares his views on distributed teams or virtual offices and the challenges they pose and how setting a strong foundation makes a difference.


The Unicorn Finders

Unicorn Finders Podcast: From Cannabis to CureMint with Chris Rathgeb CTO and Co-Founder

Join the team from Unicorn Finders peel back the layers of how CTO, Chris Rathgeb, thinks about technology and hiring developers.

Successful startups have a diversity of talent at its foundation. Co-Founder and CTO, Chris Rathgeb’s journey reinforces this notion. Join the Unicorn Finders team in this light-hearted discussion around technology and software development.

Learn how Chris went from getting his first computer at age 10 to his addiction with the game EverQuest fueling his curiosity to learn how to hack and reverse engineer games in his teenage years which led to the creation of his first business at 15.

By the college years, his undergrad and Masters in Computer Science led him to work for one of the labs for the Department of Energy specifically on the cyberwarfare team helping them reverse engineer malware.

Listen closely to discover whether or not Chris is the founder of Bitcoin – sorry no spoilers!

Next Satoshi, I mean, Chris embarked on the path of app development. During this period, he launched multiple businesses some successful, some not so successful.

Eventually, a friend introduced him to the world of cannabis, another high point in his life. But only because he got to help build the technology around this rapidly growing market.

It was years later when he was obsessed with the idea of building a company that was product-led with the customer and the problem to solve at the forefront that he happened to meet his co-founder, Brandon McCarty who just so happened to be solving the dental procurement problem with same approach in mind. This synchronous meeting led to the birth of CureMint as it exists today.


Interview: How To Increase Your Dental Organization's Evaluation

An Interview with Matt Wilkins, Owner/Principle of Large Practice Sales

To kick off 2021, we interviewed Matt Wilkins, Owner/Principle of Large Practice Sales (LPS). LPS helps dental organizations and doctors achieve higher evaluations and connect with the right partners for future acquisition initiatives. 

With CureMint’s mission being to help dental organizations scale across North America, naturally, we wanted to hop on the phone with Matt and discuss acquisition strategies and the best way to increase an evaluation in 2021. 

Here’s what he had to say! 

CureMint: Tell us a little bit about your background.

Matt: I don’t really have a typical background. In school, I received a master’s in accounting, then decided to go to law school. However, I never really wanted to be an accountant or lawyer. My theory was to know the numbers and rules of business and give myself a healthier chance of being successful in the field. I’ve started and run multiple companies, from e-commerce retail to running a DSO. Currently, I help dentists and dental specialists find capital partners to help them grow and expand their empire and assist doctors in developing an exit strategy that aligns with their wants and goals.

 

CureMint: Describe a dental organization that might be prime for a valuation. (number of offices, revenue, operational infrastructure)

Matt: Truthfully, there is no one-size-fits-all answer to your question. The perfect office, or group of offices, looking for a valuation depends more on the doctor/management goals vs. where they are in their business cycle (meaning it’s not just about retirement). I believe the prime candidates are twofold: Doctors looking to plan an exit strategy long before their actual exit, OR doctors who have a great business plan or vision and want help executing those visions (i.e., capital resources to achieve that vision). 

 

CureMint: Describe exactly what investors are looking for. What attributes are attractive for an investor — how do they get a higher valuation?

Matt: Investors are looking for a consistent return and scalable growth. They are also looking for doctors who are easy to work with. What I mean by being “easy to work with” isn’t that they take direction well or are willing to submit to unwanted change, but instead are open to a collaborative approach on how to run their business. One of the hard-to-quantify things that makes a company more attractive is how scalable the organization actually is, from clinical, procurement, marketing, accounting, and HR standard operating procedures. Basically, standardization and structured operational processes, especially cost drivers, indicate how scalable a practice is, thus warranting a potential higher valuation.

 

CureMint: How long does a valuation take?

Matt: This question depends on the doctor or organization we are working with, but we target two weeks. Once we have the data we need, we can give a valuation and possible structures for a potential transaction.

