The Business of Dentistry: How to Set Yourself Up for Success
I spent 23 years selling dental equipment with A-Dec and then 16 more manufacturing it, at Forest Dental. I’d like to share some of what I learned over my career, that you might find helpful in your dental business.
Looking back on my time as a manufacturer's rep, my goal was always to better understand your needs and find ways to contribute to your success. In doing so, I learned to listen and connect the dots.
At Forest, we really got a kick out of shaking up the industry with designer friendly customization options, made to the highest specs. We made it our mission to add that one missing, but essential ingredient: the fun factor—for ourselves, for you, and for your patients.
Today, I’d like to thank you for all that you’ve given me. I would like to give something back: my understanding of the various factors found in a successful practice, that I learned from countless hours of working with dentists at dental shows, dealer showrooms and on the road. I picked up some valuable insights—and carefully polished and refined them—during my long journey, one that wasn’t always easy and didn’t always feel like success. Here’s what an old-timer like me has to share about running a successful dental business, staying the course, and always insisting on making it fun.
From the Big Picture to the Smallest Details: A Deep Dive on Setting Goals and Pulling Ahead
When taking on the business of dentistry, it’s necessary to observe your practice from two perspectives. The first is the macro—or big picture—view. From this vantage, you’re looking at your community, competition, goals, and aspirations. The second is micro, a focus on the smallest details done well. This article focuses on the macro, with my thoughts on micro are coming in the next article.
Before we even get into those details however, you have to start with a philosophy; an approach to your business that treats it like an ever-evolving path, rather than a set of rooms and equipment.
Be Bold from the Outset
One thing that is absolutely clear to me is that dental schools spend much too little time on the actual business of dentistry. It would be a lot less stressful and take less time to learn the ropes, if they did. What if their curriculum also focused on running a successful business? I’m certain that doing so would make at least the first few years much less stressful and more fun. These are the 3 fundamentals this curriculum would teach, that were key elements behind our success at Forest:
Kaizen: Adopt the Japanese business strategy based on the idea that there is always a better way of doing things. This fosters a way of thinking that stays open to new ideas and encourages innovation and seeking out new knowledge.
PDCA: Plan, do, check, and act means learning from your mistakes and challenges. Have a new out-of-the-box way of thinking? Don’t be afraid to try it, but don’t do it in a vacuum. Measure results as you go along and always find ways to make improvements
Metrics: Define what success means to you and learn how to measure your progress by comparing your previous numbers to your new ones; they’ll reveal your opportunities to improve
Ready to get started?
Making Macro Decisions that Set the Stage for Success
The first big commitment you’ve got to make after dental school is where and how to set up shop.
Choosing the right spot.
When choosing a location, consider trending demographics, visibility, traffic, mass transit, parking, and proximity to your home. Ask yourself, what could change? It’s easy to become lost in the day-to-day, while things are going on around you that you don’t notice. Pay attention. There is no reason to fight an uphill battle in what might be a declining neighborhood. Or, it may be worth taking a chance in one that others haven’t noticed is on the rise.
Should you own or rent? Alone or with associates? From my experience, even though it’s an investment, owning your clinic usually makes long-term economic sense. Whether you sell your facility when you retire, or rent it to your buyer, paying yourself vs. a landlord can make a critical difference in your retirement income.
If owning seems like too big of a chunk to bite off, consider going in with another dentist(s), be they specialists or not. Don’t be afraid to analyze owning several practices where you share ownership with your associates, eliminating turnover as it happens with non-participating associates if that’s your inclination. Have an open mind to all options.
People make the Difference
Next, you must hire a stellar staff. Remember that personality is as important as skill. You may be able to get used to a lethargic staff member, or learn to put up with grouchiness, but your patients shouldn’t have to. And many of them won’t, so don’t test their loyalty. Unhappy patients can easily find another dentist or talk your practice down. If you have a hard time building a team or letting people go, have someone else in your practice do it. But do not turn a cheek to it.
Another thing we learned at Forest was to foster an environment that encourages each team member to develop their unique strengths and learn to rely on them.
