By Tom Rich, MBA, GG12 Senior Practice Analyst
Throughout the time I’ve been a Senior Practice Analyst, I have discovered there are two types of Dentists:
Dentists somehow believe that the overall performance of the practice is a direct result of their skillset and clinical know-how. So, if the practice is somehow suffering, it must be as a result of their lack of dental expertise. So, what do they do? They do what virtually every other Dentist has been trained to do: Get more clinical training. It’s like a patient scheduling an oil change for their car because they have a toothache. Sure, it might even be time for them to change the oil, but it will do nothing for the pain in their tooth. The fact is the best clinical training can’t overcome a single fatal flaw in the basic business fundamentals of a practice. When you treat your practice like a business, you allow yourself to take a different approach. You look at the primary drivers and business fundamentals and focus on how to improve those.
So, if it’s true that a practice is a business, why do so many Dentists resist acknowledging, thinking, or, more importantly, behaving like it is one? "Why do so many Dentists resist acknowledging, thinking, or more importantly, behaving like their practices are businesses?" They believe that if they have a “business,” it forces them to put profit before patients. They are already fighting the stigma that they’re seen as greedy, already-too-rich Dentists, and they don’t want to do anything to add any potential fuel to the fire. Another common thought process is feeling like they went through dental school to become a Dentist. Dentists can’t be bothered with all this “businessy stuff.” Dentists practice dentistry, and when they focus on practicing dentistry, everything else magically falls into place. While both of these theories are somewhat understandable, by not embracing the business aspects of a practice, Dentists allow themselves to take their eye off the prize. Plainly stated, practice-based thinking encourages, or even forces, Dentists to neglect and ignore standard business fundamentals, which causes the practice to suffer. When the practice experiences a downturn in patients or profits (or both), how do most Dentists react? The reasoning tends to fall in one of two camps: • •
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Those who know their practice is a business, and… Those who haven’t realized it yet.
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Let’s run a quick comparison between businesses and practices.
PRACTICE
• • • •
Income
Expenses Customers
Tangible assets (tools, team, real estate, etc.) Intangible assets (goodwill, brand, reputation, etc.)
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• • •
Accounting necessary
Taxable services Saleable assets
"When the practice experiences a downturn in patients or profits (or both), how do most Dentists react?"
BUSINESS
• • • •
Income
Expenses Customers
Tangible assets (tools, team, real estate, etc.) Intangible assets (goodwill, brand, reputation, etc.)
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• • •
Accounting necessary
Taxable services Saleable assets
Holy Hanna! Wouldn’t you know it? Based on this comparison, it looks like a practice just might a business!?! It looks like a duck, walks like a duck, quacks like a duck, and even behaves like a duck … do you think it might be a duck?
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