Introduction
1) Dr. Alan Wilson, a recent dental school graduate who just purchased his general practice
2) Dr. Carol Sullivan, a general dentist in the middle of her career
3) Dr. Leonard Richardson, an oral surgeon nearing retirement
Each of these practitioners faces different challenges, but these doctors are driven by one shared goal-achieving ultimate practice success.
Dental schools do an outstanding job of providing dentists and specialists the clinical training necessary to deliver exceptional patient care. However, few dental schools offer the in-depth business training required to successfully own and operate a dental practice. The business side of dentistry is where doctors face some of the greatest challenges. Fortunately, dentists have many opportunities to supplement their business knowledge and skills. Practitioners can attend continuing education seminars, read practice-management publications, speak with sales representatives, and hire consultants and advisors. The use of outside experts can help dentists and specialists:
- Increase efficiency and productivity through step-by-step systems
- Reduce stress through effective management and leadership techniques
- Generate greater profitability through increased production
- Increase the number of referring doctors through targeted marketing strategies
- Build greater wealth and reach financial independence earlier
- Recruit quality dental professionals to join your team
- Devise effective transition strategies that maximize your practice investment
Your dental journey is unique. You will be faced with many challenges along the way. Advisors can help you avoid the detours and reach your goals faster with less stress.
*These doctors are composites based on actual Levin Group clients.
Chapter 1: The Young Practice
Dr. Alan Wilson*
Age: 28
General Dentist
Suburban Practice
Years in practice: 0
The paint is barely dry on the walls as Dr. Wilson opens the doors on his first day of managing his own practice. The staff arrives, still uncertain of the daily routine. Soon after, the first patient arrives. The nervous staff gets the patient to the back, although it takes a little longer than it should.
As Dr. Wilson prepares to meet with his practice's first patient, many things are going through his mind. How can I make today a great day? And what about tomorrow and the next day? After all, it is an anxious, exciting time for him. Starting a dental practice is a huge undertaking, one fraught with many unknowns. Dr. Wilson has been giving a lot of thought to questions, such as:
- Will I be able to quickly build a patient base?
- Will I have enough revenue to pay my bills?
- Will I be able to train my staff to efficiently run the office?
- Should I enter managed-care programs to fill unused chair time?
- From the continuing education standpoint, which procedures and services should I pursue?
- Which services do I find fun and interesting? Will that change? Which services have a higher profit margin? What service or type of services will yield a much higher production per hour over the course of my career?
- How long will it take to get out of debt?
Your dental journey is unique.
You will be faced with many challenges along the way.
That last concern bothers him greatly. Like all young dentists, Dr. Wilson begins his professional career heavily in debt. He would like to pay off his debt as soon as possible, but his first concern is finding enough patients to build his practice. Although Dr. Wilson is receptive to the idea of consulting advisors, he believes he can wait until later before seeking the advice of a certified financial planner. "The best time for dentists to consult a financial planner is early in their careers," said Robert Graham, CEO of RG Capital**, a national wealth management firm with a division exclusively for dentists. "The earlier you get started, the longer you will be accumulating and building wealth."
Dr. Wilson has good reason to be anxious about his debt. His start-up costs are high-higher, in fact, than dentists of any previous generation. Unlike his predecessors, he discovered that banks were not as willing to lend money as they had been in the past. Interest rates are starting to go up, too-not a good sign for someone like Dr. Wilson with a six-figure school loan to pay off.
And, it's much more than the school loan that has set him back financially. He has invested in new technology and an upscale office décor to compete effectively with several established practices in town. In his personal life, Dr. Wilson has recently married and bought a new house-and his wife is expecting their first child. Financially, he is beginning to feel as if he is skating on thin ice.
In the midst of so many daunting factors, what should Dr. Wilson do to build his young practice? At this stage of his career, Dr. Wilson needs to concentrate a great deal of his efforts on the following three key areas:
- Vision - A Plan for the Future
- Goals - The Stepping Stones to Success
- Team Building - The Key to Reducing Unnecessary Stress
As Dr. Wilson moves forward in his career, he will discover that his work on creating a vision, setting goals, and building a core team helped establish a solid foundation for long-term practice success. With the right training and leadership, his staff will become a cohesive team that knows what to do, how to do it, and what the future holds. Dr. Wilson has ensured that he has many of the key elements in place to overcome any obstacles, turning each challenge into a success that will lead him to his ultimate goal-financial independence.
*Dr. Wilson is a composite based on actual Levin Group clients.
Chapter 2: The Established Practice
Dr. Carol Sullivan*
Age: 41
Dentist
Urban Practice
Years in practice: 13
It's Tuesday morning. Patients are starting to gather in the dental office reception area. The sun is shining and the day is young, but before she has even seen the first patient, Dr. Carol Sullivan is dreading the start of another typically hectic and stressful day.
Daily Sources of Stress
Just weeks before, the practice had lost a key employee- Sylvia, the office manager, who claimed that job stress and her family obligations were too much for her to handle. Other employees have also been complaining about the work environment. To make matters worse, with Sylvia gone, the practice has experienced an upsurge in uncollected payments and unsubmitted insurance reimbursements.
Designing and implementing more effective business systems and developing better leadership skills will enable Dr. Sullivan to create a more relaxed work environment for herself and her staff while increasing practice profitability.
