Deep inside each of us there resides a list. A “to-do” list that is unique to each of us. In a way this accumulation of tasks almost feels like it defines us as a human being. What’s weird is that dentists seem to have created additional subliminal lists and unless we can check them off we feel like failures. While varied, most dentists have a very predictable list that can spell trouble in their practices. I would like to take a moment and pull these out of the darkness and show you how each one can ruin your practice. It’s as if dentists need these seven benchmarks of practice to feel like they have “arrived”.
1. The Million Dollar practice: Currently the average dentist does about $800,000/year and nets out about $200,000 before debt. Certainly not bad but far from being a really good practice. Success is not a number. There is no amount of income that you can’t spend. The trick here is to get off the production number and look at net, and more importantly look at what you do with the net: save at least 20%, pay off all debt in 5-7 years (cars, homes, office, etc.), have the right amount and category of insurance, stay married, and plan out 10-20 years in advance.
2. Hire an Associate/Partner: Associates and partners don’t make problems go away, they magnify them. You need to hit certain benchmarks to even consider this as a growth strategy: 50-75 new patients per doctor per month, two times the number of hygiene hours as doctor’s hours, 80%+ effective recall system, at least a 50% direct (from existing patients) referral percentage, 99-104% collection rate, and learn how to embrace consumerism (giving patients what they want, when they want it, at a price they can afford).
3. Add a Satellite office: Like Associates, a lot has to be going well, with easily transferrable protocols, and have a great business plan to make this work. The majority of second offices become a millstone that will drag you down. The leadership, management, and business models just don’t exist in most practices to pull this off. With this being said about Associate/Partners, and a second office, I believe that if you are to compete and thrive in the future, you need to become the office that can actually pull this off. The day of an isolated single doctor being able to stay relevant to his patients, attract new clients, and continue to grow in an insurance driven, corporate environment is coming to an end.
4. Hire a coach: Sounds like I am about to step on my own toes. Every dentist I know wants to hire a consultant/coach. The problem is that there is one on every corner. Not much background, not much depth in their knowledge, and very few satisfied clients. Let the buyer beware when it comes to hiring consultants. Do your homework and make sure you have an out. No long term contracts. It should be a win/win arrangement, so that if you are not seeing improvement you can leave. One last thing. You are going to find that many of the companies that spend the most on advertising are the last group you would want to hire. In coaching/consulting relationships, you are forming a partnership with this group. Make sure you do your homework and are ready to do your part in implementing the strategies that are given to you.
5. Become a speaker: Be doubly sure you have something to impart to your audience. Most speakers are mostly entertainment and very little substance. If your office is not the type of office that people would ask about, you are probably not ready to go out and speak. You need to have an overhead below 60%, with long-term staff, and a huge following in patients. Your audience deserves no less, and you don’t want to be the hypocrite that says one thing and does another. This attention to speaking will quickly turn into a distraction and there is little or no money in it for you.
6. Working fewer and fewer days: For most of us, working full-time is what pays the bills. Getting an associate/partner (could be bad), and cutting back your days (is always bad without a plan) are assured to begin the long, slow slide into a practice with diminishing returns and poor results, not to mention the increase in stress. Cutting back needs to be the result of a carefully staged transition by a doctor who already has done what it takes to have a secure financial future, and has developed great leadership skills.
I realize that almost everything we looked at had a negative effect on the possible outcome of our practices, but each one of these can also be done in a way to secure an incredible business future. The problem is that these six areas are what most doctors’ chase, when what they need to do is become the practice that incorporates these strategies at a time that makes sense from a profit, growth, and life choice decision. You need to be on track with a 12-20% yearly increase in productivity and profit where necessity will dictate taking the next step in practice growth. This is how you Summit.
Michael Abernathy, DDS