[H1] Equity Lift
[H2] Small revenue gains. Large valuation gains.
I help dental practices find and capture the revenue they are already positioned to earn but aren’t earning — what I call the low-hanging fruit. It is the most profitable revenue a practice will ever generate, and almost every practice has more of it than its owners realize.
The reason comes down to how the math of a practice actually works. Every dollar of revenue gives up a share to variable costs — lab, dental supplies, associate compensation — and early in the month what remains is largely absorbed by fixed overhead: rent, staff, equipment, most administrative costs. So relatively little reaches the bottom line. On average, across the whole month, only 20% to 25% of overall revenue falls to profit. But once fixed costs are covered, incremental revenue behaves very differently: roughly 40% to 50% of it drops straight to the bottom line. That is an enormous lift to cash flow, and therefore to practice equity. It is not uncommon to see a 50% to 70% increase in the bottom line simply by farming the low-hanging fruit. After 40 years, I have yet to see a perfect practice — one that had no meaningful incremental revenue left to add to its top and bottom line.
[H2] Derek Hill, CPA, CA
I am a chartered accountant who has spent roughly 40 years working pretty exclusively with dentists. For about two decades, my wife and I ran a consulting firm — Hill Kindy, later Transitions — that at its height had some 30 consultants working across Canada and the United States. For the last 20 years I have also brokered dental practices. Home base is St. Catharines, Ontario.
[H2] The Equity Lift program
I have recently launched the Equity Lift program, built in part on the fundamentals of Eliyahu Goldratt’s Theory of Constraints. His theory suggests that the throughput of any system is governed by its single most constrained resource — and only by that resource. Execution therefore means focusing entirely on removing the one constraint that is currently primary. At any moment there is always a primary constraint followed by secondary ones, and eliminating them in that order, one at a time, is what allows the enterprise to flow more profitably.
[H2] AI, and why I write about it
I also believe AI has the potential to reshape society in ways that are genuinely hard to predict. I see it as a double-edged sword. Side one: AI is providing, and will increasingly provide, more effective ways to operate a dental practice both clinically and administratively. Side two: at some point AI is likely to disrupt employment across huge sections of the administrative workforce. For a dental office, that would mean the loss of a large percentage of third-party insurance coverage. The full impact of both sides is not yet clear, and it is changing quickly, which makes the future harder still to predict.
