All dental practice owners strive guaranteed recurring revenue. Setting up an in-house membership program can help to achieve this. But how does the parable of Pablo and Bruno fit into the membership mindset?
Does your dental practice have a predictable revenue stream?Cash flow to practices can be great one month and poor the next. It can be unpredictable and very stressful, and I believe there are better ways to manage revenue and cash flow in a practice. The question most practice owners should be asking every day is, how can my practice generate recurring, predictable revenue? Recurring revenue is the holy grail in any business. Once you figure out how to generate it, managing your practice becomes easier and more enjoyable.
This leads me to a story that will change your mindset and help you efficiently operate your business and understand the power of systems and recurring revenue—the Parable of the Pipeline, byBurke Hedges.
A long time ago two friends, Pablo and Bruno, lived in a small city. They had dreams of becoming wealthy and were willing to become educated and work hard to become successful. All they needed was a good opportunity and they would be set. One day their opportunity arrived. Their village needed to hire two men to haul water from the lake to the water well in the middle of their village. Each man would be paid for the amount of water he delivered.
But Pablo was not so sure. He was sick of feeling exhausted. He dreaded going to work, and he started to think that there must be a better way. He promised himself that he would think of a better way to deliver water from the lake to the village. He thought of a plan and shared it with Bruno: building a pipeline from the middle of the lake to the village.
But Bruno replied, “A pipeline! What a crazy idea. Who has the time to build a pipeline? I can carry over 100 buckets a day. I’m rich and can buy whatever I need. I don’t want to waste my time building a pipeline.”
But Pablo decided to work on his idea. He knew his income would temporarily drop as he worked on it, but the rewards would be far greater. He persevered even though everyone made fun of him. When Pablo finished the pipeline, he turned it on, and the system began to deliver large amounts of water to the village well without having to carry buckets. This resulted in large amounts of income for Pablo. Bruno bought larger buckets to try to compete with Pablo, but he wore down his body and eventually injured himself, all while making less income due to the wear and his injury.
Bucket carriers or pipeline builders?
Are you running your practice like a bucket carrier or a pipeline builder? If you’re a bucket carrier, you’re afraid of change and do things the hard way. Bucket carriers don’t follow efficient procedures and don’t leverage systems to save time or make a task easier.
Pipeline builders think outside the box, and create efficient and effective systems that save time and make their job easier. Pipeline builders want to figure out how to automate or streamline tasks so their dental practice can run like a well-oiled machine.
What can be learned from this story?
I believe this story by Burke Hedges can be extremely helpful to the dental industry. Most of the time we act like Bruno, the bucket carrier who does things the hard way when there are better options available. Here are three important lessons from this story.
1. Systems and processes are very important
Does your practice have systems in place to help it run efficiently? Documenting how your office does things can help with staff training, CEREC machines can create a consistent system to build crowns, and marketing systems can bring in new patients on a regular basis. What are you doing to build systems in your practice?
2. Building recurring revenue is vital to building wealth and stability
As we learned from the parable, recurring revenue is the holy grail in any business. It is a business model that is stable, predictable, and helps build wealth. How can you build recurring revenue in your practice? By creating an in-house membership program. A membership program allows your patients to pay you a monthly or yearly fee so they can receive discounts and benefits to your practice, and only your practice. This cuts out the competition. Patients will auto renew regularly and benefit by receiving quality preventive care. Your practice will bring in more revenue when your member patients need restorative treatment. Remember to manage this program by using a process or system, and you will be successful in growing your recurring revenue.
3. How adaptable are you?
Darwinism is a theory that teaches, “It is not the strongest of species that survives, nor the most intelligent. It is the one that is most adaptable to change.” Evolution trumps revolution. When you’re open to change and innovation, you will succeed. Changing your mindset to follow Darwinism is a great habit to get into. I encourage you to embrace change, adapt to your surroundings in the dental market, and constantly strive for improvements, efficiencies, and systems in your practice.
I wish you the best when it comes to building your practice, building an in-house membership program, and generating recurring revenue to stabilize your practice and make it easier to operate.