Research report: Business practices for dental practices
In the past, dentists could get by with outdated systems due to an ample supply of patients. That's no longer the case.
The Great Recession and the slow recovery are still having a major impact on the ability of many dentists to grow their practices. According to this year's Dental Economics-Levin Group Annual Practice Survey,
• 37% of responding dentists said increasing production was their greatest challenge;
• 20% said annual revenue decreased, and 25% said it stayed the same; and
• 27% said they're experiencing high or extremely high stress.
Low production and high stress seem to be the norm for a significant portion of our profession. There are external forces at play-more dental schools graduating more new dentists, lower insurance reimbursements, the delayed retirement of older dentists, and more-that practice owners have little or no control over.
However, what is within a dentist's grasp is the ability to raise his or her level of business expertise. Many practice owners have done so, reaping the rewards of increased production, higher income, and reduced stress. But a disturbing number of dentists admit they know little about two key systems in their practices-finances and marketing.
More than a quarter of responding dentists (25.9%) are, at most, somewhat familiar with their practice finances. If you're not tracking your numbers, how do you know if your practice revenue is growing, stagnating, or declining? The answer is: you don't. You can't make good business decisions going forward based on inaccurate or no information.
Nearly half of responding dentists (47.6%) said they weren't very familiar with their practice's marketing strategies. This statistic might be more understandable if the majority of practices had a marketing coordinator, but only 24% of responding dentists said they had such an employee in their office.
When practices have a marketing coordinator, dentists can delegate the majority of marketing activities, including the creation, implementation, and tracking of strategies, to that employee. In such a scenario, a dentist would be less involved in the day-to-day marketing, but still would be familiar with the overall effectiveness of the practice's marketing program. Without a marketing coordinator in place, the dentist should be very familiar with the practice's marketing.
Too busy to grow
I believe that these two statistics-dentists' lack of financial and marketing knowledge-highlight one of the paradoxes of being a practice owner in this postrecession era. Dentists today need better business skills to operate a successful practice, but the day-to-day demands of treating patients and running an office often limit the time they need to gain those new skills.
Even in practices that aren't performing well, dentists are still busy due to the effects of outdated systems. When practices lack proper systems, inefficiency rules the day. This means everything takes longer. As the years go by, more bottlenecks creep into systems, leading to greater inefficiency. It's an extremely frustrating way to work.
In the past, dentists could get by with outdated systems due to an ample supply of patients. That's no longer the case. To grow a practice in the current economic environment, dentists must be not only excellent clinicians but also savvy business leaders.
Know your business
You can't effectively manage your practice if you're not very familiar with your practice's financial and marketing performance. If you're operating in the dark, then your decisions are guesswork. That's no way to run your business.
I encourage all dentists to become dental business experts. There are a multitude of learning opportunities, from courses to consulting, to improve your business knowledge. Upgrade your skills, and you'll be better prepared to grow your practice in today's more competitive dental arena.
ROGER P. LEVIN, DDS, is the founder and CEO of Levin Group Inc., a leading dental consulting firm. A nationally recognized speaker, Dr. Levin presents practice management seminars throughout the country.
Seminar savings: Save $50 on doctor tuition for Dr. Roger P. Levin's seminar, "The Business of Dentistry... Simplified," in Oklahoma City on December 3. Use code DEC50 during sign-up. Go to levingroup.com/gpseminars to register and for more information.