Th 301385

Something new: Get the most from where you are!

Nov. 1, 2008
Has your practice slowed down recently? Or maybe your office is in that exciting phase where you're on fire and growing faster than you can manage.

by Roger P. Levin, DDS

For more on this topic, go to and search using the following key words: practice cycles, practice start–up, growth, maturity, decline, economic change, consultants, corrective actions, Dr. Roger Levin.

Has your practice slowed down recently? Or maybe your office is in that exciting phase where you're on fire and growing faster than you can manage. No matter what stage your practice is in, it's just one of the various cycles practices can experience over time. Each stage brings with it unique challenges, financial concerns, and particular team issues. Knowing what stage you're in can help you maximize the opportunities and avoid any pitfalls.

Understanding business cycles

As a third–generation dentist, I remember hearing about my grandfather's practice. It simply grew every year. Whether there was a recession, inflation, or any number of variable conditions — the practice just grew yearly. Today, many dentists believe that, like my grandfather, their practices will likewise continually grow. However, it's a new day in dentistry. Dentistry has become like other businesses with similar pressures affecting practice growth or decline.

In every Management 101 textbook, the reader learns about the basic business cycles — expansion, peak, contraction, decline, etc. Inevitably, every practice will move through some of these cycles. There are practices that move into cycles of plateau or early decline, while other practices momentarily stall, and then become reinvigorated. There are no guarantees that any dental practice will emerge from a slowdown with growth as the next logical phase.

The challenge today is to create a business plan that allows dental practices to grow continuously. Proactive planning is absolutely necessary for continued growth. When Levin Group analyzes new client practices, we look for evidence that the dentist has taken steps to ensure continual growth. Increasingly, we find more practices remaining in a flat or plateau phase, due to factors such as competition, advertising, insurance, staffing, new services, and technologies.

Four stages of the dental practice business cycle

Levin Group has identified four stages of the dental practice business cycle. As you can see in Fig. 1, the four stages create a curve. These stages are:

  1. Start–up
  2. Growth
  3. Maturity
  4. Decline

Start–up phase

The first stage of a practice is the start–up mode. Almost all start–ups grow unless they are so overcapitalized that they cannot pay down their debt. The start–up phase is an exciting time for both the doctor and team. In the first two or three years, practices can literally undergo exponential growth.

Growth phase

Levin Group identifies early growth, middle growth, and late growth as practices move toward maturity. Most practices will go through the growth phase; however, different practices will reach higher levels of growth at varying speeds. How quickly a young practice achieves high levels of growth is often determined by its systems. Some practices continue with their existing systems and hope growth occurs when the community discovers them. Others are very proactive in their systems development, customer service, and marketing. During the last 23 years, we have seen many young practices experience explosive growth when the right systems and marketing are in place. This transformation can be enhanced by either business know–how or the outside guidance of consultants.

Maturity phase

Maturity is a flattening out of the practice. In many of the seminars I present, dentists will remark that their practices have become flat. I explain that they are probably in what we refer to as early decline. The good news about early decline is that it can be very easily reversed. Early decline occurs when a practice grows by less than 4% per year.

Fig. 1: Levin Group Four Stages of Dental Practice Business Cycle
Click here to enlarge image

A flat practice is a temporary situation. Nevertheless, a mature or flat practice is a warning signal, much like chest pains that indicate a heart condition. Chest pains can lead to the need for CPR or defibrillation in dire emergencies. Likewise, any early warning sign signifies the need for corrective action. If doctors fail to acknowledge that a flat practice is a problem, they may wait until their practice reaches the next phase of the business cycle — early or middle decline. Sometimes three to four years elapse before a doctor accepts that the practice is not only flat, but beginning to move down the curve into the decline phase.

Decline phase

More practices than ever before are moving into this phase. However, not all practices will experience this stage. Those practices that move into decline may have severe, unexamined limitations in terms of outdated systems or inadequate scheduling formats. The picture gets more complicated when declining practices also find themselves beset with factors such as economic changes, aggressive marketing by the competition, and dental insurance. Levin Group has observed an increasing number of practices moving from growth to maturity to decline — due in large part to these internal and external issues. When doctors wait three or four years before acknowledging that they have a problem, income is lost that can never be recovered. Keep in mind that this lost income also translates into more years spent working before reaching financial independence.

The decline phase is a dangerous place to be. Early decline can be reversed. However, practices in middle and late decline are in an extremely precarious position. The further the practice moves down the decline curve, the harder and longer it takes to bring it back. Once a practice has gone far enough down the decline curve, there is only a small chance that the deterioration can be reversed. While correction is not necessarily impossible, it is enormously challenging.

Taking corrective action

The key for dentists is recognizing as soon as possible when the practice is in decline. Dentists should not be embarrassed about the situation. Neither should they be afraid to talk to someone. Too many doctors feel personally embarrassed when their practice is either flat or not growing. They may think of it as their own personal failure. Yet, we know that most doctors have received very little business training. Consequently, these dentists are hampered by a resulting lack of familiarity with strategic planning to address a declining practice.

It doesn't take business training to recognize that action must be taken immediately when a practice is in decline. While you could stay in this phase for quite some time, you could also slip quickly into middle or late decline which is much more difficult, if not impossible, to reverse. Look for consultants as quickly as possible with knowledge of strategic planning and experience in dental practice turn–arounds to help facilitate practice growth. Experts can turn these situations around by putting the right management and marketing systems into place.

Steps to practice success

Is your practice growing or declining? Take the right steps to ensure success. It's up to you whether your practice will continue to grow, decline, or remain in a plateau. Find out where your practice is on the business cycle curve. Only then will you be able to take the necessary steps to get your practice back to growth. Make sure you watch for the telltale signs of early decline, indicated when yearly growth drops to four percent or lower. Realize you must do something about it today. You will be rewarded with a stronger practice continually moving toward growth and profitability.

DE readers are entitled to receive a 50% courtesy on a Levin Group Total Practice Success™ — Practice Potential Anaysis,™ an in–office evaluation of your unique situation. To schedule an appointment, call (888) 973–0000 and mention "Dental Economics®" or e–mail [email protected] with "Dental Economics®" in the subject line.

Roger P. Levin, DDS, is founder and CEO of Levin Group, a leading dental management consulting firm that is dedicated to improving the lives of dentists through a diverse portfolio of lifetime services and solutions. Since the company's inception in 1985, Dr. Levin has worked to bring the business world to dentistry. Levin Group may be reached at (888) 973–0000, or at

Sponsored Recommendations

Clinical Study: OraCare Reduced Probing Depths 4450% Better than Brushing Alone

Good oral hygiene is essential to preserving gum health. In this study the improvements seen were statistically superior at reducing pocket depth than brushing alone (control ...

Clincial Study: OraCare Proven to Improve Gingival Health by 604% in just a 6 Week Period

A new clinical study reveals how OraCare showed improvement in the whole mouth as bleeding, plaque reduction, interproximal sites, and probing depths were all evaluated. All areas...

Chlorine Dioxide Efficacy Against Pathogens and How it Compares to Chlorhexidine

Explore our library of studies to learn about the historical application of chlorine dioxide, efficacy against pathogens, how it compares to chlorhexidine and more.

Whitepaper: The Blueprint for Practice Growth

With just a few changes, you can significantly boost revenue and grow your practice. In this white paper, Dr. Katz covers: Establishing consistent diagnosis protocols, Addressing...