If you own your dental practice, you may have a business degree in addition to a DDS or a DMD. It’s more likely, though, that you majored in a science such as biology or chemistry. After all, you didn’t go to school for eight years to become a businessman or -woman; you went to school to diagnose and treat problems with the teeth and gums. You’re a dentist and a business owner, but not necessarily a “businessperson.” However, when you own your practice, you wear two hats: You’re a dentist and a businessperson. Unless you became a dentist for entirely altruistic reasons, you obviously want your practice to be profitable so you can make money. To make that happen, you need to view your practice as a small business and yourself as the owner. You’re not just a dentist. You are a dental-preneur!
You’re the Coach: Do You Have True Team Players?
Every employee in your business, from the receptionist to bookkeeper to the hygienists, impacts customer experience. When you take an active role in the business aspect of your practice, you’re able to identify policies, procedures, and practices that may not be working. It’s your job to put reasonable, effective administrative systems and processes in place (even if you need to hire consultants to help you). It’s your team’s jobs to adhere to those processes reliably and courteously. There is no room in a successful business for employees who are not dedicated and willing to do their part to benefit the organization.
Is Your Financial Policy Transparent and Reasonable for Your Specific Business?
Is it better to perform extensive (and expensive) dental work and be compensated over time via flexible installment payments arranged with your financing team? Or, is it better to have a more restrictive payment policy requiring payment up front (from insurance, self-pay or a combination of both)? The answer will vary from practice to practice. Determine if your top priority is to build your client base (which you could achieve with flexible payments plans) or to keep your existing, financially sound customers happy by minimizing wait times (which you could attain with a restrictive financing policy). Over time, it may be wise to adapt your financing policies based on changes in clientele.
How you’ll accept payments is important. It’s secondary to what’s arguably the most important business decision you need to make, though: how much you’ll charge for services. You’ve heard the saying, “You get what you pay for.” That’s not always the case, but many customers assume it is. The cost of a service is more negotiable than the cost of a commodity, such as oil. Don’t undervalue your services and undercut your customer base by under-pricing. The customers you want to attract, those with enough money to question why something seems like a bargain and to perhaps pass on it assuming it must be an inferior service, are exactly those you want to attract. If your prices are under market value, change them!
Are You Making Patient Education a Top Priority?
In the business world, there’s a practice known as upselling, i.e. “Would you like fries with that?” You’re not in the business of selling burgers and fries, but you are in the business of selling treatments — reparative, restorative, preventive, and cosmetic. Usually, patients visit your office for one of those types of treatments. They may be coming in for their scheduled six-month (preventive) exam or to have a cavity filled (reparative).
As a business owner, get into the habit and encourage your team to get into the habit, of spending less time on idle small talk and more time on patient education. If your patients don’t know what your practice offers, they won’t know what to ask for. Address the reasons for their current visit, but also educate them on the services you offer from which they could benefit. Use their X-rays and before and after pictures of other patients to show them exactly how the services you’re recommending can help them.
Are You Measuring Results So You Can Manage and Improve Them?
You’re fortunate to be a small business owner in the digital age, where there are software programs and analytical metrics to track everything from customer satisfaction and retention to your highest- and lowest-margin services, to your supplier and utility costs, etc. All of this data is easily available to you and your team. If you’re not measuring benchmarks and then analyzing what those measurements mean, you’re missing out on tremendous opportunities to expand on what’s working well and change or eliminate what isn’t. As a business owner, it’s up to you to take the time to step back from your clinical duties and evaluate your business from a big-picture perspective. Many dental practice owners become so caught up in their day-to-day responsibilities that they fail to make time to look at analyze the data available to them.
Owning your dental practice carries with it tremendous responsibilities. First and foremost, you must be diligent about staying abreast of new treatments and technologies and ensuring that you continue to hone the skills that make you a great dentist. You also must become business-savvy to make sure that your investment of time, money and passion pay off in the long run. Fortunately, working smarter does not have to mean working longer or harder. Choose your team wisely and rely on it. Outsource things like analyzing data to the experts. Just always keep your eye on the big picture.
For help on working on the business of your practice, contact the dental tax and advisory team at Goldin Peiser & Peiser.
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