Tom Orent, DMD
In part I, we spoke about the three phases in the life of a dental practice. Most dentists don't give enough energy or thought into their exit strategy until they are near the end of their third and final phase. But successful entrepreneurs begin crafting their exit strategy from the moment they start their businesses. By not beginning with the end in mind, many dentists lose hundreds of thousands of potential revenue. In this column, we'll explore a number of "GEMS" you can inject into your own business plan to ensure maximum profit at the sale of your practice.
Total active patient numbers
You can't be all things to all patients. And, for the most part, you likely prefer those individuals who look for a quick, cheap fix or a place to stop in when a tooth chips every six years to bypass your practice. But whose best interest is served when we chase away those patients who don't immediately accept and pay for optimal treatment plans? Are we doing them or ourselves a favor if we suggest that they not remain our active recall patients?
Sure, there are patients who neglect preventative care and obvious periodontal disease. And it's in everyone's best interest to refer these patients elsewhere. But for the rest - those who come back willingly on recall and have average oral health, I offer *two* reasons to keep them in your practice.
Aren't you a better communicator now than you were 10 years ago?
You are always improving your skills. And you are far more adept at helping patients see the need for care than you were just five years ago. It's just a matter of timing - along with trust, finances, or other matters that change over time.
It's a numbers game
The eventual sale value of your practice will be directly proportional to the active number of patients on recall. Perhaps you have a "boutique" practice where you see only veneer makeover cases and perform the most outstanding cosmetic dentistry in your region. But if that's where you're headed and you've severely limited your practice to, for example, 650 patients on active recall, you'll be really hard pressed to achieve the sale numbers you imagined your practice was worth!
Here's a different model. You welcome all patients — those who pay and show up for appointments — with open arms. You maintain an active recall of 2,500 to 3,000 patients. An associate performs what you don't like to do, and you can still "limit" your practice to what you do enjoy! This model still allows you to perform only the type of dentistry you choose, gives you a much wider referral base, and, in most cases, a significantly higher income throughout the years, as well as at the final sale. It's the "have your cake and eat it to of dental practice models!"
In next months' "Gems of the VIP 5-Star Practice," we'll wrap this up when part three examines the effects on practice value of new patient flow, personal vs. corporate name, and nonsolicitation, and restrictive covenants.
Dr. Tom Orent, the GEMS GUY, is a management consultant and practicing dentist. He is a founding member and past president of the New England Chapter of the AACD. He has presented his "1,000 Gems Seminars™" in four countries and at state and national meetings in 46 states. He has lectured at numerous dental schools and is the author of four books and numerous articles on aesthetic dentistry, practice management, TMJ, and "Extreme Customer Service." Dr. Orent may be reached by phone at (888) 880-4367, by fax at (508) 872-0020, by email at firstname.lastname@example.org, or visit www.1000gems.com.