Taking Charge of Practice Management
If you can operate your smartphone, you can optimize your practice
Considering that most graduating dentists who are current practitioners received about 30 minutes of instruction on how to run a business (and not from a business expert), they have been set up for failure.
Disruption seems to be impacting every major industry: Whole Foods is changing the way people relate to healthy food; Uber is squashing taxi values; Airbnb is crushing hotels; Netflix has eliminated Blockbuster; and incredibly, Amazon is causing Walmart to close stores. Although many industries are in rapid revolution, dentistry’s bureaucracy allows only for a slow evolution.
Most dentists default into living a “someday when” life. Some hope that retirement will be better. Others reduce their goals because they’ve generated less money and time than they expected due to their low level of business acumen—hoping for the best and trying not to lose what they have. In general, 95% of small business owners fail within the first year, and almost all fail within 5 years. Comparatively speaking, although dentistry fairs rather well in terms of overall business survival, few dentists are thriving.
To make more than just a minimal living requires being adept in practice management. Learning what to do and how to sustainably implement it, although challenging, can be accomplished easily and is worth pursuing for your family and legacy as well as your health and time.
Most dentists are basically in one of three places along the continuum of success. The first group includes dentists who have recently opened their new practices and are armed and dangerous with the possibility of “having it all.” As a friend of mine recently said, “It’s like you’ve been playing badminton and now you are jumping in the cage with an Ultimate Fighting Championship fighter.” The second group is cruising along successfully, but discontent. These dentists are doing well, but know they can do better. The last group comprises what I call the “fourth-quarter” dentists. They’ve been playing for three quarters, and now they’re coming to the fourth quarter with uncertainty. In 2008, their 401(k)s shrank to 201(k)s, and they have concerns about retirement.Regardless of which group you fall into, allow yourself to be where you are right now, and consider the process of sustainable change, which consists of awareness, acceptance, and action:
Awareness. Dentistry is in a new state, and maintaining the status quo will not allow you to fully realize your dreams. You’ll either need to change how you operate or lower your expectations and goals. With more than 50% of the dental workforce now consisting of individuals age 35 and under who work to live and have less loyalty to their employers, if you are deploying the same strategy the practice had when you purchased it, then you are likely not running on all cylinders.
Acceptance. If you are getting everything you want from your practice, your team is happy, and you are making your whole patient base healthy, then congratulations. If not, it may be time to check your ego and surrender to get to the point of acceptance. This marks the end of your suffering. The minute you acknowledge and accept the truth of your current situation, you reach a turning point for you and your family, your team, and your patients. Whatever your circumstances, they can be overcome by first accepting things as they are.
Action. Now you are ready to take action. The following paragraphs highlight the low-risk, high-return actions that private practitioners can take immediately to create time and affluence; help regain passion; and motivate the dental team while improving the health of patients.
Move Into “Push” Technology
Most of the available dental practice management software is what I call “pull” technology, which means that if you want key performance indicators, you have to stop what you are doing, interrupt your flow, and take the time to pull out the information manually. Applications are now available that tap into these desktop platforms, configure the numbers that matter most, and send the information directly to your smartphone. Just like the Fitbit does with health statistics, these applications “push” the rich information you need in real-time to help you make corrections on the go rather than months later. While you’re at home in the evening enjoying time with your family, you can see that you had four cancellations during the day and not one was rescheduled. What about your daily goal to do $7,000 worth of business? You can see that yesterday you did $9,000, today you did $7,000, and tomorrow you’re projecting to do $5,500. You can see all of your presented and accepted treatment for the month, right on your smartphone. When your most important numbers come to you daily and automatically, running your practice becomes more efficient and enjoyable.
Turn Payroll Into a Profit Center
Payroll is the biggest expense for private practitioners, and approximately 80% of a practice’s revenue is generated by about 20% of the team members. By reverse-engineering using these numbers, you can set milestones to reach your goal yearly income. Let’s say your goal is to produce $1 million. If you employ one hygienist, and you only want to work 16 days per month, you’ll need to do $4,500 a day, while your hygienist produces $1,000, for a total of $5,500. Your appointment coordinator’s responsibility is to schedule $4,500 and $1,000 per day for you and your hygienist, respectively, your assistant’s job is to ensure that you end up with at least $4,500 in production, and your treatment coordinator needs to focus on closing at least $4,500 in new treatment per day. Now your team is aligned with your values and producing outcomes, as opposed to merely trading time for hourly wages. This creates a system where the patient, team members, and practice all win.
Now that you have a new relationship with your key metrics and each team member has daily accountability by position (instead of a monthly, team goal), you will all be able to see for yourselves whether or not you are winning on a daily and monthly basis. Because their own bonuses are at stake, when production is down, your team members will now proactively look for ways to close the gap—just like you.
This strategy will allow you to step into better practice management so you can stop chasing your dreams and start living them.
About the Author
Gary Kadi is CEO of Next Level Practice®, New York, New York. He is an educator and advocate for the dental community, including dentists, dental teams, and their patients.