The plot of a dental practice: An essay on finding long-term financial success as a dentist owner
In this financial essay, Ryan Clower, CPA, examines how business trends over the lives of a dental practices are similar to the unfolding plots of great novels. He offers insight as to how dentists can discover financial protagonists, avoid debilitating antagonists, and author long-term professional success.
In this financial essay, dental accountant and practice consultant Ryan Clower, CPA, examines how business trends over the life of a dental practice are similar to the unfolding plots of great novels. He offers insight into how dentists can discover financial protagonists, avoid debilitating antagonists, and author long-term professional success.
As dental accountants and consultants, we are trained to look at data that provide us with the ability to see a story written out in numerical format. We have seen many stories over the years that have led us on many journeys. I must admit that I am a reader—a reader of many things—but my favorite stories (call me crazy) are the ones involving my clients’ businesses. I am able to dig into the data and see the true meaning of each numerical story. I get to know the characters involved—who they are and how their actions are affected by each plot twist. It's a truly rewarding experience; it's what gets me up in the morning.
Now, I am a fan of Hollywood and Disney, John Grisham and CS Lewis, even Socrates and Carl Jung, but the main catalyst for the enjoyment of my work as a dental accountant and consultant is the fact that the stories from my clients are real. They are the here and now—and I actually get to contribute to them.
I do not know if you recall your English classes from high school or middle school, but when you were younger, you were likely taught about the component parts of a story. If you had an English teacher like mine, she was white-haired, expected a lot from you, was a little out there, and pushed you to see the world in a different light. So, let’s see business in a different light for a few moments and look at how the composition of a story is metaphorically similar to that of a business, but specifically a dental practice.
When you look at the basic characters of a story, you normally find a protagonist and an antagonist. The protagonist is the leading character in a story, whereas the antagonist is a person who actively opposes the protagonist or is hostile to someone or something. Now, think about the last book you read. Did you know at the beginning of the story who the protagonist was? Or did you discover it toward the middle or near the end? What about the antagonist? Really think about it. When was it that you truly understood how these characters would affect the story? It may not have been when were they were first introduced. Now, think about the character traits they possessed. How did these help lead you to your conclusion of who they were?
Many times we can easily recognize the main characters in a story—the key players and their supporting cast—but it takes us some time, and I would even say experience in knowing how characters are developed, to really learn to recognize these folks. It is over time, through seeing patterns in their actions, that we gain an understanding of their roles as either protagonists or antagonists.
Characters are ingrained in the story and their actions have an impact on the direction it goes. The same is true for your business. I always tell people that a business is much more than just accomplishing tasks and the financial, numerical portrayal of that; a business is people. When I look at a set of financial numbers, I can see trend lines and recognize how the actions of people played a major impact on those lines. If the owner had an off month because they were moving, their family recently had a baby, or perhaps there were even issues in their marriage, I can see a direct impact in the numbers in a negative direction. On the other hand, if the owner recently attended a lecture series on leadership, was involved in an accountability group that just met for the quarter, or even had some sort of spiritual awakening, I can see a direct impact in the positive direction.
I could go on to the supporting cast and list similar examples of how circumstances in their personal lives also affect the business, but let’s focus on the owner right now. Given the examples above (the owner moving, having a baby, attending a seminar, etc.), who would you say are the protagonists or antagonists? Your first thought might be that the owner is both protagonist and antagonist: When things are trending negative, the owner is acting as an antagonist. When things are trending positive, the owner is acting as a protagonist. But I challenge you to think deeper here and follow me. When things trend positive, the protagonists are speakers at the leadership series, the members in the accountability group, or the catalyst for the spiritual awakening. When things trend negative, the antagonists are the stresses involved with moving, the lack of sleep that comes with having a new baby, or the fears that arise from marital issues. Do you notice how the owner plays the role of neither protagonist nor antagonist?
So how do you fight against the antagonists and ally yourself with the protagonists? The answer is accountability and being aware of the trends that are happening in the financial data that is the story of your business. Through accountability, you gain awareness and are able to see how protagonists and antagonists are affecting the outcome of your story. Then you can begin to increase or limit their affects. We traditionally do this with clients by meeting regularly and producing a "one-page scorecard" that tells the financial story of the practice and supports our awareness.
What, then, is the role of the owner? I’ll get to this, but our journey needs to go a little further first.
What would a story be without a climax? Boring, probably. The climax is the turning point in a story, the point where you find the highest tension. Inside a given story, there are generally multiple miniclimaxes and one major climax. In each moment of climax, drama is heightened and the characters are faced with a set of circumstances that must be addressed definitively. The decisions that are made have an impact on how the rest of the story will unfold. Each climax is a pivotal point: the story can take a turn to the left or to the right. The emotion of the story will, at its most fundamental level, be either happy, sad, or some derivation therof.
When tension or a climax occurs in a business, it is an incredibly important event. Most times there are multiple climaxes as time progresses, and there is ample opportunity for the characters’ emotions to sway back and forth. With each moment of drama, the characters gain experience—or I would even say they change their preconceived perceptions, which further affects the outcome.
