I’ve been reflecting lately about the general path that dental practice owners tend to follow. You start off working as hard as you can for modest profits, not trusting associates to do the same job as you.
Profits slowly increase but inevitably you get bored or burnt out, or both, and so then you do take on the challenge of hiring associates. It works — the practice becomes less reliant on you to tick over.
Next you start to see your practice revenue grow irrespective of the clinical hours you put in and this modest success allows you to claw back some time for yourself again. If this part goes well you will retain control of your business, overseeing functions like marketing that see profits increase further while your time input falls even more.
There are two parameters at play here: your time spent in surgery and your profits. They remind me of an approach to corporate strategy formulation by the Boston Consulting Group.
It designed a very simple matrix to map where products are in terms of the two things that really matter: how much market share your product enjoys and how much its market is growing.
There’s only one place you want to be in an ideal world and it’s in a dominant market position in a growth market; this is what the Boston Consulting Group calls the star. At the opposite end languishes what it calls the dog, a product or service with a poor position in a low growth industry.
Maybe you hadn’t realised there were conscious choices to be made about your business model and you hadn’t thought about setting goals based on clinical time and profit.
It’s possible to place every dental practice in the UK on this matrix, and every practice will shift its position over time, probably without realising it, perhaps organically due to tiredness, success or as it opens a second practice; some consciously start deploying a new business model and move around the matrix.
When you open a second practice you can’t increase the time in the day so your business model has to change. That’s my key point for writing this blog; to move around on the matrix — to get out of the fool zone — you have to evolve your business model because you have limited clinical hours.
For example, as an associate you might be able to attain a profit of £135k. If you want £300k you will need to become an investor and then reach a £1m turnover. You need to change your business model.
There are a lot of dentists occupying the fool box and they haven’t quite realised it yet. Often I advise people to sell up and be an associate to escape it, but mostly they shrug and continue. The reality is there is no intrinsic value to being a practice owner and there are many penalties from stress and less family time, yet many dentists remain stuck on it.
Why? Things like social status, internalised self worth and living in an insular environment where competition among dentists for the best post grad garlands matters more than income.
The amount of times I hear people saying they think someone is really successful because they have three practices, all covered in glass, and the owner drives a Porsche. But what if the owner has the car on finance and works like a dog in all three practices, is that still success?
If you’d like us to help you identify where you are on the matrix and where you’d like to be, please get in touch.
