Maximising return on investment for dental equipment

The dental practice is first and foremost a care provider. Delivering high-quality clinical treatment and patient services is the priority for every member of the professional team. However, it must also run efficiently as a business, which means balancing expenditure with profitability. Investment back into the practice is crucial to ensure a modern environment that features innovative facilities and provides advanced yet streamlined dental treatment to patients. This is especially important with regards to equipment. To maximise the return on this investment, there are a number of both financial and practical aspects to consider.

Calculating ROI

When it comes to purchasing capital equipment, it’s important to do the maths before putting a significant dent in the bank account. When broken down, ROI can be measured using the below formula:

Gain from investment – cost of investment = ROI (x 100 to give as a percentage)

Cost of investment

Though it looks straightforward, it can be difficult to accurately estimate what will be gained as a result of the investment. To give a simple example, if a practice spends £10,000 on equipment for the introduction of new services, and makes a profit of £11,000 over the next year from those treatments, the ROI for this time frame would be:

£11,000 – £10,000 = 10%

£10,000

The same formula can also be applied prior to making the investment as a way of understanding how much profit a piece of equipment would need to generate in order to be a worthwhile investment for the business. For larger investments and more advanced technologies, the time frame would likely need to be adjusted to calculate the profit made in 3 or 5 years post-purchase. For this reason, an annualised ROI may be more useful.

Optimising the numbers

There are several ways to improve the financial implications of a capital investment. One is to make use of the Capital Allowances[i] available that provide tax relief on money spent on any essential equipment for the practice. The Annual Investment Allowance is one such option that enables you to claim tax deductions on qualifying capital expenditures. This would help to reduce the overall cost of new equipment to the business.

For those concerned about cash flow when contemplating a significant outlay, many dental manufacturers and suppliers provide different financing solutions to help here too. These include paying in instalments over time to reduce the immediate impact on the practice’s bottom line. The ROI calculation can then be adjusted to estimate the annual return on the investment made each year, helping to balance the books and ease cash flow.

More than your money

Beyond the financial investment, it is essential to keep the equipment running smoothly and for as long as possible to really make the most of your investment in the business. For capital equipment, this means meticulous in-house cleaning, testing and monitoring, as well as professional maintenance and annual servicing and/or validation as required by an appropriate engineer.

By keeping the equipment in good working order, it is more likely to operate efficiently, saving the practice team time throughout the day to focus on their patients. There is also a significantly reduced risk of a technical fault, equipment malfunction or a breakdown – all of which would cause downtime for the practice, disrupting patient services and inconveniencing staff. The full cost to the business of unreliable equipment could be even greater should appointments be cancelled completely or, worse, patient safety compromised. Practice reputation could be damaged, patient loyalty lost and staff job satisfaction decreased.

This highlights the importance of having access to equipment servicing and technical support you can depend on. With Dental Directory, for example, you can do more than purchase industry-leading equipment from a supplier that has been trusted in the profession for more than 50 years. We also offer 1- and 3-year service plans that include the annual service, inspection, calibration and function testing of equipment to keep you running. Our team of engineers offers fast and efficient repairs too, with a 92% first time fix rate to give you complete peace of mind. The result is minimal equipment downtime, streamlined equipment costs and maximum longevity of product life for optimised ROI.

Protect your investment

Whether you’re looking to purchase a new dental unit, an autoclave or a CBCT imaging machine, a good investment will always be worthwhile for the business in the long-run. To make the most of every pound spent, it is important to protect your investment by looking after the equipment and prolonging its working life.