Roger Levin, DDS, MBA
As most of you who read this column are aware, I present more than 100 seminars annually to dentists and staff throughout the United States. This has given me a great opportunity to speak with thousands of dentists each year and understand their perspectives on trends in dentistry, the future of dentistry, and the best ways to achieve success. The Levin Group also cosponsors the Dental Practice of the Year Award with Dental Economics. This gives us an additional opportunity to meet with many of the most successful practices in the country and understand their formulas for growth and achievement.
One interesting observation that has been recurring in my conversations with many dentists is the subject of overhead, including budget cuts and practice investment. I have noticed that many dentists are very concerned about overhead and expenses, as they should be. In fact, Levin Group clients goes through a budgeting process to better understand how to allocate the financial resources available to their practices. However, some dentists do not fully understand the ramifications of keeping overhead low and cutting back constantly on practice investment.
You can`t cut your way to success! Every good CEO knows that you have to keep costs in line. However, you can reach a point where you literally are choking the potential growth of the business. Many dentists have been so stringent in keeping their spending low that they do not realize that they are hindering the potential growth of the practice.
Your practice is a business. As a business, it requires fuel to go forward. In this case, the fuel is practice investment. Every dentist needs to analyze every growth opportunity. These opportunities may come in the form of new services, new equipment, new technology, new marketing, additional staff members, additional operatories, or even a new office facility and location.
There probably are hundreds of opportunities to invest in a practice, and some have greater impact than others do. Some dentists, though, make the wrong choices and do not receive a return on their investments. In fact, they lose money. Others make no choices, but try to keep overhead low as a success strategy. Unfortunately, keeping overhead low will not build a practice. Some practices that claim to have very low overhead also have very low production and profitability. What they do not realize is that their total profit is suffering severely and that they are killing the golden goose slowly by not investing, modernizing, and expanding their offices.
Investing in yourself
This column is not long enough for me to tell you which investments to make. Investing in the practice is a planning issue on which you must work diligently to identify the best opportunities. Expose yourself to the many opportunities that face dental practices every day and decide which will provide the most significant and most immediate return on investment.
The old adage, it takes money to make money, is true. If you are so stringent with your overhead and follow a philosophy of cutting back expenses, regardless of the long-term effect, you will find that you have low expenses and low profit at the same time. Pick your practice investments wisely, and watch your practice grow!
Roger P. Levin, DDS, MBA, president and CEO of The Levin Group and the Levin Advanced Learning Institute, provides worldwide leadership in dental management and marketing for general dentists, specialists, and dental-products companies.