The Dental Management Pyramid: Part IV
Roger P. Levin, DDS, MBA
Dentistry is a phenomenal profession for a number of different reasons. Not only do dentists have the opportunity to help change the lives of their patients and maintain a standard of oral health, but they also have the chance to custom design their own quality of life. Despite the plethora of motivational literature currently available, most Americans are not fully in control of the way they live and are highly dependent upon their jobs and incomes to survive. According to Doug Hammond, Vice President of Sales and marketing for CareCredit, a leading dental patient financing company, 90% of all Americans are with 90% of their credit card limits.
Some dentists have figured out how to avoid this financial trap. Through excellent practice and financial planning, they have been able to orient their practices to generate sufficient income to meet their needs and enjoy their personal lives. In fact, there is very little difference between the practice and the personal lives of most dentists. This is because the sole owner of a practice will often run it to meet specific personal goals (eg, income, work/life balance, vacations). Although the opportunity to have an outstanding quality of life is available to every dentist, this goal does require some level of planning for the practice as a business.
Dental Practice Strategic Planning
Strategic planning is the act of setting goals for the practice’s future. Every Levin Group management client begins by writing a vision statement that gives an overall description of the type of practice desired, as well as any future goals for the business.
Many clinicians lack a detailed technology plan for their practice, which can result in overhead waste and loss of return on investments (ROI) on excellent technologies. Most dentists will make decisions based on one piece of technology (eg, practice management software, intraoral cameras) without considering any others or future purchases. The buyer will investigate the best manufacturer for that technology, make the purchase, and hope for a reasonable ROI. Unfortunately, many consumers may never think about an integrated technology plan, which could be used to identify technologies that might be purchased in one, two, or three years. Identification of three or four different technologies that may be necessary over the next several years might result in practitioners becoming more apt to make purchases based on their combined integration capacity.
Practitioners may also be more interested in using technology to increase the speed and efficiency of their practices over a four-year period, instead of trying to integrate a number of incompatible technologies that cause increased stress for the practice. Identification of the ROI plan for each technology can then allow the practitioner to identify additional technologies that might increase practice revenues over the next few years by $150,000 annually. These revenues could, over the next 20 years, compile $1 million or more in net worth for the doctor.
None of these approaches can occur until strategic planning (including a description of the practitioner’s goals for the next year, three years, or five years and beyond) is implemented. After this is determined, additional technologies or decisions can be considered for the next one, two, three, or four years. One of the toughest challenges involves trying to anticipate the yet-to-be-invented technologies that may be desired for the practice as well.
Personal Strategic Planning
The other side of the strategic planning coin is to consider a personal definition of success. A personal definition of success addresses seven categories: 1) personal; 2) practice; 3) health; 4) family; 5) financial; 6) spiritual; and 7) community. One or all of the seven areas can be considered or eliminated so that other categories can be added. Once individual areas are selected, specific goals for each category should be identified for the next five to seven years.
While this task may appear to be a quick exercise, it can require as much as 10 hours to truly define these goals. Why so long? Because as individuals begin to define, in writing, their ideal goals three years out, they often find themselves cross-checking other categories. For example, it is possible that a clinician has not yet achieved a practice income that will allow him or her to have a personal net worth in three years that meets the goals in his personal definition of success exercise.
Strategic Planning is Enjoyable
Although strategic planning is fun and easy, it is not quick. In fact, the author recommends that clinicians set aside up to three half-days to work on their practice and personal visions. Staff members can be included in planning for the practice, but it is ultimately up to the individual practitioner to make any final decisions. Only the clinician is qualified to define his or her personal definition of success.
As a sense of comparison, clients with net incomes below $100,000 and clients with net incomes in excess of $1.5 million have approached the Levin Group for management assistance. Some clients work two days each week, and some work six. Clinicians have attended presentations who want to own as many practices as possible, and others would never consider more than a two-chair facility. These examples run the gamut of income, work/life balance, and drive—and there are many definitions of success. Only an individual practitioner can define what success truly means to him or herself. Whatever a clinician envisions success to be, strategic planning is the best way to get there.
*Founder and CEO, Levin Group, Baltimore, Maryland