Cheated Out of the Future That You Deserve
How to invest in the future of your practice to increase market value
You are about to be tested. Imagine that someone came to your door because they wanted to buy your practice, and they were so motivated that they offered you a million dollars.
Some of you might not have to imagine this scenario because someone already came to your practice and tried to convince you to sell. Maybe you haven’t agreed yet, but you are considering it and trying to negotiate. Maybe you’re waiting for another, slightly better offer.
I highly suggest that you do something today that your future self will appreciate. Don’t sell your practice. Don’t give it up so easily to the capital investors that come knocking. If they haven’t come yet, I guarantee that they will. They are going to pressure you into selling your practice for much less than it’s worth to you—and they’re going to use your fear and uncertainty of the future against you.
You might be thinking that selling sounds like a good idea. You would get to spend more time with your family, retire, and go to an island somewhere. Nothing is more tempting than being handed a big, fat check—especially when you don’t have to do much extra work to get it, but these capital investors know exactly what they’re doing. They know you will be blinded by the instant gratification. They are banking on it to get you to give up your practice—the one you worked so hard to build.
Let’s take a step back and examine the context. The reason these investors have suddenly become so interested in your practice is simple. The dental industry is experiencing a golden age. It’s recession-proof and has high profitability. It is the best career to be in right now, according to at least six major news sources. Do you want to know the best part? Things will continue to get better and better for dentists; profitability and growth potential will continue to skyrocket. It makes sense, therefore, that investors would want a piece of the action. But for a practice owner, value is partly about monetary value, but it’s also something more. The reputation of your practice, the happiness of your employees, and your patients’ loyalty are all part of how we measure a valuable practice.
Whether you’re interested in selling right now and getting out of the business, or you want to wait awhile before selling, my advice is the same. Take some time to intentionally build up your practice’s value, and when you do decide to sell—do it on your terms. Why? Your practice is your “golden goose,” your moneymaking vehicle. It is worth so much more to you than one big, fat check—a check that you can spend and then kiss goodbye. In fact, your practice will continue to provide for you for many years. More importantly, it has the potential to provide for your family long after you’re gone. If you have the wisdom to invest in your business, then your “golden goose” will prosper, production will increase, and your net worth will climb higher than you ever imagined, and certainly higher than if you went ahead and sold your practice right now.
What does it mean to intentionally build up your practice’s value? How do you go about getting started? Here are just a few tips that are easy to implement:
1. Invest in the value of your facilities.
Whether it’s updating your décor, repainting your walls, buying a beautiful and highly-visible sign, expanding your backstage areas, or building more treatment rooms, there are literally hundreds of ways you could be increasing the value of your physical office space. If you can expand, that’s even better. The more operatories you have available, the higher your monthly patient count, the greater your production and collection potential. This is an investment that pays for itself eight to 10 times over in value added to your practice.
2. Invest in the value of your team.
Your space could be gorgeous, your equipment could be top of the line, your treatment may be the best in your state, but if you aren’t regularly investing in training your team on first-class patient care and highly finessed skills, your practice will never reach its full success potential. You might think, “I spend enough on payroll. I can’t afford to dish out more money on my team every year.” Think about it this way: it’s an investment in your greatest asset—your most important resource. An investment, unlike an expense, puts money back in your pocket. For every dollar you put into training your team, you get (on average) $2 back in value, and therefore double your investment.
3. Invest in other producers.
I’m going to guess that you’re highly intelligent, highly capable, and highly trained in your field—whether it’s general dentistry or something more specialized. There’s only one problem. There’s just one of you. As you begin to study strategies for increasing your practice’s value (and consequently, your net worth), you’ll start to realize the importance of “clinical duplication,” hiring and training other practitioners who can do exactly what you do. While the prospect of hiring other practitioners might make you anxious, imagine this investment to be like cloning yourself. You will be able to literally double or triple the amount that your practice is able to produce per day. The value of your business as a whole will continue to climb as you invest in your producers. When it comes time to sell your practice, you will be grateful that you made this decision because your practice value will skyrocket.
Remember, do something today that your future self will appreciate. The dental industry is going through a major shift; everything that you’ve grown to understand about the business will be turned on its head. But don’t let that force you into a corner. Regardless of what’s happening in the industry, you are still in complete control of your moneymaking vehicle. You are in control of your future. Don’t let one fat check cheat you out of the future that you deserve.
About the author
Jay Geier is a speaker, consultant, and president and founder of the Scheduling Institute. He is also the creator of the world-renowned, 5 Star New Patient Generation Team Training Program. A free CD about this program is available at www.schedulinginstitute.com/ID.