Read time: 4 minutes.

At a glance:

• Quote:

• Picture

• What I’ve Learned

• Business Idea

What I Learned:

Chris Bentson, of Bentson and Copple, has an interesting slide in his orthodontic business presentations.

The slide displays an orthodontic Profit and Loss (P&L) statement over the last few decades. The four categories of expenses in an orthodontic practice (staff, supplies, marketing, admin, and occupancy) have historically hovered around 50%- 60%.

His insight—and his bet for the future—is that technology will become efficient and advanced enough to reduce the need for human labor by way of supply and lab expenses.

While this pattern has undoubtedly become commonplace in orthodontic practices, it’s not the only one.

An orthodontic P&L will show you where and how a practice spends money.

…and that can tell you a story.

This week, I learned that while most orthodontic practices fall into Chris’ pattern, other P&L’s tell a different story. And worse, many don’t look at their P&L’s - they leave it to their accountant.

So we thought we’d teach five common P&L’s, and our story behind each:

The 5 P&L Stories:

The Normal:

• The practice will follow the norms of the early 2000s

• A balanced team with bread-and-butter appliances

• The building size and marketing spend are precisely what you’d expect.

The High Tech:

• The practice is an all-digital practice with the latest appliances and technology.

• A small, but efficient team is getting the bulk of the work done. Culture is important.

• The marketing is also part of the appliance fees and technology experience.

The One Man Machine:

• There are just one or two employees.

• The orthodontist is so efficient that two employees can run a $2m practice.

• They could operate out of the back of their car if needed—chair time and space are at a premium.

The We’re Learning Our Way

• The awful transition from analog to digital—not quite efficient in reducing chair time, but not ready to stop hiring.

• Cash flow could be better. Way better.

• All the marketing is being reserved for this future all-digital practice.

The Factory:

• This place can see 300 patients a day with 50 team members.

• The schedule is as rigid as a 1997 Hawley retainer.

• You better show up on time, or you’ll be visiting at the next available appointment…in eight weeks.

The Let’s Party:

• Everything that comes with an average P&L but..

• Marketing, admin, and team expenditure is off the rails!

• Hosts the best patient-appreciation parties known to man.