By Ross Martin, Accountancy Director at Hive Business.
At Hive as we become more involved in the business of dentistry we’re seeing a strange phenomenon: huge opportunity in the industry coupled with widespread underperformance by the majority of dental practices. Why? It’s a question we’ve grappled with in a few of our blogs, but now we wanted to give you the perspective of some of the most successful insiders I know.
We’ll be asking these people — all of whom have shown a formidable appetite for seizing business opportunities to grow their dental practices — the same five questions. First up is Dev Patel, 27-year-old principal of Dental Beauty in Swanley, Kent.
Dev purchased his first mixed dental practice in October 2015 and is already seeing 70 new patients a month after renovating, rebranding and heavily marketing his private treatments. He’s also been busy in other areas; he set up the online networking platform Dental Circle two years ago (it now has 6,000 members) and he’s working on a tech start up.
Here’s what he had to say…
In your opinion how has dental business changed over the past five years and what are your predictions for the next five?
I’ve only been working for three-and-a-half years but I’ve seen four main changes. First, there’s more litigation. Everyone’s scared of being sued by the GDC or patients, which I think is having a chilling effect on the willingness of dentists to do complex, high end treatments. Second, the market has been flooded with clinicians, making life harder for graduates. You used to be able to come straight out of university into a well paid job. Now people are struggling to work two or three jobs at the same time and are working longer hours for less. It’s tough. Third, linked to that, there’s been a shift in culture where dentists are more motivated to go on more courses, otherwise they’ll end up getting left behind. The cost of courses has, meanwhile, gone up so dentists are being squeezed. Fourth, the price of goodwill has risen because the Government has no money to increase further NHS dentistry funding for new NHS contracts. Nowadays you have to spend a lot of money on goodwill to get a practice with an NHS contract, and private goodwill has also inflated. The upshot is prices are very high and pay is low — a pretty difficult environment for people starting out.
In the next five years I think these trends will continue. There’s no chance the Government will create new NHS contracts because they can’t afford to. Associates are going to get paid even less. The NHS traffic light system that tells patients when they can get treatments will mean most UDAs are spent on prevention, stabilisation and hygiene. Hygienists and therapists on £30-£40 an hour can do that work, so dentists will only be needed for certain parts of more definitive NHS treatment. Practice owners will be increasingly able to hire younger recently graduated dentists to do basic therapy work (there is actually a serious undersupply of therapists; less than 100 qualify a year) and hire the more experienced dentists at bargain prices.
How do you deal with the dichotomy of your clinical and business roles?
I don’t stop working from 7am to 11pm. I’m down to three days clinical now: Tuesdays, Thursdays and Saturdays. On Wednesdays I go to Sheffield to do a two year dental implant diploma. Monday’s and Friday’s I work on the business doing management, marketing and training activities and going through any issues that need attention. I’ll have four or five staff meetings on each of these days. On Sundays I catch up with admin for everything — my practice, Dental Circle and my tech start up.
What advice would you give to ambitious dentists who wish to acquire or grow a practice?
My number one piece of advice is buy a practice that’s got growth potential. If you buy one that doesn’t you’ll pay a fortune for the goodwill and it won’t work financially. Many practices for sale have already reached their maximum potential. You’re not going to make money for a very long time if you’re paying off bank loans for years and growth potential is limited. It is vital to sit down, look through the accounts, take into consideration your lifestyle and also perform a SWOT analysis to see if the practice is right for you and a good long term investment with growth potential.
With infinite time and budget, what would you consider implementing to transform your dental practice?
I never make time an issue. It’s more the money side that’s limiting, as I need to invest in growth as and when it is needed. I’m going to buy the freehold in the next 12 months and I am currently expanding into the basement with two new surgeries. When I bought the practice only one surgery out of three was being used at any one time. They had a huge list of 11,000 patients, not all active, and we recalled loads of them in conjunction with a successful marketing strategy, so as a result all three surgeries are at full occupancy. We need the extra space for our foundation dentist contract and a full time therapist — we’re getting her to do a lot of basic treatments and she’s very good at private composites, NHS fillings on kids, whitening and ortho.
If you could give your 21-year-old self a piece of advice, what would it be?
Three things. First, learn a lot more at university. Unfortunately dental degrees are poorly taught these days, as the universities are still teaching the same syllabus as 20 years ago. They teach you old dentistry that isn’t used in the real world. You have to re-learn after you leave and it costs a fortune, so look into the latest minimally invasive treatment protocols and options while you’re at university and ask your tutors for help to understand these principles. That way, when you come out, at least you’ll be half way there. Second, get more practical experience. I only got to complete a few crowns from start to finish in five years at university! So get more hands on experience early. Third, start becoming business savvy as early as possible.
If you would like to discuss topics raised in this article or you would like to be featured in the Hive Five, get in touch on 01872 300232 or email us at [email protected].