Avoid excessive bad debt: Being debt free is everyone’s goal, but since most dentists have debt at some point, it is important to distinguish between “good” debt and “bad”. Good debt as opposed to bad debt would be debt assumed for an investment in an asset that will yield a return on the investment that exceeds the total An example of good debt would be the acquisition of dental practice that would allow rapid retirement of the debt and additional profits for years to come.
Student debt is a growing problem for dentists. The most successful practitioners are the ones that graduate with reasonable student debt and remained disciplined in paying down the debt in their first years of practice.
- Commit your yearly business plan to writing: Action plans that are committed to writing are much more likely to be The simple act of writing a yearly business plan will increase one’s focus on achieving defined goals. Reviewing your written business plan for the coming year with the staff will allow them to focus on the goals as well, and will greatly increase the likelihood of success.
Reduce your overhead: One of the reasons that corporate dentistry has been successful is that their advisors have long recognized that dentists are historically operating at an artificially high overhead which creates significant unrealized By driving down overhead to acceptable levels corporate entities have made their practices much more profitable.
Furthermore, as practice growth has slowed for numerous reasons over the past few years, the profit can only be maintained by reducing unnecessary expenditures that inflate the overhead.
Develop an entrepreneurial mindset: Dentistry is no longer the cottage industry of our Economic realities created by dental insurance, PPOs, and DMSOs, to name a few , have forced us onto an unfamiliar playing field with many moving parts. To be successful in the future, dentists must develop an entrepreneurial mindset.
The most successful future practitioners will be those that have taken an interest in the “economy” of our industry.
- Attract and maintain exceptional staff: Realize that you are only part of the patient satisfaction Your staff, from the initial patient phone call to the completion of the patient’s care, has more contact with the patient than you and impacts the perception of your practice to a great extent. Staff turnover has more than an immediate economic impact on your bottom line, it has a profound impact on overall patient satisfaction.
- Consider practice acquisitions: Merging another practice into an existing practice is the only way that a dentist can realize immediate practice It is also one of the most profitable investments that a practitioner can possibly make. Significant profit is realized because the fixed overhead changes very little in relation to the additional revenue, thus creating a return on investment in the double digits in most cases. For more information on acquisition/mergers click here (LINK).
- Begin the transition process early: It has been shown that waiting too long to begin the transition process can negatively impact a doctor’s ability to accumulate wealth and retire comfortably Click here to view a more detailed discussion of this topic (link to the Bell Curve)
Develop a practice culture (brand) that creates exponential growth: In the service industry clients have direct contact with the service provider as opposed to the manufacturing industry where clients are purchasing a product through a third party Dental patients may not know much about the treatment they receive, but they are exceptional judges of how the care was delivered. A dental practice’s brand is not a product, but rather the culture it creates and every patient experiences.
On a conceptual level, the definition of organizational culture may be confusing, but in practice it is a significant determinant of overall staff and patient satisfaction. Practices that have purposely created a strong culture realize higher profitability and practice growth that becomes exponential rather than linear.
- Hire professional advisors: The need for professional advisors cannot be overstated and the entrepreneurial practitioner fully appreciates their Having a team of trusted advisors (accountant, attorney, transition consultant, etc.) has become a prerequisite for today’s successful and profitable dental practice.
- Love what you do: I would bet that if a survey of the most wildly successful dentists were conducted, they would each have one thing in They love what they do. The same is true in any profession or business. Passion is the driving force that moves the business beyond mediocrity to greatness. And here’s the irony…..the most passionate and financially successful dentists never worry about retiring early. They’re having too much fun to think about it!