Five Things Every Young Dentist Should Know When Entering Practice
Roger P. Levin, DDS
Introduction
For those entering practice today, here's something to keep in mind—the rules have most definitely changed. How practices grew and succeeded in the past no longer works.
As a third-generation dentist and CEO of an international dental management consulting firm, I have had the opportunity to gain a unique perspective on dental practices. In my father's and grandfather's day, opening a dental practice was far less complicated. When I began practicing, I saw the beginning of enormous change taking place within our field. It has been snowballing ever since!
Young dentists today have challenges that never existed before. Debt levels, the recession, a changing insurance landscape and a host of other factors are making dental practice more challenging than ever before. However, what has really happened is that dental practices have been forced to operate more like businesses if they wish to grow over a lifetime.
The Dentist As Entrepreneur
The opportunity for a dentist to be successful in practice is very high. The real question—how successful will each dentist be? The followings strategies will help improve practice performance and ensure a higher level of success.
1. Reduce debt quickly
Dental school debt can be crushing. Even with new dental schools opening to accommodate high demand, the tuitions are a significant obstacle to financial independence for young dentists. And, of course, practices have become more expensive to open as well. Dentists should meet with financial planners as early in their career as possible. Too many young dentists think that having such high debt means they have to pay it off before worrying about financial planning. Doctors can begin to structure their debt in different ways that allow them to pay down debt, have a reasonable income and save for long-term retirement.
Recently, I met a dentist with a practice experiencing slightly below average production. He had never taken a penny out of his savings since the day he started earning money as a dentist. While his practice performance was somewhat low, his net worth was excellent. One word of caution to young dentists—don't overspend on the practice or in your personal life. You can "have it all" right out of the gate but doing so can mean a very bad long-term financial situation.
2. Market your practice
Dentists used to feel that marketing was only necessary when the practice was slow. Today, nothing could be further from the truth. To illustrate the point, Levin Group has now tracked more than 2,000 general dentists who entered our internal marketing consulting programs to evaluate performance. How effective is internal marketing? Ninety-nine percent of practices with strong internal marketing experience growth.
The challenge for young dentists is that they do not have many patients. What grows a young practice? In a word—effective marketing, which entails:
- Getting out in the community
- Tracking and measuring all marketing activities to determine which ones work so that money is spent in the right places
- Viewing every patient as an opportunity for referral
- Achieving Levin Group's target of 40-60% of patients referring at least one other patient per year
Be careful with some of the new marketing vehicles such as Facebook, Twitter and Groupon. While these social networking sites should be considered as part of a comprehensive marketing plan, they are only a small part of what should be a comprehensive internal marketing strategy.
3. Create step-by-step systems and train the team intensely
Most young doctors don't think that they need formal, documented systems until their practice is busy enough. Remember that systems are not merely about handling the operations of the practice, but how the practice creates production and profit. For example, the right scheduling system is not just about creating power cells in which to place patients, but also about how to attract and motivate patients to accept treatment and even refer others.
Levin Group teaches that the development of management systems begins with setting targets. Targets are metrics to be achieved such as:
- Collecting 99% of fees owed to the practice
- Having 40-60% of patients refer at least one other patient
- No-show rates below 1%
- Increasing the average production per patient annually
- Closing 90% of all cases presented
Once the targets are established, systems can be built to achieve these targets. Staff members play a pivotal role in the successful implementation of practice systems. Unfortunately, this does not always happen. Train the team on systems because their performance is more important than ever before. Despite the fact that this is an era where practices are more challenged to grow, doctors still tend to want to play a bigger role than necessary throughout the practice. The opposite should be the case. Doctors should focus almost exclusively on dentistry and patient relations. Let a trained team handle all other aspects. As a result, practices can grow quickly without having customer service problems along the way.
4. Implement Value Creation Scripting™ as quickly as possible
The recent recession caused 75% of all dental practices to decline.1 Younger practices were even more challenged than more established offices for obvious reasons. One of the key factors that has made a tremendous difference in growing young practices is implementing what we call Value Creation Scripting™. While traditional scripting is about clear communication, Value Creation Scripting™ is about influencing behavior. The dental team must be able to influence patients to schedule, refer others, accept treatment, pay bills, etc.
The concept of influencing also assists patients decide to have treatment, refer another individual, accept an appointment time, etc. Influence is about helping patients move toward the desired action rather than simply communicating and explaining what that action might be. A team that can influence patient behavior means the practice can do much more with fewer patients.
5. Begin saving—now
Young doctors should begin setting aside income into long-term investments without delay. While this may seem painful at first, a dentist can learn to live on, say, 90% of their personal income as easily as they can learn to live on 100%. Put off a few purchases, invest the difference prudently and within 10 years, the results will be amazing.
Levin Group now projects that most dentists will be working approximately 8-10 years longer than expected unless excellent financial planning is put in place. According to Robert Graham, CEO of RG Capital2, a firm that works with many dentists, saving and investing 10% of personal income can make the difference of almost 10 years in planning for retirement.
Conclusion
Dental practice today is more challenging than in the past. However, many young dentists, as entrepreneurs, are doing extremely well. It is more about applying excellent business principles that are effective in changing economic times than simply opening a practice and hoping all goes well. Proper planning will make an enormous difference in the success of many young dentists.
For all dental students about to enter the field of dentistry, for all young dentists who are still in their start-up phase, don't let the new economy intimidate you. Know that you've made what is still a wonderful career choice! ■
To learn how to run a more profitable, efficient and satisfying practice, visit the Levin Group Resource Center at www.levingroup.com—a free online resource with tips, videos and other valuable information.
1 ©The Levin Group Data Center™
2 www.rgcapital.net