 

CureMint: Are there steps a dental organization can take during the valuation process to bump up their final numbers?

Matt: Specifically, in the valuation process, likely not. Often, doctors look for ways to increase EBITDA, resulting in a higher valuation, but they make cuts detrimental to their overall business. Whereas proper procedural and operational processes, such as supply chain management, should already produce lean expense variables. However, finding a capital partner involves more than just a valuation. The method of finding the right partner can sometimes take six months to a year. During that time, we are continually working with our clients to help them make moves to increase the margins of the business while providing analytical data for all potential partners to look at. This includes refining reports out of accounting or practice management software to offer industry-wide metrics they can benchmark their practice and even recommend new products or services that we believe could benefit the business.

 

CureMint: How does technology play a role in evaluating a dental organization?

Matt: In what we do for our clients, technology most often helps us access data and analytics. You wouldn’t believe how hard it is to figure out answers to diligence questions partners may have with the current technology and software available in the dental space. On a more subjective level, in my opinion, tech — when used appropriately — often helps bridge the gap between the doctor’s vision and executing that vision.

As it pertains to the valuation, I think technology can play a crucial role in answering scalability questions, which is one of the most critical drivers of a practice valuation after profitability. Private equity groups and invisible DSOs aren’t looking for the great practice that will stay the same forever; they are looking for a business that they can help take the organization to the next level. What’s better is if that business has ideas or practices that would help other practices in the group.

 

CureMint: How do you measure technology’s impact on a valuation? 

Matt: To be honest, it’s really tough. The solutions technology provides don’t always directly correlate to some specific financial metric that an analyst or DSO may be looking for. However, one of the most important things — and where I think LPS stands out from our competitors — is that the story you present or pitch to potential partners is often the difference between an extraordinary value and a traditional value. Our process adds real value! There are many successful practices in the dental space… so how do you set yourself and your practice apart from other practices? I think technology can play a crucial role here. While it may be tough to give a direct numerical impact to valuation if you have two business and both have substantially the same P&L, but through the use of technology, one has fewer employees, more access to data to make business decisions, and is all-around a more efficient enterprise, I can assure you: Not only is it worth more; there will be many more interested bidders for the practice.

The single most significant thing you can do that can drive up the practice’s value is to have a business that attracts more bidders. I think technology can play a crucial role in establishing this “attractiveness.”

 

CureMint: Can you give us an example of a valuation/acquisition gone right/wrong?

Matt: I’m going to provide you with two examples that may surprise you.

Conducive acquisitions are about picking the right partner. Probably one of my happiest clients to date is in an extremely rural area in the US. The doctor felt like he was alone in his practice and felt like he couldn’t grow to his potential, given his area of operation. We helped him find a geographically agnostic partner. He sold 60% of his business and retained 40%. His new partner helped him supercharge his growth, and now they have four locations. The cool thing is, his 40% retained equity is worth vastly more than 100% of his original practice. On the flip side, one of the worst acquisitions I have ever been a part of was a doctor who had a few specialty practices and somewhat of a checkered background that he attempted to hide from everyone in the process. We helped this doctor find not only one, but two great partners. Unfortunately, during the thorough background check that is a standard process, it became evident that the doctor lied about his past and attempted to conceal it. So, while we were able to achieve a tremendous initial valuation, the diligence process crushed any hope this doctor ever had of doing a deal.

For whatever reason, this industry tends to be quite secretive, and I’ve learned that transparency tends to be a much better tactic for a seamless valuation/acquisition!

 

CureMint: Describe how CureMint can help increase your valuation.

Matt: I want to answer this question in two parts.

Suppose you are a larger organization or group practice. In that case, CureMint can streamline your purchasing process and allow you to access analytics that is typically exceedingly difficult to obtain, if not impossible. The data and visibility CureMint offers empowers group practices to make cognitive decisions and action plans towards mitigating their supply costs; while simultaneously facilitating better cash flow management. CureMint can also prevent an ordering assistant, in most cases in each office, spending 50% of their time scrolling through catalogs searching for supplies or logging in and out of multiple supplier ordering portals.

