I would have to say that there are many things I like about the Fourth of July, but my favorite is eating desserts. For almost 35 years, we have thrown a Fourth of July get together on our farm. We generally have a hundred or so assorted adults and kids over for the Fourth of July celebration. While we supply all of the meat, the music, and the lake with awesome fishing, a lot of the guests bring side dishes and desserts. If I have not said this before, my wife is an incredible cook and especially loves to bake. With this said, through the years I have become much “pickier” about the kinds of desserts I eat, and especially whose desserts I eat. If they don’t meet the “better than Connie makes” test (that’s my wife) I won’t touch them.
I am always bragging about my wife’s recipes and passing out their written ingredients and baking instructions to anyone who wants to become a world class “Southern” baker: Real sugar, real butter, really good. The strange thing about this is that they rarely taste the same. You see, recipes are awesome if you can read, its well written, ingredients are accessible, there is a list of cooking utensils, and you actually follow the instructions. The caveat is that if the recipe doesn’t taste the same, someone changed the recipe: Added a little more, altered the ingredients, or there were too many cooks.
Good is good, no matter where you go. The question always comes down to: Can you duplicate this? How much skill will it take? Is it transferrable and reproducible? In recipes and in dentistry, I say yes, yes, yes. Is there a great, almost perfect model for the “business” of dentistry to create profit quickly and consistently for an average dentist? Can dentists become successful in any part of the country? Can you find great staff no matter where you live? Will the public appreciate the effort and skill that you and your staff bring to dentistry?
It is still possible to make the perfect cake and have the perfect icing too (these are two different areas, and each are equally important)? The cake represents the basic business structure that has to form the foundation for any type of practice. The icing is the difference in an awesome great cake, and a mediocre dessert that no one is lining up to get. The icing represents the internal marketing that is spot on, because you understand the demographics of those who live around your practice: Age, income, educational level, needs, and desires. It’s the finishing touches that ensure that you will have raving fans. You would think from the large number of practices that struggle and never reach their potential, that this “recipe” and its “ingredients” are just too difficult to find and implement. Nothing could be further from the truth. This is the first of many discussions on a dental business plan that guarantees profit and success while moving to eliminate debt and create a legacy for your future in dentistry.
I would like to minimize the variables and only construct a roadmap for a super successful first practice, next practice, or reimagining an existing practice. We will eliminate the clinical side for the moment and only discuss a singular recipe for success that I am intimately familiar with. While what we discuss will work for a new start up practice, I will limit our discussion to purchasing an existing dental office, for various reasons we will discuss as we go. As in all journeys, we need to qualify and quantify each step and ideally start with the very first step that lays the foundation for a successful strategy in this new dental economy we find ourselves in. Literally a can’t miss strategy for anybody anywhere when it comes to purchasing a practice where you can triple or quadruple your initial investment in the matter of 12 to 24 months.
To make this crystal clear, we are looking to purchase an existing practice, at a fair price, in a great location, with real estate if possible, and grow it exponentially over the first 12 to 24 months while paying off the initial debt we incurred to purchase the purchase. A kind of dental fixer upper where we take a not so good practice in a great location and make it remarkable.
I have already said this, but I want to make sure that we dissect this down to the basics, because some of the readers will be first time owners, and others, while owners, may not be versed in how to do this profitably. Most doctors who approach a satellite office purchase or opening, find it incredibly difficult to turn a profit and tend to double their stress levels when they realize that absentee ownership is way different than being there every day driving the production and growth.
Our first stop needs to be in discussing some our premises that will lead to a 200%-400% ROI in the first 24 months of ownership.
I am going to suggest that in this quest we singularly focus on an existing practice in a great location. This is governed by looking at this purchase with an eye towards making profit quickly and decreasing debt while we increase our assets and money for a bright future. I choose an “existing practice” because it offers the biggest bang for the buck with instant income and patient flow. If we close on a Friday, we will have money coming in on Monday. In starting a practice almost 50% of the startup cost is for building out your leasehold improvement: Walls, cabinets, plumbing, AC, lab, ops, parking lot, etc. If you purchase an existing practice, all of this will be in place. Before you turn you nose up to the fact that this isn’t what you want, remember that we are using “profitability” as our matrix for this endeavor. Sure, a nice new office with brand new equipment is intoxicating if you are a new owner. But will it decrease debt and exponentially create profit from day one? Absolutely not. We also want to remember that the second item that we need in order to foundationally select our investment is that this has to do all of the things we are discussing for an average dentist. Yep, that’s most of you. If you go in average, there is no limit to where you can take this investment. You are almost always guaranteed to better your performance when starting at “average”. It’s just less complex to base our decision or selection of the practice for an average doctor, even if you believe you are exceptional. There are far too many dentists with a great self-image, for no apparent reason. They claim excellence but their results tell another story. So, don’t start this journey by thinking that you are “the one” that can always beat the odds we see in dentistry. If you do, and that would be awesome, you will only make more profit. But if reality is a harsh mistress, you can still be certain of 2 to 4 times return on your investment if you simply follow the recipe.
Hopefully, I have piqued your curiosity. But let me assure you that as we progress on this journey that my Proof of Concept is grounded in 50 years of dentistry. It isn’t bragging if you can do it. My goal for the next discussion is to firmly set the goals and list all of the premises that we will use in selecting this practice. You will find that most of these topics will fly in the face of “commonplace” occurrences in dentistry. They will challenge you to reassess your current thoughts and goals as we create this recipe for success. Keep in mind that doing the same thing over and over again only gets you what you are getting. My hope is that somewhere inside of your professional goals is a desire to win at the financial game of dentistry. Get ready, this is going to be fun. Don’t miss even a single discussion. Just like the dessert recipes, you must follow each and every ingredient in the right order at the right temperature – and timing is everything.
Michael Abernathy DDS