Introduction
Scenario Overview: Imagine Apple Family Dental, a fictional dental office franchise facing operational challenges. This hypothetical scenario explores how Zermatt Business Services could transform their operations and patient experience.
Challenges: The franchise grew revenue by 30% YOY, but maintained the same nominal net income. The owner, Anthony, believed that wage and supplies inflation were to blame, but wasn’t sure how to address these issues in a targeted manner.
Initial Data Collection
Collect Data: Anthony had a basic understanding of his data thanks to his QuickBooks dashboard, but was unsure how to pull the right information to narrow in on any issues. We connected to his QBO data to generate some easily digestible reports.
Initial Assessment: A quick look at our high-level financial scorecard revealed some trends that told us where to focus our attention. Expenses were up 37% YOY, leading to a falling profitability ratio, despite the growth in revenue. Additionally, these expenses fluctuated massively from month to month, creating an inconsistent income for Anthony.
Detailed Data Analysis
Financial Data: We reviewed all financial data, but wanted to emphasize our Expense Account Analysis. The most notable increases were observed in the costs of dental supplies, associate salary, and contract labor. This prompted further investigation into these categories, and how they manifest themselves in the day to day operations.
Operational Review
Dental Supplies: Based on the large change in the dental supplies category, we wanted to investigate the pricing and inventory of these supplies. However, the company’s existing process was dependent on one administrative employee creating an order each week based on subjective observation.
We also reviewed existing contracts with suppliers and determined that there was significant opportunity here.
Now that we had a full view of the numbers, we needed to contextualize them and understand how they got here.
We dug further into why they struggled to find a permanent associate. Between their tedious daily workflows, unstructured processes, and unclear role responsibilities, they were scaring their associates away. Hygienists didn’t understand which responsibilities fell to them and the associates felt obligated to fill in the gaps.
Payroll Costs: After scanning through Anthony’s payroll costs, we wanted to better understand the underlying reason for the elevated associate salary and contract wages. Apple Family Dental needed to increase their wages in order to compete in the labor market, and seemed to be scrambling to find a permanent associate. They paid four different associates this year, and were willing to pay higher than usual rates as they felt they couldn’t keep up with their patient volume without the role filled.