Strategic Growth and Operational Strengthening

Overview

In 2022, the practice began preparing for a significant facility expansion, which would increase capacity and allow for further growth. Our team partnered with the practice during this two-year period, helping them scale their marketing efforts and implement operational changes in anticipation of the expansion. By 2024, after the expansion was completed, the practice saw significant improvements in profitability and efficiency, while strategically reducing their marketing spend as the expansion goals were achieved.

Initial Situation (2022-2023)

In 2022, the practice was gearing up for a major facility expansion. While revenues were strong, several operational and financial challenges had to be addressed to ensure long-term success:

1. Increasing Marketing Spend: In preparation for the upcoming expansion, marketing spend increased from 9% of collections in 2022 to 8% in 2023. This investment was necessary to support the practice's growing capacity needs.

2. Operational Challenges: The practice was still overly reliant on one provider, making it difficult to meet the increasing patient demand. Additionally, operating costs remained high, and there was a lack of structured leadership within the practice.

Strategic Shifts

To help the practice navigate these challenges, we provided the following strategic guidance:

1. Marketing Ramp-Up for Expansion: We advised the practice to ramp up marketing efforts in 2022 and 2023 to drive patient demand ahead of the expansion. This ensured that as the practice's capacity increased with the new facility, the patient base would be primed to fill the additional operatories.
2. Onboarding an Operations Director: We guided the practice through the process of hiring an Operations Director. This new leadership role helped streamline day-to-day operations, reduce inefficiencies, and improve team accountability, allowing the lead provider to focus more on patient care.
3. Implementation of Business Scorecards: We introduced business scorecards to track key performance indicators (KPIs) such as patient cancellations, treatment acceptance rates, and operational efficiency. These scorecards provided clear insights into the practice’s performance, helping leadership make data-driven decisions during the ramp-up phase.

Results in 2024

By 2024, the practice had successfully completed its facility expansion, and the results of the strategic initiatives were clear:

1. Reduced Marketing Spend: Following the expansion, marketing spend decreased to 4% of collections in 2024, down from its peak during the preparation phase. With the increased capacity now in place, the practice no longer needed to invest as heavily in attracting new patients, focusing instead on maintaining a steady flow of higher-value cases.

2. Improved Operational Efficiency: The addition of an Operations Director and the use of business scorecards significantly improved the efficiency of daily operations. This resulted in fewer patient cancellations, improved team productivity, and better patient flow throughout the practice.
3. Increased EBITDA: With the operational improvements and cost management strategies, average monthly EBITDA in 2024 saw a significant rise of 72.1%, reaching $97,453, up from $56,619 in 2023.

4. Increased Collections: The practice’s average monthly collections increased steadily from $214,745 in 2022 to $269,686.60 in 2024, showcasing the effectiveness of the expansion and strategic guidance.

Conclusion

Our strategic partnership with this practice from 2022 to 2024 helped them navigate a critical growth phase. Through increased marketing investment, the onboarding of an Operations Director, and the use of business scorecards, we were able to ensure that the practice was fully prepared for their facility expansion. By 2024, they had reduced their marketing spend, improved operational efficiency, and reached record levels of profitability. This strategic growth laid a strong foundation for the practice’s long-term success.