Throughout my years as a dental consultant/coach, I have encountered a wide range of attitudes from dentists related to what I like to call “contentment and purpose”. Let me explain…….
Contentment is defined in the dictionary as “the state of being content; satisfied”. Purpose is defined as “the reason for which something exists or is done, made, used, etc.; an intended or desired result; end; aim; goal”. You might be wondering: “How are the two related and what does this have to do with dentistry”? A larger and perhaps more important question might be: “How are the two related and what does this have to with life?” Actually, there is a direct link. In my experience, very few people achieve true contentment without having lived a life with purpose. Alternately, people I’ve known who are living (or have lived) a life with purpose, seem to experience and enjoy true contentment. It seems that they go hand-in-hand. True in life and true in dentistry. Seems that truth is truth no matter what or where.
Could it be that a relationship also exists between this “contentment and purpose” and the difference between average practices and great ones? Based on having had the privilege to work closely with hundreds of dentists in their practices, my conclusion is that indeed, yes, there is a very close correlation. Doctors who practice with purpose seem to be more content, not just with their careers and their practices, but also with life in general. Sometimes I see the contentment first and then discover the purpose and sometimes it is the other way around. But there they are again, hand-in-hand.
Now just so you understand that I’m not some “head in the clouds dreamer”, I need for you to understand that contentment doesn’t mean there are never problems, difficulties, challenges, headaches, etc. Anyone who owns a business of any type or any size will experience these from time to time. But I do find that all of these are diminished and certainly much more manageable for those doctors who are practicing with purpose. They don’t tend to get as upset when the inevitable problems arise and they don’t seem to remain upset or stressed for quite as long. These more content individuals tend to demonstrate fewer wild swings in mood or emotions, exhibiting calmer reactions and a much steadier, unflappable demeanor that is much appreciated by everyone around them.
A pastor out in California named Rick Warren made the best seller list and gained quite a lot of positive publicity and notoriety a few years back by authoring and publishing a book called The Purpose Driven Life (2002). If you haven’t read it, I highly recommend it. But I would give an even higher recommendation for an earlier book he wrote called The Purpose Driven Church (1995). Even though I’m sure he didn’t intend it as such, it is one of the best business management books I’ve ever read. The thesis of the book is that when churches think first about their health, growth is sure to follow. “If your church is healthy,” writes Rick Warren, “growth will occur naturally. The purposes can only be accomplished, argues Warren, when church leaders stop thinking about churchbuilding programs and shift their focus to a “people-building process”. When you read the book, just use your imagination to envision how the methods and principles he describes can apply to many endeavors other than church. Read it while constantly asking yourself: “How can I apply that in my practice?” How is the overall health of your practice? Are you investing in a “people-building process” with your employees and patients?
In fact, I should tell you that most of the super-successful dentists I’ve worked with employ this methodology all of the time. They are constantly looking outside of dentistry for great ideas that they can “dentalize” and use to help them improve and grow their practices. If you’re not going to seminars and/or reading anything on topics other than dentistry, you should give it a try. Communication, customer service, marketing, human relations, sales, business management, leadership, motivation — are all learnable skills that would add to and improve your practice. Another thing to consider: Continuing education doesn’t have to be at dental conventions or focused on dentistry to be tax deductible!
I won’t presume to define what contentment should be for you, but let me share some observations of a few common characteristics I’ve seen in your colleagues through the years, all of whom seemed quite content.
- Little or no debt — It really should come as no surprise that debt raises stress and anxiety. Therefore, absence of debt must surely reduce stress and anxiety and must also certainly add to a feeling of contentment. Where do most dentists get into trouble with debt? In the practice, once school debt is eliminated, there are several common areas where debt becomes a problem:
- Over paying to purchase a practice — This is common among young doctors who generally lack the business experience necessary to make a sound judgment when evaluating a practice to buy. They fail to seek advice from a knowledgeable, neutral third party and instead rely primarily on individuals who have a vested interest in the sale because they will receive a commission. They nearly always neglect to consider cash flow and end up struggling to make the note payment on the practice and still have adequate money left to pay themselves. And these practice payments go on typically for 7 to 10 years.
