Provided by: MNP
How can you identify hidden inefficiencies in your practice — and take the right steps to improve its profitability? MNP advisors discussed this crucial topic during MNP’s Diagnosing Hidden Inefficiencies in your Practice webinar on June 10, 2025.
Dental professionals from across Canada received valuable insights and practical advice to help diagnose and address hidden inefficiencies and improve the performance of their practice.
Yohaan Thommy, National Leader of MNP’s Performance Improvement team, Ariane Babin, Quebec Lead with MNP’s Professional Services team, and Nakul Gupta, Senior Manager of MNP’s Value Creation team shared their knowledge with attendees to help them make their practices more efficient and productive in this insightful webinar.
How does EBITDA impact enterprise value?
EBITDA is your “earnings before interest, taxes, depreciation, and amortization”. It is an important financial metric that shows how much profit your practice makes from its daily operations before any financial or tax strategies are applied and provides insights into your overall financial health.
“What would be a good EBITDA margin? In my experience, a well-managed dental clinic typically sits at around an 18% to 20% normalized EBITDA margin,” says Ariane.
Practitioners who fail to monitor the financial health of their practice and take proactive steps to optimize their business value drivers often have a lower EBITDA margin. This results in reduced take-home earnings and a substantial decline in the overall enterprise value of their business.
What hidden inefficiencies impact the profitability of your practice?
COST MANAGEMENT ISSUES
Cost management issues such as high staff costs and unoptimized marketing spend can lead to EDITDA leakages in your practice. For example, your practice may allocate a significant amount of its budget toward marketing. However, if your patients are largely coming to your practice through word of mouth, this is a waste of money. It is crucial to monitor where you are spending your money and where your patients are coming from to determine whether you are receiving a return on your investments.
“High staff costs means more people. However, more people doesn’t always mean more productivity,” says Ariane. “Sometimes it’s a scheduling issue, sometimes it’s a delegation issue. Either way, it costs you your margin and leads to poor profitability and decreased enterprise value.”
A lack of CAPEX planning can result in the unplanned timing of investments or overinvestment in the repair of older equipment. It can also cause an absence of investments based on return on investment (ROI) or prioritizing areas of investment of growth.
OPERATIONAL INEFFICIENCIES
Operational inefficiencies may involve outdated equipment or ineffective supplies management — leading to overstocking or understocking. This limits the free cash available for your operations and can cause higher debt and waste for your practice.
REVENUE RISKS
Revenue risks include underutilized capacity, low patient retention, limited service offerings, and high rates of redoing treatments. Ariane says, “Underutilized capacity has a huge impact. You’ve got the space and the chairs, but not enough billable time. Sometimes it’s not about hiring more people — it’s about optimizing what you already have.”
This article is provided by MNP. It is for informational and educational purposes only as of the date of writing. This information should not be considered investment, tax or legal professional advice. For specific advice about your situation, please consult a tax, accounting, legal or financial professional. The information contained in this report has been drawn from sources believed to be reliable but is not guaranteed to be accurate or complete. CDSPI, CDSPI Advisory Services Inc., MNP and our affiliates are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.