Almost 33 years ago—on Sept. 21, 1987—I opened Today’s Dental. I had graduated in May and it took me just 133 days to find a place to rent, build out a dental office and open to the public … right before the stock market collapsed. Oct. 19, 1987, saw the biggest one-day percentage loss in the history of the Dow Jones Industrial Average: 22.61%, a record that still stands today and is nearly double the second-biggest drop on record (12.93% on March 20, 2020).
My three new employees—an assistant, a hygienist and a receptionist—all panicked and said, “What are we going to do?” I laughed and said, “Are you kidding me? People will still have teeth and need a dentist a million years from now.”
“The Cool Out”
We started Dentaltown in 1999, and the first thing we set up was free classified ads. It’s one of the neatest sections on the site. Usually, there are about 1,000 ads from dentists trying to sell their practices and about 5,000 ads from dentists looking for associates to help them out.
Then came the coronavirus. When 40 million Americans lost their jobs, about 30 million also lost their dental insurance, which means dentists really won’t be hiring new associates for a while.
Now, instead of 1,000 dentists selling their practices and 5,000 posting jobs, we’ve got 2,000 dentists selling their practices and only 1,000 posted jobs. I spent a day combing through those posted jobs recently, and most of them were posted by DSOs. They may have staff turnover and people problems, but because they know their numbers so well, they’re the ones thriving right now.
Who’s selling their practices, then? If you’ve never been divorced, you can retire from dentistry by age 60. (Get divorced one time and you’re going to push that back a decade. Get divorced twice, you’re going to die at the chair.) All of the older dentists who held on to their spouses are looking at advisers today and saying, “Did you just ask me if I’m going to put in UV lights and negative-pressure rooms? No way—I’m selling the practice. I’m outta here.”
Back when I graduated from dental school, new grads either bought a practice or opened their own. Nowadays, new dentists aren’t comfortable with that—they’re a little spineless. I always say, “OK, but you’re a licensed doctor, so you’re not going to like anybody you work for.” Because doctors think they know everything, and even if a 25-year-old dentist goes into practice with his 65-year-old mom, they’re not going to agree on which gloves to use, let alone bonding agents or root canal files.
I got into a dental office with no money down. I was in Wichita, Kansas, but I’d done my research and knew that Phoenix was exploding in population. When I got here, it was obvious where the city was growing because unlike cities like Chicago or New York that are against a barrier—a lake, an ocean, a mountain—Phoenix spreads out as flat as a pancake. All I had to do was go to the “ring around the rosie”—I was literally at the outside edge of the city back then.
I found a 16-acre strip center that had a grocery store, a pharmacy, a bank and some restaurants, and asked the owner how much it’d cost to rent 1,000 square feet. The answer: $15 per square foot per year. I didn’t know how to build out the space, so I offered to pay $20 per square foot for five years—and with that extra money, he would do my build-out. I knew he could do that work in half the time and for half the money that it would’ve cost me.
“Play to Win”
Up next: dental supplies. I picked out state-of-the-art equipment for two operatories and I’ll never forget the number, because it was almost the same as my student loan debt: $86,000 for everything—air compressors, vac, everything I could ever want.
The sales guy said, “We’ll need a check for 86 grand,” and I said, “Unfortunately, I don’t have a dollar. So let’s divide that by 60. I’ll make monthly payments for five years, and after the last payment, I’ll own everything.” He said, “We’d rather have the money in cash,” and I replied, “Would you rather have something or nothing? Because right now, you’re getting nothing. But if you do this, you’re going to get something.” They had to think about it for a week, but they eventually said yes.
That whole process took me 133 days, but new dentists today will spend 133 days just shopping for the world’s smallest violin so they can play it every day: “I’m a pandemic dentist. I don’t have any opportunity; I’m a victim.”
You are not going to find a non-DSO job in 2020. I bet you’re not going to find one in 2021, either, because I’m sitting here in 2020 with 20/20 vision. Meanwhile, there are 2,000 dentists on Dentaltown trying to sell their practices.
“Movers and Shakers”
If your next sentence was going to be, “But the banks require dentists to practice for a year before they’ll consider a loan,” it’s like you spend all your time thinking about supporting your decision of “no.” It’s total negative cognitive dissonance.
In the 1980s, banks didn’t even have divisions to purchase dental practices! The practice owners would carry, which I think is a far better system because if you sell through a big bank, the selling dentists are going to take that check and just disappear. But when they carry the loan, they’ve got skin in the game: They’re vested in seeing you succeed. Every time they go to the grocery store and someone says, “I heard you sold your office to that young whippersnapper. Is she any good?” their answer is going to be, “Damn right she’s good—she’s the best! I could have sold it to a thousand dentists, but she’s the one I picked.”
“Do It Now”
Now is also a good time for a new type of market differentiation.
About half the U.S. market buys dentistry as a commodity. They base on price: If their insurance only works at Dr. X’s office, they’re going to her office, and if Dr. Z sends them a long letter about how he’s better in all these ways, they’re like, “Yeah, but my insurance only works at Dr. X, so we’re sticking with her.”
The other half of the market, though, is open to the value add. Some will pay more for composite fillings instead of amalgam. They’ll spring for restorative work that insurance might not fully cover. They buy whitening.
In addition to the aesthetics-based value add, there’s now an opportunity to promote disease-control dentistry: Position your practice as having a “one-patient-only” policy for people who are particularly concerned about, or at risk for major health concerns if they contract, coronavirus.
You could tell them, “When you come in, it’ll just be me, you and an assistant.” If at the screening appointment you discover the patient needs more work, say, “OK, you need two crowns, a root canal, four fillings, the cleanings and an X-ray. Your total treatment would cost $2,500 and if you pay that right now, we can go up front and schedule your own three-hour appointment. It’s going to be just you; you don’t have to worry about the crowds and catching it from other people in the waiting room.”
When you’ve got no options, you’ve got to make them. So make something happen!