Guy Flannery, CPA
The dental industry is changing rapidly. While single practices still account for the majority of dental offices today, corporate dentistry is growing at an accelerated pace. DSOs are expected to make up nearly 50% of the dental market by 2030. It will become increasingly difficult for solo practices to compete against corporations that have the scale, capital, systems, and processes to run highly efficient businesses. Some considerations for the solo practice include:
Leadership and team
First and foremost, to remain competitive as a solo practitioner, you must act as the CEO of your business. Do you communicate with your team in a clear and consistent way? Does your team know exactly what is expected of them? Do you hold them accountable? Do you reward the right behaviors? Regardless of your business strategy, you will not succeed if your employees do not have the requisite skills or are not willing to implement changes. Sometimes these are family members or close friends, which makes it difficult to fire them if they are not performing. But you cannot shy away from these actions because your livelihood depends on it. Demonstrating business leadership and assembling the right team are the first steps to a thriving business.
You need to obsessively measure and track key performance indicators, such as cancellations, reappointments, referrals, treatment plan acceptance rates, collections, etc. Without this vital information, there is no way to measure progress and to hold the team accountable. You can run reports in your practice management software. There are also several high-quality dental analytics tool, offered by companies that specialize in the dental sector, that will provide a dashboard of your KPI’s in executive fashion at your fingertips.
Many dentists think new patients solve everything. However, new patients are costly to acquire and typically are not very profitable. You may have a much bigger opportunity with existing patients. Increasing patient retention is equivalent to getting new patients and much less costly. The entire dental team needs to focus on the customer experience that builds loyalty. If patients like and trust everyone they interact with, they are more likely to accept recommended treatment plans. You need to have systems in place that can help track and convert diagnosed treatments into actual production. This can be accomplished with patient communication software and well-trained staff. Happy patients are also more likely to generate referrals, which are the most valuable form of advertising.
In the age of COVID, are you going above and beyond to make patients feel safe? Are you clearly communicating your safety measures to your patients?
Are you maximizing your production given your capacity constraints? There are proven ways to increase capacity. For example, equip all operatories the same way to accommodate any type of procedure. Also, allow extra time on your schedule to complete all work in one appointment. While this may increase the average time of each appointment, it will create more overall available time by reducing the need for 2nd visits.
You can generate additional revenue by expanding your services. Implants, aligners, and sleep appliances are some of the things any general practitioner can pursue. Invest in technology that will allow you to provide these services efficiently, such as intraoral scanners and CAD/CAM machines. Also, consider 3-D imaging, especially if you are doing implants. These technologies allow you to get more work done, potentially reduce your lab bills, and increase case acceptance.
Are you getting the lowest price on your consumables, equipment, and services? Consider becoming part of buying/consulting group to leverage and maximize your savings. Understand how much you are spending as a percentage of revenue and focus on reducing that percentage. Review your lease obligations to make sure you understand the terms and are prepared at least one year in advance when you need to renew it. Consult a lawyer to avoid hidden liabilities and unfavorable terms that most landlords try to sneak into leases.
Author’s note: While there are many industry factors increasing the pressure on solo practices, there are also more resources designed to help than ever before. Visit UnifiedSmiles.com to learn how we are helping independent dentists stay independent.
Guy Flannery, CPA, is currently the CFO of Unified Smiles, a dental consulting/GPO firm in Michigan. His prior experience includes CFO responsibilities at a 225+ office multistate DSO and an international managed care dental insurance company. Contact him at [email protected] or 844-878-6483.