By Ross Martin, Accountancy Director at Hive Business.
I recently wrote about the kind of psychological profile dentists tend to have and I mentioned the Kolbe psychometric test. I’m aware that when it comes to re-inventing yourself there are loads of ‘tried and tested’ methods of finding out which roles you are truly suited to and that, although things like the Kolbe test are useful, they should be seen in the context of all the other ways we have of helping each other.
You could say real answers come from examining our inner life, not databases, but a funny thing happened after I wrote that blog, and I’m sure it proves my hunch that dentists do, on the whole, tend to be risk averse. I was talking to a client who was planning to open his second practice and he seemed genuinely shocked when I suggested that he may not get 100 per cent finance for it and may instead have to put in the £100k he had in his reserves. After all, I said, a bank would want full disclosure anyway and their first question was going to be: “Why aren’t you putting those funds in?”
His response was that he didn’t want to risk the capital. In that case the retort from the bank would be, I said: “Why? Is there a danger the business might not work?” At that point I could see the penny drop in his head — he realised he had arrived, exceptionally quickly and needlessly, on a cul-de-sac that would snuffle his perfectly viable business proposition. It got me thinking about the wider mindset of today’s entrepreneurs; I know times are hard and it’s tough to find a return on your money, but have we really arrived at a place where profits are perceived to be so hard to come by that no risk should be borne at all?
Quite the contrary. I think the dental industry today is on the doorstep of moving away from a ‘sole trade’ mentality and into a space with robust business foundations. More of our clients than ever are now exceeding the notional £1m sweet spot and in my experience dental practice owners with revenue above £1m nearly always deploy the efficiencies and effective mindsets of real entrepreneurs.
These £1m+ practice owners are the exceptions that prove the “dentists are risk averse” rule because they’re still quite small in number and they always blast their local competitors out of the water. Think of a practice owner you know with a £1m+ revenue; are they the sort of person who would ask a bank to finance 100 per cent of their new practice? No. My next question is, are you?
The word risk has a bad ring to it. Risk is actually a healthy part of an entrepreneur’s approach to life, and to reach £1m you need to be at least a little bit of an entrepreneur. I’m not talking about taking wild, blind leaps of faith and going with your gut on important decisions. A healthy approach to risk is simply being aware and open to it, not avoiding it on principle. Some business decisions will be riskier than others, but the magic secret (yet to be discovered by most dentists, it seems) is that you can usually find out how risky a course of action is, whether that’s by gathering information yourself or asking specialists like Hive for help. Once you know, you can devise ways of mitigating the risk. You can, for example, decide not to ask a bank to stump up all the cash for your new practice and instead throw in £100k of your own money.
In business, I consider avoiding risk to be riskier than facing it head on.
If you would like Hive to help your practice call us 01872 300232 or email us at hello@hivebusiness.co.uk.
