Is your business in the good profit or bad profit game?

/0 Comments/in , , /by

In dentistry as in most businesses, how your business operates says more about your company than you might suspect.

The culture of your workplace reflects your company values. If staff attend carefully to patients instead of rushing them in and out, then you have a more healthy culture.

 

Your people are your company’s greatest asset. In order to find continued success you need a hardworking, dedicated and motivated team. But if you do not have a great people-culture, it’s your responsibility to improve it.

I have been in this game a long time.  I have found that one of the key factors in  success has been the positive relationships with team members, leaders and managers have internally and also with patients. It doesn’t happen overnight. You have to cultivate this over time with excellent processes, procedures and outstanding communication.

Why bother?

Good relationships lead to what I call ‘good profits.’ This is a continuous revenue stream that comes from good customer interactions and relationships. In essence you’re building customer loyalty not on price, but service based on a personal touch. People want to stay with you. When this is done they will tell their friends and family members.

Of course the opposite can true. Bad profits are those revenues earned when you chase after every dollar and squeeze employees at every opportunity. They won’t like you. It will show in the way they act around patients and each other. As they say “you can’t fake authenticity.”

The result is patients don’t feel loyalty and they don’t return. Worse still they may also tell their friends about the experience they had. An unsatisfied customer is more than a missed opportunity – it’s multiple lost opportunities.

Unsurprisingly, what you need to do is treat your customers the way you’d want to be treated.

Good profits are earned when customers or patients continually come back for additional services and products and rave to friends and family about their excellent experience.

These customers become promoters of your business and they’re worth far more than any advertising dollars you’ll spend. People trust word-of-mouth and they are the most cost-effective growers of your business you’ll ever have.

The ultimate question is how do you create the appropriate processes and procedures? Start by measuring what makes your customer or patient satisfied and happy. This comes with quality assurance and quality assessment on every point of service. Review and improve your existing processes and procedures and focus on your customers and patients, plus team members, leaders and managers. All areas of an organization need constant improvement and that will come with continual organizational communication.

The goal is you want your team members and patients to (BLT) Believe, Like and Trust you and your organization.

So what does your business focus on: bad or good profits?

If you’re a dentist or other healthcare professional and you’d like to discuss how to lead a business that works for you please get in touch.

 

Dentistry is changing: do you know where you fit in?

/0 Comments/in , , /by

Dentistry as we know it is changing right before our eyes. The data is clear: fewer and fewer dentists are practicing as solo practitioners and more of us are moving toward group practice. While everyone has their own reasons, the biggest draw seems to be creating a better work-life balance.

 

patient-care-and-customer-service

It’s an understandable choice. On one hand your are expected to be an excellent healthcare provider, leader, and business person. While at the same time you have a family and all the obligations that come along with it.

For the majority of us who are not superhuman, something has to give. And most of the time the hit is taken on the family side of the ledger.

So it’s no surprise that many of us look to corporate dentistry – specifically DSO’s and or MSO’s – to even out the personal balance sheet.

Dental Service or Support Organizations or Managed Service or Support Organizations are markedly different from ordinary ‘mom and pop’ solo dental corporations.

The biggest benefit to the dentist looking for a bit of balance and structure is that MSOs come with built in processes, marketing, education and support that eliminate many of the headaches solo practices have to deal with.

But there is also a cost. That cost comes from the loss of control to equity partners, more interested in profits than patients. In many instances these groups are only in the game for 3 to 7 years after which the investment arm cashes in it’s chips and moves on.

At that point another group will step in with it’s own ideas about how things should be done.   

This invariably causes disruption and a lack of continuity within the organization. On the positive side process and procedures will be put in place that could perhaps reduce waste and control some costs. But that doesn’t entirely offset other factors such as additional layers of management, and an emphasis on short term profits at the expense of long term failure.

This isn’t an issue for discussion anymore. We must adapt and modify our practices and prepare team members and the public for these changes.

There is room for both business models. And the hope is that each model will force the other to become better not just in care but in service.

In the end patients are attracted to a particular dental practice based on their needs, finances and education. A majority will be moved by slick marketing, convenient hours and numerous locations. But others will value the continuity of care specialized services and BLT: an office they Believe In, Like and Trust.

If you’re a dentist and you’d like to discuss how to create a practice that works for you please get in touch.

Three simple rules for passing on your dental practice

/0 Comments/in , /by

Passing-down-you-dental-practice

They say you can’t take it with you. And it’s certainly true of dental practices.

Whether you plan on passing it on to family members, selling to a corporation or even another practitioner, there are three simple rules to keep in mind.

Rule 1: Value does not equal price. Value is an estimate of the financial worth of a practice determined by formulas. Price, however, is determined by the careful dance between how desperate a seller is to sell and how determined a buyer is to buy.

At present time, most of the dentists I know above the age of 60 cannot wait to sell their practice. Typically, the dental practice is one of their largest assets and is generally considered the best way to ensure a happy and  secure retirement.

Rule 2: Gross production is not what you want to purchase. A much better determinant of the value of a practice is really net income. So whether you’re considering selling your dental practice or making a purchase, it’s critical that you look at net income from the seller’s tax returns related to the practice. What a buyer should look for before making the purchase is the dental practice’s ability to make a profit. So as a seller the number one goal is to make the practice as profitable as possible before putting it on the market. The more profitable it is, the more valuable it will be to a would-be purchasers.

Rule 3: Never buy a practice’s potential, only the present or historic value. Future profits can be uncertain. Many times I’ve had someone say to me, “Dr. Coughlin, I’m thinking about buying a practice. It has great potential.” You really want to make your purchase price based on today’s value, not what tomorrow’s value might or might not be.

I cannot emphasize enough that even if you feel you’re not interested in selling your practice or you’re not considering buying a practice you should be prepared to sell at any point in time.

If you are considering buying a practice or selling your own practice, I may be able to help. My coaching services leverage over 30 years of real experience growing my business from one practice to 14.

Contact me today and let’s make sure you make the best and most profitable decisions based on your current situation.

Corporate dentistry not friend or foe

/0 Comments/in /by

What’s the fastest growing segment of the dental health care industry? No, not actual dental care methods like braces and tooth replacements. It’s actually corporate dentistry: the organizational DNA of the industry.

Although many of us are aware of the accelerating incursion of dental chains into our industry, it’s worth mulling over the facts for a moment and why it matters.

As a catchall term, corporate dentistry is growing at almost 40 to 45 percent each year. These Managed Service Organizations (usually chains) or Dental Service Organizations (same, except a DSO can be a stand-alone operation) can be owned or invested in by venture capital or equity firms.

It can be argued that such a financial relationship is problematic in practice. Equity firms typically invest short-term so when they get involved in dental firms they’re trying to triple or quadruple their money over a 3 to 7 year timeframe. When they get out and sell to another finance firm, this can be disruptive to the dental operations in that they may have to financially modify or change their models.

Most of these dental practices are run like franchises. Some have a universal look and feel along with strict franchise practices and branding. Others, usually existing dental practices, are allowed to retain their own unique character and feel, with the franchising instead focussing on suppliers and general business practices.

Keep in mind that like with all things there are excellent corporations, less than excellent corporations and poor corporations. The critical aspect is what is their short and long term goals are. And that should be your focus when considering bringing your practice under their system.