- Building a huge, elaborately decorated office — This almost always results in cash flow difficulties. I have advised doctors for years to budget spending between 7 and 9 percent of net collections on their facility. This includes everything related to the physical structure: rent (or note payment), utilities, maintenance and repair, equipment, insurance, furniture and fixtures, etc. Amazingly, I have encountered too many doctors who are spending 20% or more of collections on their facility and then are puzzled as to why their personal income from the practice is below average. And these large note payments may go on for 20 years or more.
- Too many “must have” items — Another contributing factor that falls into this same budget category and negatively impacts many practices is a seemingly unquenchable desire on the part of many dentists to acquire every new “gadget” or new piece of technology that comes along. I’m not saying that you should never purchase new technology. Just be careful with the sales reps who, once again, are more interested in the sale due to the commission it generates for them than to how much the item will actually improve your bottom line. All I can tell you is that I see lots of these “must have” items that end up in closets or used as door stops while the doctor is still making those “easy monthly payments”. If you can pay cash without a negative effect on your business or personal financial status, then go for it. But just be careful about accumulating too many monthly payment commitments. As I’m writing this, I’ve had two lengthy conversations in the past three days with a dentist who has somehow managed to accumulate $155,650 in credit card debt all associated with purchases made for his practice. And trust me, this is far from the first of these type conversations I’ve had with doctors through the years.
- Failure to plan for taxes — Another common culprit that often leads to borrowing for survival is failing to set aside adequate funds to pay taxes. Sometimes these are payroll taxes, but more often are the doctor’s personal income taxes. Most doctors pay themselves on what the CPA’s call a “1099 basis”. This means that you have to make quarterly estimated tax payments based on both your prior year’s income and your current year’s projected income. The number of doctors who get into trouble with the IRS is shocking, especially when I look at their financials and see how much money they spend each month/year on accounting. The old saying “failure to plan is planning to fail” definitely applies here.
- A reasonably simple lifestyle — This is, of course, closely related to the debt problem described above except on the personal level rather than the business itself. Big homes, exotic vacations, fancy automobiles, boats, second homes, private schools for the kids, country clubs, even airplanes —I’ve probably seen it all. Again, let me assure you that I’m not judging you in any way, just trying to point out that most of the truly contented doctors I’ve encountered aren’t burdened with having to generate the income required to fund all of these. That seems to be the key: not being enslaved to material items or the trappings of the millionaire lifestyle. There was a book written back in 1996 called The Millionaire Next Door. The authors (Thomas Stanley, Ph.D. and William Danko, Ph.D.) spent 20 years studying how people become wealthy. From the introduction: “Most people have it all wrong about wealth in America. Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you actually accumulate, not what you spend. In the course of our investigations, we discovered seven common denominators among those who successfully build wealth.
- They live well below their means.
- They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
- They believe that financial independence is more important than displaying high social status
- Their parents did not provide economic outpatient care.
- Their adult children are economically self-sufficient.
- They are proficient in targeting market opportunities.
- They chose the right occupation.”
I believe that in choosing dentistry you have definitely chosen the right profession and I also believe that any dentist can become wealthy. Stanley and Danko further state: “Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.” A few years later (2000), Stanley wrote another book entitled The Millionaire Mind. In it he further explores the ideas, beliefs, and behaviors that enable millionaires to build and maintain their fortunes. I highly recommend both books.
