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Howard Speaks: On Retirement and the Damned Economy Howard Farran, DDS, MAGD, MBA, DICOI; Publisher, Dentaltown Magazine

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On Retirement and the Damned Economy
– by Howard Farran, DDS, MAGD, MBA, DICOI, Publisher, Dentaltown Magazine
After one of my recent lectures, I was shooting the breeze with a few doctors and we got on the topic of retiring in this putrid economy. One of the docs said, “Y’know guys, I went to a funeral the other day and I thought about that phrase, ‘Nobody on their death bed ever says they wish they would have spent more time in the office.’” This elicited some hearty chuckles, but I thought, “Are you freaking kidding me? That’s exactly the opposite of what every meaningful person ever said on their deathbed.”

I mean, do you think Mother Teresa would have said, “Man, I wish I didn’t spend so much time working in the orphanage. I wish I didn’t take so much time caring for the sick and the dying, and raising money for my mission of hope,” on her deathbed? Most spiritual leaders say the way to serve God is to serve your fellow man, and the more you serve your fellow man, the more you serve God. Guys, you’re health-care providers! You’re not out there selling something someone doesn’t need. When you’re doing dentistry faster, easier, higher in quality, lower in price, you’re serving your fellow man. You need to stop thinking about when you retire, and think more about how you can better serve your patients!

OK, spirituality aside, you’re all aware by now that we’re in the middle of an economic contraction. Things aren’t looking too good. In fact, things aren’t going to look any better until we have at least one balanced budget. It bothers me when economic Neanderthals constantly claim the U.S. economy is growing one-and-a-half to three percent a year when the national debt is more than $15 billion. Things need to get worse before they get better. When I was a freshman in 1980, interest rates were around 21 percent. If we endure another round of inflation, a 21 percent interest rate will probably be the absolute minimum (which if you have an adjustable rate loan with floating interest, you’d better tie that sucker down ASAP). And you’re thinking about retirement? Guys, here’s the bottom line: It’s time for an attitude adjustment.

One of the ideas you have to get rid of is you’re not going to retire at 55. You’re probably not going to retire at 60, or even at 65. But even more – why would you want to?! The most fun and exciting people I meet when I go out and lecture are dentists who are 70 years old and they’re still going strong; they still love what they’re doing. Sure they might have cut back from five days to three or four days a week – but they’re still really into dentistry. The days they do work, they make a hell of a lot more money than they would on the interest of their retirement savings account. When you’ve been a dentist that long, you know just about all there is about your patients’ mouths. You’re pumping money into your 401(k) in hopes to retire by 60, but that’s working against you. Seriously. Yes, it’s pre-tax savings, but right now we’re seeing the lowest tax rates in 100 years, and it’s a certainty that when you pull the money out in 10 or 20 years, the tax rates will be twice as high. A 401(k) doesn’t make sense.

You need to find a way to keep working and the way to do that is to keep enjoying what you do. Look at Sam Walton, the founder of Wal-Mart and Sam’s Club. He found a way to sell all of the big brand names like Sony and Hitachi and Coca-Cola with a low-cost distribution model. He had multiple myeloma at the end of his life. Instead of lying around feeling sick, he’d fly from his office in Bentonville, Arkansas, to Houston, Texas, to get his chemotherapy treatments, and then fly back to Bentonville to continue working. The man died a billionaire – and he died at his desk doing what he enjoyed doing. He saw his work as a mission.

Another attitude you’re going to have to beat is running your practice the way you’ve always run it. In this great contraction you need to have lower prices. You’re going to have to increase your marketing and add new products and services.

Every time the Earth goes around the sun, you give your staff another dollar-an-hour raise, and you end up raising your prices five percent. You have to knock that off. In this contraction, you need to freeze wages, and maybe the next time our planet goes around the sun, you’re going to have to lower your prices five percent. This means you might even have to go back and join dental insurance plans. People are going to buy only what they really need or really want to buy. If they can’t get their dental work taken care of with some supplemental insurance help, they might not do it (they’ll even shop their treatment plan around to other dental practices and go with the cheapest office).

Marketing-wise, if you don’t have an awesome Web site by now, you’re not even trying – hell, you’re not even paying attention. You should be search-engine optimized so you show up on the first page of Google results, you should be buying Google ads, you should have a Facebook page, and you should be buying Facebook ads.

You should be adding new products and services. Get a 3D CBCT machine and start placing single root form implants. Go to an orthodontics course and learn how to do simple ortho. Learn Invisalign. There’s a bunch of sleep dentistry groups that treat sleep apnea and snoring. Go sign up to make all the mouthguards for your high school football team. Do something!

It’s also important you start lowering your costs. So, quit doing gold. If an insurance company is only going to give you $1,000 for a crown, you can’t afford a $250 gold bill for a full gold crown. This is challenging to people because they believe in phrases like, “Treat other people like you want to be treated.” I have seven restorations in my mouth and they’re all gold. But I can’t do that for all of my patients. I’m not getting a raise from the insurance company and the price of gold has doubled. I can’t do full gold. Neither can you. So instead of a lab bill, invest in CAD/CAM technology.

Right now, I feel really bad for people who work in the luxury business. The sales of Fairline yachts, Cadillacs, Porsches, high-end steak dinners, Louis Vuitton purses and Barker Black shoes are going to plummet. You’re even going to see the profits of midlevel restaurants like Chili’s and Olive Garden shrink while the profits of Taco Bell and McDonalds grow (a $5 lunch looks better than a $15 lunch to just about anyone these days).

That being said, I live in Phoenix, Arizona – one of the most saturated markets in dentistry – and I could give you the names of almost 100 dental offices in my backyard that have gone under. They were part of two groups. One group was the high-end, cosmetic, metalfree practice that would replace all your fillings with tooth-colored restorations. They dealt in bleaching and veneers – and now they’re gone. They quit doing bread-and-butter dentistry like root canals and crowns; they didn’t know how to make a denture, they didn’t pull teeth, they couldn’t dig out a wisdom tooth, they couldn’t do minor orthodontics. Everything was elective, and patients elected to do something about their yellow, crooked teeth some other time.

The other group of practices that went under was start-ups. Start-ups went under because new-patient flow is down coast-to-coast. Even practices that are flat or growing five or seven percent every year are still facing low new-patient flow. It used to be you’d open a practice, do some marketing, buy an ad in the Yellow Pages, do some targeted direct mail and you’d fill your office up with patients. That’s not working anymore. Practices that have been around for 15-20 years and have good word-of-mouth referrals, solid reputations and high marketing budgets are going to take most of the patients in the area.

This contraction isn’t letting up any time soon, gang. It’s time we all realized we’re in this for the long haul and we need to remember to return to our core competencies, stop thinking about retiring at 55 or 65 and make it a point in this new year to lower your costs, increase your marketing, add something new to your dental armamentarium and lower your fees.
Howard Live
Howard Farran, DDS, MBA, MAGD, is an international speaker who has written dozens of published articles. To schedule Howard to speak to your next national, state or local dental meeting, e-mail colleen@farranmedia.com.
February 17 • Tarzana, CA •  Southern California Oral/Facial Study Club
818-996-1200 •  Stephanie@sccofs.com •  www.facebook.com/pages/SoCal-OralFacial-Study-Club


April 21 • Destin, Florida •  Excellence in Dentistry
eid@theprofitabledentist.com •  www.theprofitabledentist.com


March 2nd and 3rd, 2012 • Birmingham, UK •  The Dentistry Show
www.thedentistryshow.co.uk
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