Time Out by Chris Barrow

If you had asked me, even 5 years ago, to describe the characteristics of my core clients and the work I'd be doing with them, I would not have guessed the reality in 2017: That there would be an 80/20 split in my client base.

• 80 percent would be microcorporates:
• Privately owned and funded (note the “and funded”).
• Trading from at least three locations, heading toward 10 or more locations through acquisition.
• Gross sales anywhere from £2m to £7m and increasing.
• EBITDA running between 15 percent and 20 percent.
• Building a senior management team through internal promotion and external recruitment.
• The founders a mix of dentists and non-dentists (often members of the same family).
• Founder dentists personally generating less than 20 percent of gross sales.
• A combination of NHS and private dentistry, all of them offering a mix.
• 20 percent would be single-site, owner-managed:
• Start-ups: associates looking to buy their first practice or open a private squat, of necessity with family funding.
• Existing owners who have hit a glass ceiling in sales/profit, marketing or recruitment.
• Founder dentist often generating 40 percent to 70 percent of total sales.
• Established owners who want to prepare for sale.
• EBITDA running between 20 percent and 30 percent.

The microchange in my client base has been the consequence of the macro changes in the UK dental landscape, indirectly brought about by the arrival of private equity and corporates into the sector.

My working life can be split 80/20, too.

• 80 percent microcorporates­— helping the owners with:
• Acquisitions: Identification, due diligence, purchase and integration usually the biggest challenge is after the purchase).
• Recruitment and training: Business development managers and salaried apprentice dentists
.
• Marketing: Creating robust internal systems that can operate across multiple sites.
• Team development: Establishing brand standards in customer service and communication.
• Digitisation: Assessing the financial value-case for hefty investment in digital dentistry.
• 20 percent working with the single-sites—helping owners with:
• Dare I say it? Surviving the physical and mental stresses of ownership.
• Creating a better balance between personal and professional time.
• Monitoring finances and ensuring that all fee-earners and activities are profitable.
• Marketing and team development: Like the 80 percent group, but with an emphasis on empowering the existing team to become involved in the internal marketing efforts.
• Sometimes encouraging and helping them take the leap toward the microcorporate—that all-important first acquisition.
• Working with single-site specialist referral practices on growing their referral database.

I am blessed by this variety—one day sitting around a boardroom table with owners and managers, discussing corporate strategy/tactics, and the next day offering a long-suffering, burned-out solopreneur a shoulder to cry on.

Of course, my experiences as I travel the length and breadth of the UK reflect the irreversible trend toward corporatisation in dentistry.

My role is to spot the trend and do my level best to pass on to clients what I can see from my viewpoint, and discuss how it affects their corporate strategies and/or personal career choices.

There will always be a role for the single-site practice, but it becomes more challenging each year to maintain profit margins as costs and competition escalate. There must be sufficient reward for the efforts involved—therein is the real challenge for independent practitioners.

Looking forward another five years, what do I see for 2022?

Well, I've already admitted that my answer to that question in 2012 for 2017 would have been mostly incorrect, so maybe I should just stop now and save any embarrassment?

Even so, I think there are some issues that are so glaringly obvious that we cannot ignore them—and others that are more speculative.

The glaringly obvious

• The inexorable progress of digital dentistry.
• The demographic inevitability of growth in the UK dental implant market
.
• The decline in average remuneration for general dental associates.
• The digitally savvy and connected patient, communicating primarily via smartphone.

The speculative

• The bubble bursting in the dental private equity market and the subsequent collapse of goodwill values.
• The transfer of ownership of macro-corporates from private equity to global health insurers.
• The necessity for dentists to specialise to maintain income levels.
• The continued exodus of single-site owners into microcorporate ownership.
• The dental equivalent of a PPI scandal, with failing short-term ortho and implant cases creating a consumer and regulatory backlash.

I'll make a note for 2022 and pop back for a look. Human nature is such that there will be winners and losers, whatever the future holds. The determining factor will be 80 percent attitude, 20 percent skill. Thus, it always was.

Whatever happens, provide my own mind and body are willing, I'm looking forward to the journey and to continuing my work with exceptional people who want a guide and mentor whilst plotting their course through unexplored waters.

Let the journey continue!