The Climate for Dental Practice Growth
The Global Dental Market is projected to cross $60 Billion (US) mark by the year 2024 due to growing demand for better oral hygiene services and rising disposable income of people globally. There is growth out there and the most ambitious and efficient dental practice owners want to get as large a share as possible.
Why the Climate is Right for Growing a Dental Practice
The current world population of 7.6 billion is expected to reach 8.6 billion by 2030, 9.8 billion in 2050 and 11.2 billion in 2100, according to a new United Nations report from 2017. A growing population leads to an increased need for resources, including dental care. As strain on public dental care increases, there is an increased need for good quality private dental care.
The population is also ageing and, as teeth are the only part of the human body that has no self-repair ability, they require on-going repair and maintenance, if they are to last into later years. This is why there will always be a need for dental services. As I have discussed with several clients in recent years, there is plenty of opportunity to grow a dental practice, as long as the scaling process is completed correctly.
Factors to Consider When Scaling a Dental Practice
In this section, I am going to discuss how to build a successful dental practice that is ready for growth and how to complete the expansion process. However, the first point I need to make is that it is imperative to understand that it’s not all about profits when it comes to growing a dental practice.
It is important to consider the costs of running a practice which are also likely to increase significantly over the coming years. For instance, payroll costs can account for almost 60% of revenue expenditure, on average.
These cost increases need to be factored into any decision to grow a dental practice. Other on-going costs that should be accounted for include non-payroll related expenses, such as the purchase of materials, payment of utility bills, insurance premiums and the cost of marketing.
The obvious lesson to take from all this is that any dental practice owner needs to concentrate their efforts on increasing revenue, as soon as they take over a practice, or start up their own dental surgery. It’s these efforts that will make expansion a real possibility.
Keeping a Good Team in Place
I believe in starting with the basics when it comes to growing a dental practice. Having the right team in place means that treatment and patient care are of high quality. This makes it easier to retain patients and to attract new ones. Retaining and increasing a patient pool is essential for any dental surgery that wants to see profits grow and expansion occur.
I looked at creating a team in the first chapter, however, that is just the beginning. Retaining a professional, caring and highly motivated team is essential for anyone who has ambitions to grow a dental practice. There are several points that I always reinforce with clients which can make staff retention a lot easier.
Creating a Positive Working Environment
The first step to take when creating a positive working environment in a dental surgery is to make sure that everyone is on the same page. Every member of the team needs to be aware of the vision of the practice and needs to be on board with it. Remember that a vision is not set in stone. As a practice evolves, so does the vision and can, therefore, be tweaked to reflect the way forward. You as a person and a business owner will also grow and evolve and you may want your business to evolve with you.
This vision needs to be at the centre of everything that happens in a growing dental practice. It also needs to be supported by other factors which make the surgery an excellent place to work. These factors may include:
- Emphasis on a good work/life balance.
- Additional benefits on top of salary.
- Use of the latest technology.
- Access to ongoing training and education.
- Recognition for a job well-done. This can be as simple as thank you or may involve a bonus scheme.
For dental professionals, one of the best ways to check for a good working environment in their practice is to put themselves in the place of every staff member and be honest about whether they would really want to work there. Doing this can be a real eye-opener; I’ve used it as a tool myself over the years.
Encouraging Good Performance
Every successful business needs to have an appraisal process in place, dental practices are no different. This should not be seen as a way of monitoring members of the team, it needs to be seen as a chance to develop, learn and be rewarded for success.
I have always found that 360 degree feedback is useful as part of this process. I have certainly learned important things about myself in this way. Remember, it’s about providing excellent patient care, and growing the business as a result. There is no place for an inflated ego.
In any successful appraisal system there are some important points to get right.
- Create clear and specific job roles so that there is no room for confusion.
- Create SMART goals which each team member can work towards achieving and be measured against. Creating goals which are Specific, Measurable, Achievable, Realistic and Timed gives people more chance of achieving them.
- Make sure that every team member has a personal development plan in place (PDP). This can be especially important in an SME like a dental practice where career advancement opportunities may be limited but development can be encouraged and supported.
- Use key performance indicators (KPIs) to measure performance so that measurement standards are consistent.
