Penny Reed - Growing Your Dental Business
Penny Reed - Growing Your Dental Business
Ready to sharpen your focus as a dental business owner and accelerate your results? The Growing Your Dental Business Show is designed to give dentists the tools they need to create optimal results and profitability in their practices.
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Penny Reed
Penny Reed

Growing Your Dental Business - Where Do I Start?

Growing Your Dental Business - Where Do I Start?

1/2/2017 12:41:50 PM   |   Comments: 0   |   Views: 186
Welcome to the introductory session, Episode One, of the Growing Your Dental Business Show podcast.  I am so excited to have you join me on this journey.  Where should you start? In this session, I cover the Five Keys to Growing Your Dental Business as well as what you can expect in future episodes.  
Where Do I Start?

Checkout the Transcript below, or to download the transcript, click here


5 Keys to Growing Your Dental Business

 

Welcome to the first session of the Growing Your Dental Business Podcast.  I’m your host, Penny Reed. 

It doesn’t seem not long ago that I began my career in dentistry.  Back in 1992, I had been in management with Wal-Mart.  My dentist approached me and asked me to come and manage his practice.  I was pretty excited.  I mean, after all, even with my IT job with Wal-Mart and then in the stores, I worked a lot of hours and many of them were in the evenings and on weekends.  So I thought, this is awesome, no nights, no weekends, no stress.  But dentistry had its own set of stressors as I learned from going to work in what was already a thriving practice. 

There were no manuals on how to grow a practice.  I kept looking for the practice growth manuals and about all we had was an old textbook from when my dentist went to school.  So we started out on a journey of working toward growing the practice.  He shared numbers with me.  We really buckled down.  We tried harder for several months without a whole lot of results. So what we found was we couldn’t get there alone. 

We sought the help of industry experts and we got the team on board and in a short period of time, the results were remarkable and I was hooked.  I thought, wow, so many other practices are probably going through some of the same struggles that we were at that time and I want to help them, too.  So I replaced myself as his office manager and with his blessing, I began my journey as a dental consultant.  That was in 1994. 

Well, I think it would be silly to say that not much has changed since 1994 when many things have changed since 1994.  Even as a consultant, it became more challenging to help practices grow.  And so I began to really think about what needed to happen to help dentists, dental business owners, and the teams be more successful.  And specifically one of the motivators for me a few years ago was realizing the trend that was happening in dentistry for dentists with their income.  And I realize that many of the listeners may not be a dental business owner; however, I know you want to be part of a practice that is growing and profitable because a practice that isn’t growing and isn’t profitable has no room to share greater rewards with the team.


 

And specifically one of the stats that I’m speaking to is the dentists’ earnings that were published by the American Dental Association, one of the most recent studies that they published, which was through 2014, and I know that’s two years ago, but for this sort of data, it’s fairly relevant.  And what it showed was from 2005 specifically to 2014 that the average dentist general practitioner’s income dropped by 20%.  So I’m not talking about practice income but their take-home pay before taxes. 

Now, whatever your role may be listening to this podcast, whether you are another consultant or a dental business owner, associate, hygienist, administrator, assistant, fill in the blank, it’s not very exciting to think that you would make less for doing the same amount of work than you did years ago.  It’s pretty -- pretty disheartening.  So here are some of the trends that we’ve got to get past and adapt to. 

We are facing more PPO and insurance participation than ever before, making being a fee-for-service practice not impossible but even more difficult.  It can be done, but those practices are more and more rare.  There are also more and more dental students who aren’t planning to own a practice, either that or they’re delaying that practice ownership.  In addition, it’s more difficult for them to get loans. 

We’re also finding more dental business owners, whether it’s one location or multiple locations, looking for those new graduates.  The competition there is pretty intense.  Also, patients are having to pay more out of pocket for dentistry than ever before, and that’s not a trend that will likely stop.  So we’ve really got to work on helping patients create their “want” for great dentistry.  We also have more competition from not only corporate dentistry but also the small business that might have several locations.  So we’ve got to be at the top of our game when it comes to managing our dental business. 