Perhaps one of the most compelling arguments for a fast-growing group is that CureMint allows you to onboard practices more efficiently and better than any other solution I have seen as it pertains to the purchasing process. Enabling you to alleviate an integration pain point for the doctor and staff you are looking to acquire. On the opposing side, if you are a small group, one doctor, or fewer offices, you might think you don’t need the data or analytics that CureMint can provide. This is where CureMint’s GPO partner, SourceClub, really shines through. SourceClub provides small practices the same, and in most cases, better purchasing power than larger DSO’s receive. SourceClub offers additional value by eliminating the need for a smaller organization to spend the energy and time negotiating their own pricing with suppliers. Typically, smaller organizations don’t have the buying power or economies of scale to drive substantial supply costs reductions. I’ve been really impressed with the CureMint product, the team behind it, and the executive level experience that their GOP leadership has. I’m quite confident that if utilized fully, CureMint can help any dental organization out there.

To learn more about LPS visit their website at https://www.largepracticesales.com/


Step 9: How To Rinse, Repeat, & Save in the Future

At CureMint, we’re committed to driving down costs as we help your dental  organization reshape its supply procurement strategy. In this blog series, we’ll guide you through nine easy steps to drive down your dental supply expenses so you can better manage your finances and become more profitable in the dental industry.

Well, friends — we’re friends by this point, right? — we’ve been through a lot together. Remember when you were so intimidated by the prospect of negotiating with vendors for better prices on your dental supplies? You were so green then. Now, you’re a seasoned veteran. You’ve seen it all.

So you’re evermore prepared to do it all again.

Continued vigilance on angling for the best deals is the best and arguably only way you’ll continue saving on supply costs for your dental organization. We know it’s a relatively simple yet involved process, but the time and effort spent in the undertaking yields a high return on investment.

STEP NINE: RINSE & REPEAT

As a handy reminder, here’s a recap of what exactly those first steps entail.

  • Step 1: Organize & Formulize
    Collect the last 12 months of your supply spend into a spreadsheet. Request your order history from your primary dental-supply distributors and suppliers, then organize them by relevant product information (name, manufacturer, SKU, price, etc.) to create your starter formulary.
  • Step 2: Request for Quotation (RFQ)
    Send your RFQs to all the major distributors in the dental industry and smaller local suppliers you might like to work with in the future. Once all your RFQs have returned, enter that data alongside your starter formulary.
  • Step 3: Start Negotiations
    Calculate price-per-each for every product, focusing on one category at a time. Formally reach out to your top choice of vendors with a courteous but direct message about lowering prices. Then, contact your other partners and see how competitively they can price their products.
  • Step 4: Review All the Data
    Enter results of negotiations into your master spreadsheet. Compare the best deals and lowest prices with the side perks and other services offered by all vendors.
  • Step 5: Conduct Clinical Evaluation Trials
    Recruit a Clinical Evaluation Team (CET) from your dental offices’ organizational leaders in the clinical staff. Obtain samples of products in consideration for consolidation, then ask your CET to review each product with a simple rating system.
  • Step 6: Evaluate Trial Results
    After collecting results from CETs, calculate each product’s average score. If a product’s trial scores cross your threshold, you should keep them in mind for consolidation into your primary formulary.
  • Step 7: Finalize Supply Consolidation
    Isolate winners of clinical evaluation trials and keep them on your Primary Formulary while moving other products to your Secondary Formulary. Then, communicate often with your clinical staff about any upcoming changes to your office supply lists.
  • Step 8: Track & Manage Compliance with CureMint
    Set systems to encourage formulary compliance with the aim of maintaining savings on supply costs. See how each office in your dental organization spends its supply budget with CureMint, procurement-system software specifically designed for the dental industry.
  • Step 9: Rinse & Repeat
    Whoa, this is getting meta.