Performance appraisal reviews should normally happen every twelve months, but there should be opportunity to talk at any time.
According to Forbes,
“The most common form of performance appraisals compare our current performance levels either with our previous performance levels or the performance levels of our peers. When the two approaches were compared, the researchers found that comparing our performance now with our performances in the past was more effective because employees regarded them as fairer, especially on an interpersonal level.”
This makes sense in a dental surgery where staff numbers are limited and comparing peers may promote discord rather than the harmony that is required. The aim of any successful appraisal system is to improve individual and overall performance in a motivational and supportive manner.
Communicating is Key
I have never come across a client (yet) who has disagreed with my assertion that effective communication is at the centre of any successful dental surgery. However, with the best will in the world, communications become confused and messy if there is no strategy and plan in place. These plans can include factors such as:
- Defined communication timelines.
- Creation of a staff Intranet system.
- Daily and weekly team meetings.
- Defined methods of communicating management plans and concerns
Poor communication tends to lead to poor performance, reduced patient satisfaction and reduced chance of growth. Never take communication for granted.
These are all factors that can help keep a good team in place in a dental practice. The longer a good team is retained, the more likely a practice is to thrive and grow.
Retaining New Patients
Every dental practice needs to attract and retain patients in order to secure the revenue required to keep afloat and grow. Knowing how to do this is mostly common sense, but there are some essential points that can be easily forgotten when distracted by the setting up and day to day running of a dental surgery.
A Good First Impression is Vital
It is very difficult to get back on track once a bad first impression has been made. It’s important that staff are reminded to be professional and courteous at all times. It is understandable that this can be difficult at times, but it’s an essential part of the job.
The waiting area you provide is also important when it comes to making a good impression on new patients. It should be welcoming and friendly. It may be a good idea to use extras, such as plants, a children’s play zone or a fish tank, to make people feel calmer, less anxious and more comfortable being at the Dentist. This type of environment is especially important for any patient who is nervous on their first visit to the surgery.
Be Engaging With Patients
There is a fine line between remaining professional and developing a rapport with patients. Obviously, no dental professional needs to be best friends with everyone they meet, but some friendly interaction is a good thing. For instance, if a patient has mentioned moving to a new home when they last visited, it may be a good idea to ask how they have settled in.
No-one expects dental professionals to remember every detail about every patient but asking about little things and being friendly can make a patient feel more like a person that matters rather than just an appointment time. There are few things worse for a nervous patient than visiting a dentist who seems distant and uninterested, so it’s worth making the effort. It will pay off in the long run.
Use Friendly Prompts
Like any business, it’s a good idea for a dental practice to maintain contact with patients. People have busy lives, and they tend to put actions like going to the dentist to the bottom of the pile. It’s a good idea to remind patients that it’s time to book an appointment for a check-up. It is almost like a form of marketing. Do not be too demanding; a brief and friendly phone call, text or email will do. The rest is up to them.
Monitor Patient Retention
Playing it by ear, when it comes to patient retention, does not work. It’s important to monitor retention rates. A dental professional who is looking to scale their practice needs to aim for high retention rates, as well as attracting new patients. If retention rates are down at 50-60% then it’s really time to worry. There is obviously a problem that is causing people to look elsewhere for dental treatment.
The best way to determine if any improvements are required to the practice environment, patient care or treatment, is to ask the patients themselves. Regular patient surveys are a good idea, and can identify issues that may not be apparent to the team at the practice. They are especially important if there is obviously an issue with retention.
It is absolutely impossible to grow a dental practice if patients are not being retained, so careful consideration of these points is essential.
Expert Accounting Tax and Payroll Services
Patient treatment and care, whilst both are vital to the success of your dental practice, are not the only factors that you need to consider. When it comes to getting the job done, retaining knowledgeable and high performing dental professionals and reception staff is important but there are other roles you need to carefully consider to aid you in the success of growing your dental practice.
There are roles which need to be fulfilled which are essential to the success and growth of any dental surgery. These roles involve dental accountancy and tax. Over the years, our team has helped numerous dental professionals with their accountancy and tax requirements, for both individuals and for practices and groups.
