Why Dental Practices “FAIL”
You have probably heard that Dental Practices rarely fail. Well, recent economic woes have changed that story to some degree. There seems to be many more “motivated” practice sellers lately and I’ve recently run across a few dental practice bankruptcies and foreclosures. Surely this is a testament to our economic times. According to dental statistics, here are some of the primary reasons dental practices fail (in no order);
- General Dentist focusing on Cosmetic Dentistry. A lot of general dentists are placing too much focus on cosmetic dentistry and not enough focus on bread and butter dentistry. If you focus more on the bread and butter – crowns and bridges, the cosmetic stuff will follow within your own patient base.
- Dropping your PPO’s/insurance too early. You can drop or cap your PPO’s at some point if your practice is flourishing. However, if you drop them too early, you can quickly get into trouble. Accepting insurance is a form of marketing and it comes with a heavy price.
- Stop Marketing – My philosophy in business and in life is if you are not growing, you are dying. Marketing, both internal and external, should always be done. Just like death and taxes, losing patients will happen and caused by a variety of reasons. Therefore, you always need to find more patients. For those of you who are in a growing phase, you need to allocate about 5% of your collections on marketing. For those who are in a stable phase, allocate about 2%.
- Not knowing your numbers. What are your daily goals for production? Collections? Hygiene? Overhead? Payroll? Are you managing to those numbers? I know several practices that keep missing their numbers and think they can sit back and wait for better times ahead. Stop waiting and start managing! Take Action before it’s too late.
- No Internal Referrals. This may sound simple, but internal referrals is an indicator that you are giving your patients great service and care. If you are not getting internal referrals, you are not giving your patients the care they expect.
- Overstaffed – Remember the formula for payroll as a percentage of production? It should be about 27% (existing practices of more than 2 years). Another formula to consider is that you should be producing $20,000 for each team member in your practice. If you have three staff members, you should be producing $60,000 per month. Again, these are benchmarks.
- Not Recognizing You’re in Trouble and Not Seeking Help – This has been happening in the real estate market as people are losing their homes left and right. They don’t realize that they’re in trouble before it’s too late. They have used up all of their resources to continuously bail them out and now their lines of credit are used up. They get behind on payments and they lose their house or practice. Know when you’re in trouble, seek help, listen to the advice that you are being given and take action.
- Insanity – This is the dentist who continues doing the same thing over and over again and expecting a different result. They figure that eventually production will kick in, or the same marketing they keep doing will catch on. Or, the same case acceptance techniques will start working. Or the same lab that charges them $250 per crown will magically lower their rates. You get the point!
Now that you know why some of these practices have failed, do the opposite:
- Focus on your bread and butter as your first priority dentistry.
- Keep your PPO/Insurance in place for right now.
- Keep the marketing going, both internal and external.
- Know your numbers and manage to those numbers, especially accounts receivable, production and overhead.
- Monitor your internal referrals to ensure you are making your patients happy
- Keep staff levels at 27% of production or understand that increased spending comes from somewhere!
- If you are not making your numbers, make adjustments, try new things, don’t reinvent the wheel, find out what is working in other practices.
- Finally, seek a practice coach and ask your coach for help. Don’t stop there. Implement what they suggest as long as it makes sense and produces results.
Keeping these bullet points in mind will help you get through the slow times so that you are around when the good times come back.
Continued Success!
Art Deden
What is Important?
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Establishing priorities is difficult for many of us. "How," we ask, "can you say one item is more important than another item when everything is important?" The alternative to consciously setting priorities is unconsciously reacting to demands as they occur. Reacting seldom brings the best results. Initiating action requires control coupled with decision- making abilities. In your efforts to establish priorities, ask yourself the following eight questions:
Remember, too, that as difficult as it is to set priorities, you make a priority decision even when you decide not to set priorities. By default, you allow any urgent activity to control your time while items of greater importance go unattended. |
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Do You Have Stop and Go Practice?
If you have the unfortunate task of dealing with rush hour traffic, you know how exhausting it can be. Unlike cruising at higher speeds, stop and go traffic requires greater presence and there’s always more opportunity for mishaps.
Many dentists practice this way. Filling a tooth or two, then back to the office to read the latest in a dental magazine. One or two more fillings, then surfing the net for a new boat. Adjusting a crown seat then finishing-up on some charts. Complete a new patient exam then returning a phone call. The day is filled with interruptions and attention stealers making the day unproductive and unfulfilling.
We all have slow times, but during those rhythm-breaking lulls, it is important to remain focused by working onyour practice. Improve your website, clean your desk, review team performance reviews, or determine what barriers are holding your practice back.
By staying in the zone, you’ll deliver better results and help more patients become healthy
Continued Success!
Art Deden
Tags: dental practice development, dental practice management, improving your dental practice, Leadership, practice development & growth
Questioning the Status Quo in your Dental Practice
A friend of mine has an incredible family recipe for baked ham that was handed down from generation to generation. The first instruction was to cut 2″ off one end of the ham. For years, according to my friend, these instructions were followed without question.
When the recipe was handed down to the newest member of the family, she asked why the 2″ was to be cut-off. Did it add to the flavor? Reduce cooking time? It wasn’t until the surviving great grandmother was consulted, that the answer was revealed. “My cooking pan wasn’t big enough so I always had to cut off 2″ to make it fit” was the answer.
How many of your current policies, begun years ago at a lower practice volume, no longer serve you?
Maybe all you need to do to increase your production is to buy a bigger pan! Is it time to revise your new patient process? Is it time to improve your patient “hand-off” process? Can portions of your treatment planning process be delegated to others on your team? What’s adding extra steps, wasted motion, or needless activity to your mission of providing quality care and service?
Questioning your status quo can be one of the most important aspects to growing your practice. If everything you currently do is sacred and immune to inspection, you are a prime candidate for practice stagnation!
Continued Success!
Art Deden
www.vista-practice.com
You Have to Name it to Claim it…
No knowing what you precisely want is not OK. If you cannot name, with great specificity, what it is you want, you will never be able to claim it. If you cannot decide which movie to see, what meal to order or what to wear, is it any wonder you find it hard to identify your goals? Indecision creates inaction. Inaction leads to results you don’t want.
Imagine, you put an ad in the paper offering to sell your car for $6,000. What do you think the chances are that somebody will look at it and say, “Gosh! This is a really good car. I don’t think they’re asking enough. Let me offer them $8,000?” Sound crazy? The lesson here is that if you don’t ask for enough, the most you will ever get is what you asked for.
I can’t count the number of times I asked a dentist what they wanted and they responded with,” I want my practice to be successful, my team to be happy and my patients to be healthy.” It is a commonsense answer right? But as far as a vision, it is destined for failure.
Consider a practice that is focused on, energized by, and defined in relation to goals; then contrast it with a practice that doesn’t know what is missing or doesn’t know what they want. Naming what you want means you can begin to guide your practice like a ship toward a harbor light.
Tags: dental practice management, improving your dental practice, Leadership, practice development & growth, Practice Vision