It was interesting, several months back, I bumped into a previous client and he said, you know what?  It’s kind of funny that we bumped into one another because one of my action items was to contact you.  And so we wound up scheduling a coffee and visiting with him and his business partner and office manager and their primary objective in talking with me was, can you help us get reimbursed more from our PPO?  And, well, like any consultant or person in the line of work of what I do, you always want to be able to tell people, yes, you can help them with that.

And what I had to say was, while I wish I could tell you that I could help with that, the competition with the PPOs, it’s decreased.  You know, it used to be that the insurance companies were willing to bend over backwards to get you to participate with their plans.  Now they have more plan providers.  So not to say that there isn’t a little bit of wiggle room in there for negotiation, but it’s supply and demand.  If they have more providers in their area than what they need, there’s going to be little room for negotiation. 

So as we talked and the conversation continued, as you can imagine, and maybe you’ve been in this place before, too, it’s very frustrating not to be compensated what you’re used to being compensated.  It’s different if you’re starting out in practice and you never knew what it was like to get that full fee in the first place.  It’s just you don’t have that feeling of frustration. 

So I shared with them – it sort of hit me, an epiphany, that it’s a little bit like the serenity prayer, if you’ve ever heard that or read that – Grant me the serenity to accept that the things I cannot change – well, I inserted “in dental business” – the courage and the knowledge to change the things in my practice that I can and the wisdom to know the difference.  And that is really the essence behind this podcast as well as a book that I recently published called Growing Your Dental Business

It doesn’t focus on the things we have no control over.  It focuses on how to grow our practice in a measureable way without breaking the bank, without having to – unless we seek out that help and support which no one truly achieves greatness alone, right?  You need your team to help you achieve those goals.  You need industry experts, whether it’s in technology, practice management, investments, to truly help you be successful.  Just like a professional athlete, when you think about those teams, they don’t need a coach to tell them how to play.  They have tons of experience, but it’s that perspective not being in the playing field to allow others to see what’s going on in your practice and really help you. 

So many of the areas that we’ll cover will fall under these categories.  One is when I’m asked what really sets a practice apart, it really starts with the culture of the practice.  And what I mean by that, in my mind, the definition of culture is it’s the personality of the business and it’s really set – the tone is set by the owners, which are usually the dentists in most states, their vision, their expectations, and also their ongoing coaching of the team.  An annual employee review doesn’t necessarily give your team member a clear picture of what it is that they should or shouldn’t be doing.  Now, I do believe in those greatly, but giving that ongoing coaching is huge. 

Also, team selection and training.  If you have somebody that is not capable of doing a job or position that you have or maybe if they don’t have a great attitude, often I will share with my clients I wish attitude was something that I had the ability to change because if so, I would have a talk show and probably would be conducting their conference call while lying on a beach somewhere in a beach chair under an umbrella with a drink that I’m sipping on out of a coconut with one of those little straws and an umbrella.  We can only control our own attitude.  So selecting people that are willing to do whatever it takes and think positively is huge. 

And then also the team code of conduct, how the team agrees to work together and hold each other accountable in a kind way.  When you think about championship teams, they do their best and they also expect the best of others.  Also, when we’re deciding where we need to start to grow our practice, the numbers will really tell us that.  And I’m going to go into some specific areas of practice growth that really make a difference in your practice, but we have to know our numbers, not only our overhead also our dollar value per chair.  And in future sessions, we will talk about how to calculate that.  And these numbers have to be measured and shared consistently. 

And the easiest rule of thumb is you should share as many statistics as you are comfortable with, with your team.  They likely, if you’re a dental business owner, think that you make more money than you already do and they may not realize the pressure that you’re under.  And really when we think about it, it’s not just the business of dentistry that’s faced a lot of pressure in the last decade, let’s say since 2007.  I know many friends who have been laid off or downsized or have even had pay reductions and those are not fun conversations nor are they anything that I really want to visit in a dental practice.  I want to focus on practice growth.  

So there are really 5 key areas in growing your dental business.  And the first one, not necessarily in order of importance, is a healthy flow of new patients and that’s usually where most practices will start.  You know, they’ll focus all of their energy around new patients, which it is very important.  So where we really want to start with new patient growth, I love advertising.  I’m just sort of a nut. You know, I love creative ads and websites and things like that, but really new patient attraction is more marketing.  It’s communication, how we answer the phone, what our practice looks like, can our signs be seen, are we visible in the community, how do we handle that patient’s question on the phone about their insurance.  And first and foremost, we have to realize that hiding behind – and I love the internet and I love Facebook, but we’ve got to be social even in our presence that’s online.  So increasing new patients.

