By: Wayne Kerr, DDS, MAGD
There’s no question that the successful operation of a dental practice requires business, management, and leadership skills. If I had the opportunity to share a few tips with other practitioners based upon thirty-five years of experience as a fee-for-service solo dentist, I’d suggest the following:
For the New Practitioner:
1. Calculate your “break-even” point.
If you don’t know how much must be produced and collected each day, there is no way to plan for sound cash-flow management or profitability. Examining each end-of-day report enables one to know the practice’s current fiscal condition and reduces the potential for an unpleasant end-of-month financial surprise. Make scheduling adjustments as needed.
2. Be on time.
According to research by Futuredontics, seeing patients on time and as scheduled is the number one factor which determines whether a patient will return. In a young and growing practice, minimizing the loss of new patients is critically important. Time your most common procedures, use practice management software with ten-minute increments, add a unit for difficult patients, and always keep an empty chair. Take advantage of “non-captive” time to leave the restorative operatory for hygiene exams to ensure quality time with each patient without backing up the schedule.
3. Know your software.
Many practitioners eagerly embrace educational opportunities to improve their clinical skills, but often fail to enhance their practice management knowledge, including understanding their software. Knowing your software enables one to download important key practice indicators to better manage the practice in “real time,” while significantly reducing the risk for employee embezzlement.
For the Mid-Level Practitioner:
1. Begin each day with a team huddle.
The “morning huddle,” really does set the stage for success. Because it’s important to establish personal relationships with our patients, the team needs to know everything possible about any new patients being seen. It’s also beneficial to know whether any scheduled hygiene patients have incomplete treatment so that any issues preventing the completion of needed services can be addressed.
2. Schedule each day to meet or exceed overhead by lunchtime.
Once fixed overhead is met, production costs are limited to variable expenses only, with eighty-two cents of every dollar produced thereafter going to the practice’s bottom line. Scheduling just one or two patients each morning for quadrant restorative services, minimizes the number of appointments needed to complete care (which patients appreciate) while enabling the practice to reach its daily production goals.
3. Don’t be all things to all people.
An experienced clinician should still recognize when it’s appropriate to refer a patient to someone else for care. Whether it’s a procedure that’s not yet been mastered, or it’s a patient with a challenging personality whose expectations might not be met, don’t overlook the opportunity to “share the responsibility.” And, remember that non-compliant patients can be legally dismissed from the practice by following known protocols.
For the Successful Practitioner:
1. Maintain the status quo.
It’s quite common for the successful dentist enjoying peak productivity to slow down and refer out procedures he or she no longer wishes to provide. What’s critically important to recognize, however, is that a practice must generate enough cash flow to be attractive – not only to a buyer – but to a bank willing to finance a practice transition as well.
2. Plan a practice’s transition five to ten years out.
If the owner of a practice doesn’t know its value, how can a transition begin? Establish a relationship with a transition team you respect and undergo a practice evaluation. Doing so provides a starting place which enables the owner to make any necessary changes or improvements over time to enhance the likelihood of success. Additionally, it protects the surviving spouse and provides a roadmap for transition should the owner die before the practice has been sold.
3. Maximally fund retirement plans.
A new practice is concerned primarily with cash flow, while a growing practice is reinvesting in equipment, facility, and team members to resolve issues of capacity. The mature practice, however, has overcome those issues, and should use its economic engine to maximally fund all retirement vehicles to provide for the retiring doctor’s financial security. Take advantage of opportunities to “catch up” with 401(k) and IRA contributions and begin evaluating the various filing options regarding Social Security.