The Importance of Professional Dental Accountancy and Book-Keeping
Professionally managed accounts are an asset to any dental practice owner who is looking to grow a dental practice. Having this service in place means that the performance of the practice is transparent. This makes it a lot easier to make any necessary adjustments to performance and to make certain of a smooth growth and expansion process.
I have worked with both private and public clients to ensure all accountancy aspects of their business were run smoothly. The result was that they were able to concentrate on providing excellent care and treatment, while I made sure that secure financial foundations and processes were in place, in order to aid growth.
Professional help with book-keeping and payroll is just as important. Working with software such as Xero and Quickbooks is a skill and it often makes more sense to outsource this work. Leaving accounting and book-keeping to professionals means that the surgery team can concentrate on the day to day running of the business, safe in the knowledge that the business accounts are being monitored and maintained and that any issues can immediately be identified.
The Importance of Professional Tax Advice
Saving tax while complying with regulations is something that every dental professional and practice can benefit from. A professional dental accountant can help with tax savings which releases more cash to invest in the expansion of the practice.
Having a tax expert on side means that the surgery can grow at the same time as being fully tax compliant. It’s a win win situation.
Financing the Growth of a Dental Practice or Group
When you grow a dental practice, there is likely to come a time when significant additional funding is required, in order to scale further. This funding may be needed to purchase new equipment, to extend a current practice, or to buy more dental practices, to become a group.
I discussed financing the purchase of a dental practice in the first section of this book, and I do not want to repeat myself. However, there are some points that are worth mentioning, including how important it is to work with professionals and to have personal and practice finances in order.
Work With Professionals When Looking For Growth and Acquisition Financing
It is as important to work with expert dental accountants and dental solicitors when financing and buying an initial dental practice, as it is to do so when growth and further purchasing is required. Never forget that a dental surgery owner’s talents lie with running the practice itself and not with accounting or legal implications. It’s better to work with experts to deal with these factors. I’ve worked on these aspects of scaling a dental practice with clients on many occasions and it’s made the process a lot simpler for them.
Being Prepared to Apply for Financing
It stands to reason that any bank or other financial institution wants to reduce the risk of non-payment. For this reason, they look to lend to businesses that can prove they have reliable revenue and are in a position to make repayments on time.
It’s worth bearing this in mind when making decisions to grow a dental practice. Planning ahead is essential. Ideally, plan 10-12 months ahead of time, and make sure that revenue is optimised and accounts are up to date and accurate before applying for funding. When funding is applied for, be prepared to provide a significant amount of documentation including:
- An up to date business plan.
- Up to date and accurate accounts (personal and business).
- Up to date tax records.
- Details of expenditure.
- Detailed analysis of proposed finance spending and growth of the practice.
Having everything in one place before applying for growth or acquisition funding makes a successful outcome more likely.
Expanding a Current Dental Surgery – What to Consider
For anyone who is successful in scaling a dental practice, there will hopefully come a time when physical expansion is necessary. There may be an option to re-design the current surgery in order to make this happen, or it may be necessary to acquire additional property in order for expansion to take place.
Optimising the Use of Current Space
The first question to ask when looking for room to expand is, “how effective is the current use of space?” For instance, staff break rooms do not need to be large, luxurious spaces. They simply need to be a place to take a reasonably comfortable break before returning to work. It may be possible to use some of this space as a treatment area.
Unused hallways and storage areas can also be utilised. In some circumstances, taking the time to consider the current usage of the entire surgery space, and coming up with new design options, can save on the cost of having to acquire additional premises.
Dealing With the Landlord
This will only be an issue if the leasehold of the property is not owned by the dental practice. If this is the case, it’s important to discuss any refurbishment or re-design ideas with the landlord, before any work commences. Failure to do so could lead to legal complications further down the line.
Depending on how good or bad the relationship with the landlord is, there could be an argument for involving a dental solicitor in the discussions, or at least seeking their advice and support. Keeping your landlord sweet is Number 1 in leasing 101. If you are trying to refurbish or re-design, try to do everything by the book so you don’t face any issues with your landlord.
The Issue of Planning Permission
If the purpose of the premises is to remain the same, it’s unlikely that planning permission will be needed. However, there may be times when there will be a need to acquire planning permission when extending a dental practice. For instance, part of the property which is currently being used as a residence may be converted for business use, or neighbouring residential property may be purchased for conversion.
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