If you want to maximize your supply savings, continue the nine steps for every category and subcategory within your formulary. Depending on your number of locations, size of your formulary, and participating CET members, this consolidation should take you anywhere from 6-18 months to complete — no rest for the weary! 

Indeed, this nine-step process is meant to be repeated year after year. Products, distributors, and manufacturers change every year, if not every month. This requires your organization to continually stay on top of the changing dental supply chain market. Whether it’s new products entering the market or old manufacturers looking for better market share, by following the steps we’ve outlined in this blog series, you’ll always be able to extract the absolute highest value from your supply expenses.


Step 8: How To Track Spending & Manage Formulary Compliance

At CureMint, we’re committed to driving down costs as we help your dental  organization reshape its supply procurement strategy. In this blog series, we’ll guide you through nine easy steps to drive down your dental supply expenses so you can better manage your finances and become more profitable in the dental industry.

The heavy lifting of our nine-step process may have concluded, but as we said in Step 7, your work has just begun. Sure, you’ve laid the groundwork for big-time savings on your dental organization’s supply costs, but now, you’re sending your new formulary out into the world — in other words, into the hands of your staff. What good is all the work you’ve done if no one follows the new standards?

In this penultimate portion of our nine-step process, we’ll teach you how to easily track and manage your supply expenses so that your hard work will not have been in vain. 

STEP 8: TRACK & MANAGE COMPLIANCE WITH CUREMINT

Each office in your dental organization must follow your formulary guidelines and purchase the products approved by your clinical trials in order to appropriately realize savings driven by your negotiations and consolidations. Compliance may be low at first, but don’t let that discourage you. But simply informing clinical staff that a product has been moved off the Primary Formulary won’t have much of an effect on ordering habits. Of course, we have a few tips to improve and ensure compliance with the new formulary.

You need to be able to evaluate an office’s supply orders and confront them when staff strays from the formulary, but you also want to grant some autonomy for unusual, one-off products, or special products for certain staff members. One very helpful tip for striking this balance is to establish formulary adherence rules. These rules may be fluid for each organization, or even among general dentists and specialists.

Perhaps the most common rule we’ve witnessed is what we’ll call the “85-10-5” Rule: 85% of an office’s supply expenses can be allocated to the Primary Formulary, while 10% may be allocated to the Secondary Formulary and 5% may be allowed for off-formulary purchases when the need arises. Some organizations exclude the 5% off-formulary spending, whereas other offices like to give their doctors more than 15% supply autonomy. Regardless of exactly where you might land with your proportions, it’s an easy rule to remember and provides ample leeway for discretionary spending.

Another way to establish clinical compliance among your offices is to enact a “carrot-and-stick” approach for financial responsibility. For a “carrot” example, organizations could reward doctors with monthly bonuses equal to, say, 50% of the difference between their budgeted supply expenses and actual expenses. If you wanted to implement a “stick” when and if an office overspends, you could say that doctors are financially responsible for any off-formulary purchases over 5%, or 50% of any secondary formulary purchases over 10%. Of course, you should come up with your own “carrot-and-stick” model that best fits your company’s culture and staff.

At this point, you ask, “How can you track and manage spending?” You could track formulary compliance and spend through our old friend, the Excel spreadsheet, but that’s very difficult to maintain. We recommend a holistic dental procurement software — namely, CureMint.

CureMint is an intuitive procurement software built specifically for dental organizations. CureMint allows you to digitize all of your suppliers, products, and pricing on your own personal Amazon of an online catalog, all conveniently segmented into an unlimited number of formularies. These functions provide you with the ability to track key data points, such as what percentage an office is ordering from which formulary, as well as build custom approval workflows to proactively bring to your attention any offices straying from the formulary plan. CureMint makes it easy to change and consolidate products on specific formularies, so when offices go to order supplies in the tool, the formularies appropriately match the trials and consolidations performed thus far. Not only can you more easily track compliance; it’s just simpler for your offices to order in a compliant manner with CureMint.

