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Dental schools provide an excellent platform for training students to practice dentistry, but they also fail to prepare them for the realities of private practice ownership. Today’s young dentists are faced with increased competition like never before. The biggest challenge facing future practice owners is the increased number of corporate clinics. The pressure imposed by the corporate dentistry movement is further accelerated by young graduates’ lack of business experience. Now, more than ever, it is essential that dentists understand what it takes to be a successful practice owner.
Wall Street, Venture Capitalists and other investors are rapidly acquiring and starting-up dental practices. These corporate conglomerates are backed by hundreds of millions of dollars to grow their portfolio of dental practices. Gone are the days of a dentist hanging a shingle, placing an ad in the yellow pages and enjoying a steady patient flow in their practice. Increased competition demands that dentists possess excellent clinical skills as well as savvy business acumen. More and more dental practice owners have the title of MBA – not DDS. So do you have what it takes to be a successful dental practice owner in the current environment?
After reading the preceding paragraphs, if you are not frightened away from practice ownership, I have some good news for you. Owning your own dental practice can be very rewarding, both financially and professionally. The path to becoming a successful practice owner requires careful planning and hard work, but practice ownership is attainable and should be the goal for most dentists. Below is some advice to help you succeed as a practice owner.
Three Roles of a Successful Practice Owner
One of the biggest myths among dentists is, “If my clinical skills are exceptional, I will enjoy success.” Although providing quality patient care is essential, it is only part of the formula for a successful practice ownership. Any successful practice owner requires balancing these three major roles: clinician, entrepreneur and manager.
Clinician: A dental practice owner should always look to expand and improve their clinical skills. The role of clinician is typically the easiest role to master as a practice owner, but should be a lifelong pursuit. You can increase your clinical skills by joining study clubs, attending continuing education courses, doing online research and working with an experienced mentor.
Entrepreneur: Entrepreneurs bring vision to the business. It is important that a practice owner start with the end in mind. Whether starting a practice from scratch or acquiring an existing practice, an owner should set both short- and long-term goals to achieve their vision.
Manager: Day-to-day business operations require a great deal of attention to detail. A quality manager ensures that the practice is well-organized and stays well-informed of current industry trends. A practice owner should carefully monitor the production, collections, new patient count and overhead of the practice each year, quarter and month.
Typically, businesses fail because the owner neglects one of these roles. Most practice owners can naturally fulfil one – maybe two – of these roles, but rarely can one person intuitively fulfill all three roles. Practice owners should identify and master their weakest role to ensure they enjoy a successful practice for years to come.
The Franchise Business Model
Every dental practice needs a business model that provides a roadmap to profitability. The best model for building a successful dental practice is the “franchise model.” Using the franchise model ensures that every aspect of your business is well documented and operates like a well-oiled machine. Although you may never own a second or third practice location, your dental practice should be your franchise operations model for doing so. In the beginning, be flexible as you learn what works and what does not. Write down your systems and simplify the process so that an employee with minimal experience can easily duplicate the process.
Corporate dental groups use the franchise business model to manage many successful dental practices. Corporate dental practices plan every detail in the business, from hiring staff and hygiene recall to advertising and collecting accounts receivable.
The challenge most practice owners face is how to maximize the amount of time you spend working on your business rather than in your business. Over time, the dental practice will thrive without the owner’s constant supervision because the staff has been trained to follow a methodical approach to each task.
Principles of Success
Most dental practice owners strive to provide quality care to patients, earn loyalty from their staff and establish a good reputation in the community, while also becoming financially wealthy. Long-term success as a practice owner requires commitment to time-tested principles. The ability to implement and embrace these principles will serve as the foundation for your practice and determine your ultimate success.
Follow Your Passion
The first principle of success is passion. Passion is the excitement or enthusiasm to become or achieve something great. Harriet Tubman said, “Every great dream begins with a dreamer. Always remember, you have within you the strength, the patience and the passion to reach for the stars to change the world.”
Successful practice owners are passionate about their business. As an owner, certain business areas will be more enjoyable, and you will want to handle these areas personally. However, other areas of the business will take a back seat due to the owner’s inexperience or lack of passion. It is important to enjoy what you do, but make sure the areas you find tedious or difficult to complete do not suffer. If you lack the passion or ability in a certain business area, hire someone with that particular skill. Keep your passion alive by finding that balance between what you must do with what you can hire someone else to do.
Ask yourself: Are you filled with passion to become a successful practice owner? Do you have the drive to be more than an employee and chart your own destiny?
Ask yourself: Do you listen to others with a desire to learn what to do and not do? Are you willing to help your staff and referral sources achieve greater success? How much of your energy is focused on helping others instead of managing the business with a “what’s in it for me” attitude? The principle of humility will improve patient satisfaction and staff performance, and increase new patient referrals.
Live with Confidence
A great business leader has the confidence to make decisions and be accountable for his or her actions. Patients, staff and the community will trust a confident dentist. Life coach Barrie Davenport teaches that, “Low self-confidence isn’t a life sentence. Self-confidence can be learned, practiced and mastered – just like any other skill.”
Ask yourself: Have you prepared yourself to take risks and move into the unknown? Do you trust yourself to make good decisions and avoid self-doubt? Do you spend less time worrying about the future than making your future? Confidence comes in small victories. Recognize your achievements, learn from your mistakes and focus on what must happen to achieve success.
Make Discipline-Based Decisions
Success as a practice owner is a journey, not a destination. The daily decisions made by an owner require discipline. Entrepreneur and author Jim Rohn reminds us that, “Discipline is the bridge between goals and accomplishment.” Success is made in the small decisions that often seem insignificant. Being fiscally responsible is vital for the stability of the practice. The practice owner should constantly monitor the practice overhead and distinguish needs from wants.
Ask yourself: Do I manage my practice within a budget? Can I postpone purchases that would have a negative impact on the practice cash flow? Maintaining low overhead is a critical component to success. A practice owner can save thousands of dollars each moth by negotiating a favorable lease rate, basing salaries off production, shopping for gently-used equipment and selecting insurance plans with higher fee schedules.
Doing the right thing when others are watching is expected. Doing the right thing when no one is watching is the test of integrity. When a practice owner lives a life of integrity, he or she is honest with himself, the staff and patients. Integrity is readily sensed by others. Warren Buffett advises, “You only have to do a very few things right in your life so long as you don’t do too many things wrong.”
Ask yourself: Do I keep my word and follow through on my commitments? Am I honest in my treatment planning? Do I look for ways to hide the truth if it benefits me? Dental practice owners who are dishonest with their staff and patients will be caught in a perpetual chain of deception. Although it might cause temporary pain, integrity will always lead to long-term success.
Bonus Principle Tips
Being a successful practice owner requires more than just being an excellent clinician, but also fulfilling the role of entrepreneur and manager. Success is seldom achieved by luck and is best achieved when the owner creates a business model based on the most efficient and effective ways to run the practice. Lastly, the owner must have a commitment to principles that will breed success. There are no short cuts to success, but that’s a good thing. Practice ownership will make you a better dentist while also helping you reach your professional and personal goals.