Keep in mind, a story is the same whether it is a novel or a set of financial figures. In a dental practice, I see climaxes occur over time that are recognizable in a set of financial figures—moreso than in comparison to a novel, where it is the lives of the characters that are affected. Sometimes you see that the smaller, seemingly less important climaxes are met with positive outcomes, and numbers trend in a positive manner. Other times, you see that the smaller climaxes are met with a negative outcomes, and numbers trend negatively.
Each climax is a chance to learn through reflection. By reflecting, you bring awareness that can help you learn and answer the question of why a situation turned out the way it did. We work very closely with our clients to help with awareness. Through regular meetings and accountability, we help clients reduce the magnitude of negative climaxes and increase the effects of positive ones.
Think of it this way: Remember the last movie that was highly touted that you just couldn’t get to see, even though you wanted to? You couldn't get to it on opening night . . . or even a month after opening night. In that time period when everyone on social media and in your community was raving about the movie, were you made aware of some of the details of the story? Or, even worse, did your best friend completely spoil the ending for you? If so, the movie was ruined because the suspense and effect on your emotions was lessened from knowing the outcome of the story's climax.
Unlike the movies, however, spoilers are a good thing in business. My firm's job is to be the spoiler. By having a good team of professionals supporting our clients—people who are heavily involved in providing our clients with awareness and accountability—the negative effects of climactic moments in their businesses are lessened. We put them on alert for adverse events, so they know what is going to happen before it happens.
Spoiler alerts: good for business, bad for movies.
You may still have the question of how the business owner fits into the story. Let’s go just a little further as we are almost there, with one other major component to cover: the plot.
The plot is a term used to describe the events that make up a story, usually through a pattern or sequence of events. Every story breathes it: You can easily sense the major plots and catch tiny hints of the subplots. The major plot is where the story is going. It is what drives the twists and turns to help the characters get where the author wants them to go. The major plot defines the objectives and goals of the characters, and it follows the overarching theme from which they act.
Borrowing terminology from Christopher Booker’s book, The Seven Basic Plots: Why We Tell Stories, we can identify four major plots found in the dental industry today. The first is the “overcoming the monster” plot. Here, the protagonist has to muster the courage to battle against the antagonist, also referred to as “the monster,” to achieve their desired outcome. This is similar to a dental practice overcoming the new competitor in the area, changes in regulations, or staff issues that cause the office culture to suffer.
The second major plot often seen in dental practices is the “rags to riches” plot. In this plot, the protagonist has to overcome a major setback or dig deep into their core to overcome financial obstacles. It most often results in a happy ending. We see this type of plot play out with many dental startup practices. Thinking back to March of 2012, we witnessed many practices dig deep and change the way their Medicaid practices operated to climb back up the wall put in front of them by the Medicaid authorities.
The third major plot is “the quest,” which is a fast-paced and action-packed story where the characters overcome larger-than-life obstacles and experience exotic or uncommon places. I liken this to the many DSOs that are coming online and their journey to achieve a private equity buyout.
The last major plot line often seen in the dental industry is the “voyage and return,” where the characters take a journey and, along the way, find greater meaning and purpose through overcoming obstacles and pulling together as a team. This is probably the most uncommon plot line in any dental practice, much less any business. The reason this is so uncommon is because of the way that business owners view situations or obstacles.
Did you notice that obstacles are a big part of each of these plot lines? There is no denying it: businesses face obstacles. They are unavoidable. So how do you control the obstacles and the way that the characters feel about them and deal with them? Remember the point we are getting to about the owner? This is where it comes in. The owner is either main character or the author.
Every day, the owner has a choice to write their own story or let the story write itself. In order for you, as the owner, to control the outcome of the story and the impact from the climaxes, you must maintain your position as the author. As an author, you have to be diligent and maintain focus on how the characters feel about the situations you have written them into.
As trusted advisors to our dental practice authors, we help them become aware of how the story is trending and what may lie ahead so they can keep control of plot line.
One key piece that authors need to understand is the idea of subplots. Subplots are simply subordinate plots in a story. But on a deeper level, a subplot captures the purpose or theme of the story. Subplots can influence the major plot line and show how the characters handle obstacles. In most of the dental practices I have worked with over the years, I have noticed three subplots that commonly exist: comedy, tragedy, and rebirth. If you are writing a comedy, you will tend to find joy in the moment. If you are writing a tragedy, you will tend to rely on perseverance of self. If you are writing a rebirth, you will find a centering of self and attainment of purpose.
If we put everything together, this is how our metaphor concludes:
The dentist-owner must strive to be an author who understands the subplots taking place in their practice story. Every action taken is like another sentence written, which should be done with an awareness of how it will affect the overall business story.
In conclusion, tracking your financial trend lines will help you reduce negative impacts of obstacles and climactic moments. It will also help you accentuate things that positively affect your practice. Even though you are the author, you don't have to go it alone: By having a good team of professionals, you can get spoiler alerts and lean on people with experience to help you control your plot and reach financial and professional success.
Ryan Clower, CPA, is a partner at MWA CPAs + Advisors, a national accounting and advisory firm dedicated to serving leading dental practices, practice owners and dental service organizations. Clower specializes in practice management, financial accounting, practice performance optimization, practice valuation and practice acquisition and sales. Clower is a Certified Public Accountant. He graduated from the University of Texas at Dallas.
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