With your compliance guidelines and CureMint in place, you might be thinking, “Finally! My work here is done!” But you can’t wash your hands of responsibility just yet. Cutting supply costs requires constant vigilance to always find the best deals… but we’ll save that for our last installment.

Keep a lookout for Part Nine: Rinse, Repeat, & Save in the Future

Can’t wait for the next blog? We don’t blame you! Download the full guide to get immediate access to our last Step.


Step 7: How To Consolidate & Finalize Your Formularies

At CureMint, we’re committed to driving down costs as we help your dental  organization reshape its supply procurement strategy. In this blog series, we’ll guide you through nine easy steps to drive down your dental supply expenses so you can better manage your finances and become more profitable in the dental industry.

Clinical trials have concluded. Your CETs have approved products, and the trial results have been analyzed. You’ve solved any possible pricing irregularities and determined the best compromises between product quality and price. Now, it’s time to separate the wheat from the chaff.

Dental tools on a dentist’s chair with white background

In this part of our nine-step process, we’ll combine the results of trials, price comparisons, and negotiations to finalize your choices for the best supplies at the best price for your dental organization. There may be some bumps in the road as we enter the home stretch of our nine-part process. However, if you have taken ample time for clinical trials, smartly selected the best products, and given your staff plenty of notice, you’ll smooth out any issues your team may experience and start saving money.

STEP SEVEN: FINALIZE SUPPLY CONSOLIDATION

After completing Step 6, you’ll have a list of the highest-scoring supplies from clinical trials. You’ll want to isolate these winners and keep them on your Primary Formulary. Spending off your Primary Formulary will form the majority of your dental organization’s budget, so reserve spots on this formulary for the most-essential supplies which everyone uses. Vendors you’ve consolidated to will likely also be on the Primary Formulary.

Any other products your organization will keep ordering will now be placed on a Secondary Formulary, set up in the same format as your primary. Once you’ve finalized consolidation, you will remove all other products in each category from the Primary Formulary and place them on the Secondary Formulary, leaving each trial-approved product on the Primary Formulary. The Secondary Formulary will be for any particular supplies that certain staff members just can’t live without or specialty supplies your office rarely orders.

Tell your clinical staff of upcoming changes to your office supply lists immediately after you’ve reached final choices for the Primary Formulary. It’s best to notify doctors, dental assistants, hygienists, and any other relevant staff members as soon as possible so they can prepare for changes. In fact, a good standard to live by at this stage is over-communication.

We’re going to take a second to underscore over-communication during this step. Ensuring everyone on staff is crystal-clear on supply changes will ensure closer compliance with the new formularies, so you should have a strong communication strategy in place. One hard-and-fast rule we like to apply in this stage is, “Third time’s a charm” — in other words, notify your offices on three separate occasions before completely overhauling the formulary. The first notification should proclaim the winners of the CET trials, scores, product information, where to order the products, and which products will be moved to the Secondary Formulary. Secondly, drop a friendly reminder that the change is imminent; a week before is a good benchmark. Finally, the day before implementation, remind your staff once more of the changes in the formulary. If you only drop one or even just two notices of supply changes, you run a high chance of confusion — if not outright animosity — over the changes. And the last thing you need is a team of furious dentists on your case. However, you shouldn’t have much trouble if you’ve been open and upfront about the formulary changes and given plenty of notice for the final consolidation.

With this step complete, you might think you can coast to victory. Well, sorry to break it to you, but your work has just begun. In our next installment, we’ll be going over how to track and manage your formulary saving so all your hard work will not be in vain!

Keep a lookout for Part Eight: Tracking Spending & Managing Formulary Compliance

Can’t wait for the next blog? We don’t blame you! Download the full guide to get immediate access to Step 8.