Why Dental Practices Fail, and What Michael Girdley’s 100 Business Failures Can Teach Dentists

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Categories: Practice Management, HR and Accounting;
Posted: July 19, 2026
By Howard Farran, DDS, MBA

Why Dental Practices Fail, and What Michael Girdley’s 100 Business Failures Can Teach Dentists

Most dental practices do not collapse because of one dramatic mistake. They decline the way periodontal disease progresses, quietly, incrementally, and often without pain until the damage is advanced.

That is the central lesson running through entrepreneur and investor Michael Girdley’s work, including his presentation, Lessons From 100 Failed Businesses, his ebook, Why They Win & Why They Lose, and the Acquisitions Anonymous podcast. Inspired by Charlie Munger’s habit of inversion, Girdley asks a different question from most business advisers. Instead of asking how to build a great company, he asks what could kill it.

For dentists, that question is far more useful than it sounds.

A practice rarely fails because the doctor suddenly forgets how to diagnose, prepare a crown, or place an implant. It fails because small weaknesses accumulate. Collections slow. Payroll rises. Treatment acceptance slips. New patient flow softens. Team members stop speaking candidly. The doctor becomes the only person who can solve every problem. Meetings multiply, but decisions do not. The practice remains busy, yet cash becomes tight.

By the time the owner recognizes a crisis, the real causes may have been building for years.

The first warning sign is distance from the patient. Successful practices solve problems patients understand and value. They explain disease clearly, connect treatment to comfort and function, and deliver an experience patients would miss if the office disappeared. Weak practices become absorbed in themselves. They focus on technology, production targets, insurance rules, or internal politics while forgetting the patient’s basic questions. What is wrong. What happens if I wait. Why does this cost so much. Can I trust you.

Case acceptance is not primarily a sales problem. It is usually a clarity and trust problem.

The second lesson is that revenue is not the same as business health. A practice can post record production while losing financial strength. Collections may lag. Lab costs may climb. Hygiene may run below capacity. Marketing expenses may rise faster than new patient value. The doctor may add procedures, providers, or locations without understanding whether each one contributes durable cash flow.

Girdley’s framework forces owners to separate impressive numbers from sustainable economics. Production is encouraging. Profit is better. Predictable cash flow is what keeps the doors open.

This is especially important in dentistry because growth can hide weakness. A second office, a larger building, another scanner, or a new associate may look like progress. But expansion built on debt, thin margins, weak scheduling, or poor leadership simply spreads the same problems across a larger surface.

Bigger is not automatically better. Better must come first.

Another recurring theme in Girdley’s work is incentives. Organizations usually produce what they reward. If the front desk is judged only by a full schedule, it may pack the day with low value appointments and ignore collection quality. If hygienists are measured only by production, patient trust may suffer. If associates are rewarded for volume without regard to outcomes, diagnosis may become inconsistent. If the doctor praises heroic last minute problem solving, the team may never build systems that prevent the crisis.

Every compensation plan, bonus, scoreboard, and public compliment teaches the team what truly matters.

Complexity is another quiet threat. Dental practices often add forms, policies, software, vendors, meetings, reports, membership plans, technologies, and service lines without removing anything. Each addition appears manageable. Together they create friction. The team spends more time navigating the practice than serving the patient.

The answer is not to avoid complexity entirely. Modern dentistry is complex. The goal is to earn complexity. A new system should improve diagnosis, communication, efficiency, margin, or patient experience. If it does none of those things, it is probably clutter.

Leadership determines whether problems surface early or remain hidden. Healthy practices make it safe for employees to deliver bad news. They want to know when patients are confused, when claims are aging, when schedules are breaking down, and when a new technology is slowing the clinical day. Unhealthy practices punish candor. Team members learn to protect the doctor from reality, and the owner begins making decisions from incomplete information.

This is where Girdley’s premortem becomes practical. Imagine the practice failed three years from now. What caused it. Excessive debt. One dominant insurance plan. Dependence on a single producer. Poor hygiene retention. Weak collections. Inconsistent diagnosis. Rising cancellations. An irreplaceable office manager. A doctor who could not delegate. A team afraid to speak honestly.

The exercise works because most owners already know where their vulnerabilities are. They simply have not named them.

Girdley’s model does have limits. It is built largely from the perspective of buyers and operators, so it naturally favors predictable, understandable businesses. Innovation often looks inefficient before it works. Amazon, Tesla, SpaceX, and OpenAI all appeared irrational by conventional acquisition standards at various stages. Dentistry also needs experimentation. New clinical workflows, artificial intelligence, same day dentistry, and alternative payment models will not emerge from caution alone.

The lesson is not to avoid risk. It is to preserve optionality. Keep enough cash to survive mistakes. Limit debt that removes flexibility. Run small experiments before making large commitments. Decentralize decisions where possible. Abandon weak ideas quickly and expand strong ones carefully.

The most durable dental practices are not perfect. They are observant. They stay close to patients, protect cash, simplify where they can, align incentives, develop leaders, and correct small problems before those problems combine into something fatal.

Business failure is usually boring. So is prevention. If your practice disappeared three years from now, what would have killed it?

Join the Conversation!




Why Dental Practices Fail, and What Michael Girdley’s 100 Business Failures Can Teach Dentists


Why Dental Practices Fail, and What Michael Girdley’s 100 Business Failures Can Teach Dentists


Primary source

Michael Girdley. Lessons From 100 Failed Businesses. SMBash, The National Entrepreneurship Through Acquisition Summit.
https://smbash.com/agenda/keynote-address-by-michael-girdley

Books and newsletters

Michael Girdley. Why They Win & Why They Lose: Six Forces That Shape Every Business. Girdley’s Letter.
https://newsletter.girdley.com/whytheywin

Podcast

Acquisitions Anonymous. Michael Girdley, Bill D’Alessandro, Mills Snell, and Heather Endresen.
https://www.acquanon.com/


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