- A well trained, highly skilled team with little or no turnover — Most of you will spend more waking hours each work week with your employees than with anyone else. Let that thought sink in for a moment. Now explain to me why you would want to have someone working for you that you don’t enjoy being with? You don’t have to love them, but shouldn’t you at least like them? They don’t all have to be your best friend, but shouldn’t they at least be friendly? Do you really enjoy whining and complaining? No. Then do something about it. You can choose to flock with turkeys or you can choose to soar with eagles. Key to remember: You choose. Oh the stories I could tell: constantly coming in late or not at all; having to leave to deal with “personal emergencies”; rude to patients on the phone; rude to patients in the office; rude to the person who signs their paycheck (you); describing in great detail their own personal problems to every patient and/or anyone within earshot; lack of personal hygiene; bickering and back-stabbing with other employees; constantly “stirring the pot” over every little thing that doesn’t please them; beginning and ending every sentence with “I” or “ME”; no concept of teamwork (limited concept of work at all); an entitlement mentality; always asking for more (more money, more benefits, more time off, more help with tasks they don’t like, etc.); never satisfied; maybe even stealing from you — I could go on and on. How can any of this possibly lead to contentment for you, the doctor? My advice: don’t settle for less than the best. Hire great people and pay them well (including an incentive program that is growth and profit based). Invest time and money in training them. Look for, and then be diligent in nurturing, an “ownership mentality” in all of your team members. It has to be more than “just a job” for each of them. You want people that work “with you” and not just “for you”. As soon as you have 3-4 people employed, choosing people who “fit in” with your group and possess or can quickly develop a team mindset are much more valuable than those claiming X years of experience or an above average ability to simply perform specific tasks. You can train someone to accomplish tasks. You cannot train someone to have a great attitude, get along with others, and treat your patients like gold. I also advise that you “hire slowly and fire quickly”. By this I mean taking enough time to get to know more about the applicant than how long they’ve been in dentistry or what their last job was. Try to get to know them, not just know about them. Check references diligently. Have your existing team members spend time with them both in the office and outside. Pay for a couple of lunches or after hours meetings between the applicant and your existing team members. They can tell much more quickly than you usually can whether or not this is the right person. Plus, once they commit and tell you “this is the one”, they will be much more likely to work to insure the success of the new person in fitting in to your operation. On occasion, an applicant will fool everyone and you’ll end up with someone who really shouldn’t be in your practice. Deal with this quickly and efficiently. Don’t fall victim to the myth of “give her a little more time, she’ll get better”. They rarely ever get better. What you see in the first couple of weeks is what you’ll see repeated forever. Admit the mistake, deal with it, and move on. Remember: Your goal is contentment, not constant frustration. One more thought: Your patients definitely notice when there are new faces in the office every time they come in. Constant staff turnover is not only hard on you, the patients hate it. They’re already nervous. Now they have to deal with a new person that they’ve never seen before. Is this person trustworthy? Do they know what they’re doing? Have they ever done this before? These are the questions going through the minds of your patients. If they see too much turnover in your staff they might even have the thought: This doctor must be a real [email protected]#$&%* to work for! Face it, most people have worked for a boss that is. You don’t want them thinking that about you, do you? Trust me, it is not a practice builder.
- At least one more doctor in the practice — At first glance, this might not seem to be a key element to achieving contentment in your practice. But having another doctor in your practice create opportunities to do some things you likely could never do as a solo practitioner. An immediate question that could occur at this point is: Should I have an associate or a partner? Let me amplify, from my perspective, the advantages of each and then the additional advantages of partnerships. Either associates or partners can do the following:
- Allow for increased productive capacity — Another doctor will obviously add his or her own personal production to the practice total, but will also allow the addition of one or two additional hygienists as well. Every doctor reaches a personal limit in terms of production. When you’ve reached your limit, what options do you have? You can increase the number of hours you work per day. You can increase the number of days you work per week, month, or year. You can raise your fees. As you can see, all of these have limitations and probably more negatives than positives for the practice. You probably don’t want to work substantially more hours or days and there is always a limit to how high you can establish your fees and retain your patients.
- Allow for expanded hours — Many dental practices are open four days per week (Monday – Thursday) and eight hours per day (8:00am to 5:00pm). These are not convenient, consumer friendly hours for an overwhelming majority of Americans today. Another doctor will allow the practice to expand its hours and be more consumer oriented. Perhaps with two doctors the practice could be open some earlier morning and later evening hours five days per week rather than four.Adding Saturday hours will make the practice even more consumer friendly.
- Allow for a differing mix of procedures and/or patients served —When looking for another doctor to join your practice, be sure you DO NOT bring in someone who wants to do the same procedures you like to do and see the same type patients you like to see. If you don’t like Endo, the other doctor should love it and be good at it. If you hate seeing kids, the other doctor should love seeing kids and be very good with them. You can even expand this thought process to other areas. If you like taking summer vacations, look for someone who loves winter vacations. If you make lengthy trips to visit relatives for holidays, be sure the doctor is “local”. You get the idea.