Dr. Sullivan often felt torn between finishing a patient's treatment and running into her office to straighten out issues with insurance companies or double-checking how the front desk was doing. Even while she was earning a comfortable income, Dr. Sullivan could see that the stress was taking its toll. Retirement planning was on her wish list, but it wasn't a priority at this time. She had too much else going on. When she had analyzed her situation, Dr. Sullivan concluded that running the practice exactly the same way she'd run it in the past wasn't working as well as it used to. During the earlier years of her practice, things seemed to go extremely well, but now she was stuck in a rut and sometimes even doubted she had made the right career choice.
Action Steps for Change
Designing and implementing more effective business systems and developing better leadership skills will enable Dr. Sullivan to create a more relaxed work environment for herself and her staff while increasing practice profitability. To achieve her goals, Dr. Sullivan will work with her consultants and advisors to implement the following action steps:
- Create a clear vision statement of the practice's direction for the next five years.
- Analyze existing business systems (i.e., scheduling, communication, collections) to determine which are working and which are not.
- Redesign practice systems with staff feedback and written, step-by-step guidelines.
- Evaluate Key Performance Indicators (KPIs) to get an accurate picture of critical practice areas, such as production, profit, overhead, new patients per year, and accounts receivable.
- Script all patient interactions to create office continuity, a higher level of professionalism, increased case acceptance, and better customer service.
- Effectively delegate responsibilities to team members that can be trained to take over all nonclinical tasks.
- Coach the team with constructive feedback, role-playing, and scripting to develop individual strengths of staff members. Set new performance benchmarks for staff members to work toward.
- Start financial planning with an advisor to get retirement planning on track.
Day by Day a New Practice Emerges
As Dr. Sullivan updated her systems, she found that practice stress slowly began to decrease. Her team was motivated to make the practice a better place to work. Insights came from even the youngest staff members, and a newly reinvigorated team spirit was felt in Dr. Sullivan's office. Step-by-step guidelines and scripts were written for everything from front desk interactions with patients to the hygienists' protocol before, during, and after treatment. Dr. Sullivan began to spend more and more time chair-side, leaving the staff to handle nonclinical and administrative tasks.
For the first time in a long time Dr. Sullivan's practice was moving in a very positive direction. Financial independence was now a real possibility, and practicing dentistry was once again a source of enjoyment and fulfillment.
*Dr. Sullivan is a composite based on actual Levin Group clients.
Chapter 3: The Practice in Transition
Dr. Leonard Richardson*
Age: 55
Oral Surgeon
Suburban Practice
Years in practice: 26
Five years ago, Dr. Richardson was in a good place. His suburban OMS practice was generating more than $1 million in revenue. He had a good, long-term team in place. His relationships with referring doctors were excellent. He had worked with a practice-management consulting company that helped him redesign his systems for maximum efficiency- and that enabled him to take his already-successful practice to the next level.
On his 50th birthday five years ago, Dr. Richardson looked at his life and liked what he saw. He had been happily married for 20+ years. His two kids were doing well in high school.They were both involved in sports and extracurricular activities. Dr. Richardson was on a path to have his home paid off within five years. He and his wife had managed to save more than $2 million. He was planning to retire from full time practice in 10 years when he turned 60.
He loved coming to work. There were some bad days, but they were few and far between. Most days, the practice ran like a well-oiled machine. He seemed to have it all together.
Fast Forward Five Years
Practice production had dipped below $1 million for the second year in a row. Several new competitors with state-of-the- art facilities had moved into the area. These doctors were marketing their practices aggressively and targeting his patient base and his referring doctors. In addition, one of his top referrers decided to keep implants in-house.
Dr. Richardson had recently gone through a messy divorce. The last two or three years were just a blur. The stress at home had been incredible. He couldn't focus on work. He showed up physically, but mentally he had many personal distractions. His practice began to suffer. He didn't maintain contact with referring doctors as frequently as he once had.
He realized his goal of retiring by 60 was probably out of reach. He and his wife split their common assets. His share of the once-$2 million nest egg was now about $1 million. The investment portfolio he had attempted to manage himself hadn't performed as well as expected either. He probably should've made some adjustments, or better yet started to work with the financial planner his accountant had recommended, but Dr. Richardson's attention had been on other matters.
Financial independence was now a real possibility, and practicing dentistry was once again a source of enjoyment and fulfillment.
To get his practice back on track, there are four overarching areas that require Dr. Richardson's focus:
- Practice Management
- Practice Marketing
- Financial Planning
- Transitions and Recruitment
Practice Prognosis
The use of expert advisors is critical to professional and personal success throughout a dental practitioner's career. Dr. Richardson is facing several challenges as he winds up a successful OMS career. He needs to get his practice performing at the highest levels by updating his systems, training his team, and implementing an effective referral based marketing program. Obviously, a growing practice will attract more interest and a higher sales price than a practice in decline. How well his practice performs will affect his ability to save for retirement. Consulting with a certified financial planner can help Dr. Richardson clarify his goals and implement the right strategies to reach those goals.
As Dr. Richardson moves toward retirement, he should consider seeking the advice of recruitment and transition experts who can help him understand the various options for transitioning his practice and receiving the maximum value for his lifelong investment in dentistry. Although his practice hit a rough patch, with the right help, it is still poised for new growth and a return to greater success.
Conclusion
These three stories highlight the challenges faced by practitioners in different stages of their career. Whether you are at the beginning, middle, or nearing the end of your dental career, you face challenges that can prevent you from reaching your goals. The use of advisors can help you overcome those challenges and realize your full potential.
*Dr. Richardson is a composite based on actual Levin Group clients.
**RG Capital is a member of Levin Group's Life Plan Alliance.
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Call 888-973-0000 to schedule a time for your consultation. You can also e-mail your contact information to customerservice@levingroup.com with "Sidekick" in the subject line.