Work on your business not in it.” Michael Gerber. Author of The E-Myth
When you are the owner of a dental practice, you are also the owner of your own business. Most dentists I know are very talented artists and get an “A” in science. However, understanding how to work on your business is not at the top of most dentists “to do” lists.
When you own a dental practice you have added responsibilities. You have business expenses to be concerned about, daily and monthly reports to view, taxes to pay, a profit and loss statement to review with your accountant and the list goes on and on. I believe and hope that you are concerned about your bottom line and your net profits.
“It’s not how much you make, but how much money you can keep.”
As a dental practice management consultant, I see many dentists struggle with the above mentioned responsibilities, so in this blog I will talk about the 5 must have’s for a successful dental practice.
“There is a difference between a good business owner and a great business leader.” You don’t have to be born a leader but you must have an open mind to learn how to lead.
What does it mean to be a great business leader?
- A leader never uses the same method of leadership. They will always be open to using different methods and styles to reach a goal.
- As a leader you must have the same objectives as your teammates (and they must embrace the business owners goals as well) and, you must encourage your team members.
- The great leader knows how to speak to his/her team.
In order to have a great team, when you are the leader, you must understand your team. You must nderstand the various personality styles of your team. Know what keeps them feeling inspired and motivated to do their best.
2. TEAMS OF GREAT LEADERS
People are the mitochondria – – the powerhouse of your business. Great business leaders will understand who they should recruit and hire for their team. Successful dental practices will have a written system to train all team members. The leaders of great teams share their vision for the business and engage the team members in the vision and mission of the dental practice. The great leaders of successful teams will share their business code of ethics (Similar to the Ten Commandments). This will lead the team in a way that everyone including the clients you serve, know what they can expect, when they are in the office. Great leaders will be able to develop passionate teams.
When guiding successful teams I have found what will maximize profits in the business. These teams will have the following:
- Written Standards: A professionally designed Human Resource Manual.
- Written Communication: I have worked with doctors who say they want to provide excellence. What does this mean? How do you communicate excellence to the patients you serve? Provide scripts for the team in order to accomplish your goal and expectations to provide excellence.
- Provide the Experience: If you want to create a Ritz Carlton, five-star experience, you can waste hours talking about creating the experience. Whatever the brand is that you want your business to portray to patients; if it is Ritz Carlton, take a trip to a five star spa or hotel to personally experience this brand you want your patients to experience.
- Attitude Affects Performance: How do you arrive to the office each day? Do you great the team with a “Good morning” and genuinely begin the day at the office with a smile on your face? As the leader of your team it does make a difference when you begin with a positive. You are more likely to have a great day when you begin with a great attitude. Leave personal problems in the parking lot.
- Conflict Resolution: Your motto should be “Resolve it now or take it somewhere else.” This means you will not permit tension or an environment of hostility. If the employees cannot resolve their conflicts, they need to find a new place of employment.
3. DENTAL PRACTICE PROFITS
I enjoy playing tennis. If I could earn enough money to live on playing tennis, I would have chosen this career. Iwas never able to be a USTA Top Ranked player so I knew it would not be a viable career for me. However, I always enjoy my time on the court!
Have you ever seen a professional tennis player who did not enjoy the game of tennis? It is the same thing with dentistry. If you and your team enjoy serving your patients, you are more likely to have a successful, sustainable and profitable dental practice.
Know your Numbers: All successful leaders know and understand where their money is going. There are four specific areas money is spent in the dental business:
What you pay your team should not exceed 33%.
- Lab costs
These costs should not exceed 15%.
Your supplies should not exceed 8% of your total expenses. Shop around to maintain the best quality and benefit for what you are paying.
- Lease, Rent, Facility Costs
The expenses of your facility should not exceed 8%. There are some reasons this may be higher but the operative principle or standard is 5-8%.
The above numbers will guide you to keep your overhead under 60%.
Fees: To keep your overhead level, your practice fees should be in the 80th percentile. This is based on yearly reports. The higher your fees, should mean less overhead and the greater your profits will be. If you are a specialist, your fees should be in the 90th percentile.
Collections: Always set your goal high. No less than 98% should be collected each month. The longer a patient owes money, the less likely you are to be paid. When your collections dip below 98% create a plan to immediately work on collections until they are back on track.
4. TRAINING TO GET TO THE NEXT LEVEL
Many dental practice owners have been sitting around wringing their hands, scratching their heads, hiding their heads in the sand, wondering what to do about the economy.
The answer to this is “Create Your Own Economy!”
Does the above describe you? Talk to your sales rep, attend CE Courses, and/or meet with your team to discuss new services you can offer your patients when 2014 arrives. One more way to get to the next level is to pick up the phone and call a dental practice management consultant, an expert. Schedule a complimentary -no-fee- look at your numbers and true potential.
These are a few suggestions to get to “that next level” in your dental business.
Invest in your team and your practice on an annual basis, not every ten or twenty years. Let your patients know that you invest in your team and practice. Tell your patients that you always stay abreast of latest technology, science and services to offer them the highest level of care.
5. KNOW WHAT YOUR PATIENTS WANT
When was the last time you surveyed your patients? Do they want dental implants or BOTOX services? How many patients of yours want tooth whitening procedures? Do you ask the magic question(s) to discover what patients really want?
AND do you know the correct questions to ask so you know what patients want? If you never ask, the answer will always be “NO”.
Do you know how to ask questions so patients can tell you what their burning desires for beauty and health are? What are specific words that you can say and discover what patients want from your dental office?
Owning a successful dental practice mean you understand what it means to offer the best customer service, creating an outstanding patient experience, and offer the highest level of care. This is some of the traits you need to have if you wish to maximize your profit potential.
If you follow the guidelines outlined in this article, you will offer employees a great place to work, provide a positive patient experience which in return give your practice profits that provide a great life for your patients and yourself.
You must understand that as the owner of a dental practice, you are not only a technician, but you are a business owner
It means that you must be an effective leader. As the leader of a business you need to create a team that can produce beautiful music with successful scores. Effective leadership will create a collaborative team. Put these two together and you should have a profitable business.
Great Leadership + Great Team = Happy Patients
Happy Patients = INCREASED PROFITS
INCREASED PROFITS Can be a Vehicle to Provide You with a HAPPY LIFE!
Now, Go REAP the benefits of Great Leadership!
Do you have a PLAN to create Your Next Level of Success in 2014? Please use the comments below to tell us how you plan to create that next level of success.
What will you do differently in 2014 to get to your next level?