And next is being sure that our active patient base – and I would say this is going to be true in most cases, 90 percent, 95 percent of the time.  We do not want to shrink that active patient base.  Now, if perhaps we’ve been participating in Medicaid or there is a PPO or a DMO that we just have determined through running the numbers we really don’t need to be on, this could show a downward trend for a short period of time if we do get off of a participatory plan, but that should be short term. 

The third key in growing your dental business is to increase hygiene membership.  Now, we used to refer to this as our recall or recare effectiveness in hygiene and I rebranded that, at least for my clients, because I want them to think about – and this is for the general practices, pediatric, and also perio, which for the periodontal practices that are tuning in, I will say this:  You do want to be sure that you are sending your patients, ideally, every other recare visit back to their general dentist.  It not only is good for the patient, it’s great to keep harmony with your referring doctor. 

So hygiene membership is the percentage of your active patients that are coming in regularly for their hygiene recare visit.  And what we’re seeing happen with some insurance plans actually is they might only be covering one of those visits a year.  So we need to be clear and specific with our patients.  And, doctors, your team members can prompt you to have this conversation while you’re chairside to let them know why it’s important for them specifically to come in at the 6-month, 4-month, or 3-month recare sequence that you recommend.  The more patients that we see in hygiene, the more revenue – potential revenue that we have not only in hygiene but to drive in operative.

The fourth key to growing your dental business is efficiency.  And when I first put this together, I called it “scheduling smarter,” which that is a component of efficiency, but it really boils down to many more things than that.  Most of us, for example, when we get a new dental software or there’s an update, we learn just enough to survive, right?  I still remember when our office had the paper records and I can remember the DOS based dental software program, which some of you listening to this may not even know what that is.  You could google that.  But the more efficient we are, the quicker that we can be effective with whether it’s CAD/CAM technology, the intraoral camera, or actually charting, the easier it becomes to get our jobs done.  Also, doctors, hygienists, looking for ways to delegate procedures especially if you are working out of more than one chair.  So increasing our efficiency. 

And last, but definitely not least, is increasing our case acceptance.  That’s the fifth key.  And regardless of the specialty that you’re in, the better we are at communicating, at giving a clear picture of the patient’s condition, which I think visuals are the best.  The better we are at doing that, the fewer people that we actually have to present to in order to reach the numbers that we need to reach to have a healthy practice.  And the practice of dentistry is definitely not all about numbers, but if we don’t have the profitability that we need in place, then not only are we stressed out but we run the risk of becoming extinct. 

So going back to these 5 keys to growing your dental business, one of the things that I discovered in running the numbers and really putting this message together is if in the areas of the first four keys that I mentioned, new patient growth; increasing active patients; growing our hygiene department membership; increasing efficiency, which could be scheduling smarter for that example, if we increase each of those areas by 10% in our specific practice and then case acceptance, if we’re able to get one more out of 20, yes, it’s okay, 5%.  If we do all of those things and you can run the numbers in your practice with this, it doesn’t matter if you have a practice that is producing $700,000 a year, a million, four million, ten million, the math still works.  So 10% in each area and then 5% in case acceptance, you will grow your practice by 25%. 

And so truly the message of this podcast series will be to show you exactly how to do that and to bring in not only industry experts but new methods to help you accomplish that in your practice.  And really one of the things that I want to leave you with in this introductory session is to think about what you believe is possible when it comes to growing a practice.  Often our limitations reside between our ears.  They’re in our mind.  Maybe we think it’s not possible to be profitable, it’s not possible to achieve the levels that we need to in our practice to really be able to grow to give our team raises or bonuses, for us to be able to make a great income, set money aside for retirement, and remember that dream that we had when we first came into practice. 

So my commitment to you is to share best practices on making your dental business more successful.  In doing that, not only in the topics that I share with you but also in the guests that we bring.  If you have someone in mind that you would love to hear me interview, please be sure to share that and to download a transcript or learn more, visit www.growingyourdentalbusiness.com and be sure to click on the podcast tab.

Until next time, make it a great one!

 

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