At Forest, everyone knew our mission. We had it framed in the main hallway and all employees were responsible and accountable to it. Over time, our jobs as managers became easier as we took off the various hats and trusted our staff to take charge of their areas.
Always Modernize
If there’s one thing that working in the Forest environment taught us, it was the value of investing in the look and feel of your practice. Creating a long-term modernization or update plan is smart business. Putting money aside for this, monthly, should begin the day you start in the facility. This way if you decide you want the latest Cone Beam, a new software system, or a new roof you will have the cash.
A business school curriculum will teach a future shopping center manager that if they let their facility degrade over time, customers will drive on by and will even pay more for the same item in a newer, sleeker shopping center. Why? Because we perceive more value when a good or service is acquired in a modern, up-to-date environment. If, and when, they finally upgrade their center, it takes time to overcome a lagging image. So, don’t wait! Instead, upgrade as you go.
A long-term update plan is similar to what you do with your home, over the years. You keep the surfaces fresh and renew the roof, gutters, kitchen, etc. You don’t wait until it’s time to sell to enhance the curb appeal. You do it over time and enjoy the results. As with your home, it’s more fun for everyone to work and visit an awesome dental treatment facility. When it comes time to sell, I have seen dentists almost give their practice away because 10 years earlier they thought to themselves, “Why upgrade when I’m going to retire in just a decade?” Meanwhile the practice hasn’t grown, they work in a run-down facility, and all the while having much less fun. Plus, they’re practice just isn’t worth as much when they do retire.
Put the Patient First
This is really the golden rule of a successful practice. Think through every problem or challenge from your patient’s perspective. Then, do everything you can to find a solution that will help and satisfy them. Where did I learn this? From the most successful dentists I met as a salesman. Over the years, I witnessed dentists who had weekly meetings where a different staff member would bring up a moment when he or she went overboard to extend better-than-expected service. I saw dentists set aside the last half hour of their day following up on patients.
Sharing stories in a weekly meeting creates an atmosphere that has your patients talking about what a great dentist you are. A customer’s loyalty translates into word-of-mouth marketing and growth.
Measure What Matters
It’s hard to know what’s working and what’s not if you’re not measuring those indicators. So, it’s hard to know what to continue to invest in, versus what you should let go of or refine. Do you keep metrics on dentistry performed per hour, day, or month? What are your opportunities to improve efficiency and make things easier and more profitable? How many ways can you reduce costs? How fast can you turn treatment rooms over? How many times can you eliminate assistants having to leave the treatment room mid-procedure?
Successful dentists who are determined to do things better can answer all of these questions. Why do they do it? As a business owner, it’s up to you to manage all these opportunities vs. just repeating the same things year in year out. Remember Kaizen, the first fundamental of our curriculum? Kaizen is in everything you do and there’s always a way to do it better. Think about your golf swing and your handicap. Your pro takes a video of you and you try the new move. Do you have the discipline to practice it and then use it on the course? It’s easy to fall back to your default mode. If you stay with the PDCA (our second fundamental principle) and measure everything relative to the last measurement, at the end of the day, you will have more fun, get better results, make more money and I promise, you will never get bored.
Metrics (our third fundamental) ensure you never find yourself repeating the same inefficiencies month after month, year after year.
Dentist friends tell me there are many classes in their dental school curriculums whose teachings are never used. While it’s not for me to say how much advanced chemistry a dentist needs to know to do their job well, how about making sure to devote some time to business classes, focusing on balance sheets, financial statements, internal marketing, infections and regulatory control and more. It’s no wonder corporate dentistry is growing so fast. Understanding business is critical in setting you up for success.
I’ve seen the costs associated with dental school grow immensely over the years. Banks are not as eager to lend money to dentistry. But I have seen over and over that when a graduate understands business basics, they make the same money after one year right out of school, as one who doesn’t understand business makes after five years of associating. This is also the reason why a dentist taking over a parent’s practice gets an immense advantage, as the business side is already in place and is simply ready to update and improve upon. Take this mindset to heart! Any business based on constant improvement is never boring, and on the contrary, can be exhilarating—and fun.
So, there you go. My hope is that there is something you can benefit from. In our next article, we’ll focus on some additional ideas from a ‘micro’ perspective.
Thank you!