- Allows for someone to bounce ideas off or possibly to mentor — I probably would have never thought of this on my own, but after hearing it from so many doctors through the years, I’m convinced of its importance. Face it, practicing solo is basically practicing in seclusion. There is no one else in the practice that knows the pressures you face day-to-day, hour-to-hour, sometimes even minuteby-minute as you make decisions concerning the proper care of your patients. Someone else to discuss a particularly challenging case with is a welcome relief for many. Someone to verify your findings and recommendations or perhaps even offer alternatives can make a huge difference in the degree of stress you might experience. Others enjoy the mentoring aspect of having another doctor in the practice, someone to share their years of experience and expertise with. Someone to instruct in the “real world” of patient care as opposed to the “ivory tower” world of academia and dental school.
If you decide to employ an associate, remember that he or she is precisely that –an employee. There are two huge mistakes I see doctors making over and over when employing an associate: no contract and overpaying. Let me explain.
Lack of a contract — This is a major mistake and can lead to absolute disaster. I’ve seen numerous instances of associates going to a nearby location to practice, either as an associate in another practice, purchasing an existing nearby practice, or starting a brand new practice nearby. Unless the associate is a complete loser (which begs the question about why you hired the person in the first place and then kept him or her around for any period of time) he or she will draw some of your patients to the new location. And they are your patients, not the associates. Remember, this person is an employee when working for you as an associate. This brings up a related issue: Many associate doctors are hired as “independent contractors” rather than traditional employees. Most doctor/owners employ this as a strategy to save a few dollars on matching employment taxes. If you or the associate ever gets audited by the IRS, it is almost guaranteed that the ruling will go against you. If you do any of the following, the associate will likely be deemed an employee and not an independent contractor: provide one or more assistants that are paid by the practice; provide tools, equipment, and workspace; pay for CE and/or reimburse for travel and other expenses related to CE; control the financial aspects of the job (think fee schedule). These are just a few of the many factors the IRS will consider. If the ruling does go against you, you will be saddled with paying the back taxes, PLUS interest AND penalty. Be very careful with this decision.
Overpaying — It is very common to find associate dentists being paid on a commission basis at a rate of 35%. I’ve seen some as high as 40% and a couple at 45% and even one at 50%. In some instances, the associate is earning more than the owner doctor, even when working the same amount of hours. Do I really need to explain how crazy this is? I advise that the employee or staff component of your overhead expenses average about 25% of what you collect. This is one of the key elements necessary to keep your total overhead under control. Many, many practices are overstaffed and spend way too large a percentage of the practice income on the staff. If you agree to pay the associate dentist 35% (or more) there is just no way to keep your employee portion of practice overhead at about 25%. It is just mathematically impossible. Many doctors will tell me that it is just impossible to hire someone “in their area” for less that 35% (Note: Everyone erroneously believes that their area is different, unique, special, or in some way outside the norm. I find this to be untrue about 99% of the time.)
A partner, on the other hand, is a step up and has several distinct advantages over an associate.
- Ability for the owner doctor to remove a portion of the equity from the practice while still working — This is the best of the best. Unless you’re ready to sell out and walk away from your practice, this strategy is one that every practicing dentist should be taking advantage of. If done properly, there is no reason why you can’t receive hundreds of thousands of dollars plus interest for fractional pieces (25%, 33%, 50%, etc.) of your practice while you remain in practice and see your month-to-month “paycheck” go up. That’s right. Make more every month plus get paid thousands that you can hopefully invest for retirement, or whatever you want in the future.
- Ownership mentality and focus — An associate will just never have the same mindset or intensity or desire to see the practice thrive that a partner will. It’s just human nature and it can’t be ignored. You’ve always wanted your employees to have the same commitment to the practice that you do, right? How has that worked out for you? Who really worries about the place other than you? Who loses sleep over upset patients? Who agonizes over whether or not there is enough money in the checking account to pay all the bills? You, you, you, and nobody else but YOU! But with a partner there is someone to share the load. Someone to share the planning, management, and implementation. Someone to share the decision making.
- Ability to retain leadership status as “managing partner” and receive a “bonus” for it every month — You can certainly involve the partner to any level you desire, but if you want to remain in actual control it is possible. Nearly all partnerships have a “managing partner” who makes the bulk of the decisions and/or whose decisions cannot be overruled. So even if you repeat the process of bringing in fractional interest partners 2, 3, even 4 times, you can still maintain control. And through the use of a “founders fee” (since the practice is or was once all yours) of from one to five percent of collections each month, you’ll now get paid extra to make the decisions that you’ve been making since day one for “free”.
TO BE CONTINUED NEXT MONTH