How do you pay your associates? Like everybody else, no doubt, you give them a percentage of the gross they generate. But how come you don’t charge them a percentage of the material costs?
One of my clients came up with this idea recently. Her associates do a lot of enamel bonding, which involves a lot of composite, and her costs were escalating. She asked me if I knew any practices that charge their associates a percentage for materials.
I didn’t, but to be honest I don’t know why no one has thought of doing this. Materials are usually between 3% and 6%, and we typically mask the cost of materials by an associate sliding scale percentage pay plan, but wouldn’t it be fairer to treat materials like you treat lab bills and extract the cost before you divvy up the proceeds? That way you could actually offer your associates a bigger percentage on their sliding pay scale.
Get in touch if you’d like to work through this idea to see how it could help you build in cost control and improve profitability.