By Ross Martin, Management Consultant at Hive Business
Appearances can be deceptive. Most people, dentists included, will judge a dental practice on its façade: PR, reputation, decor. Those things leave me cold because the prettiness of a practice never has a bearing on how successful I perceive it to be. I look primarily at the numbers, and the numbers are really quite wide ranging.
I’ve been involved in squat practices that spent a lot on looking beautiful, but even the prettiest squat won’t be profitable for two or three years at the very least. On the other hand I’ve seen lean NHS practices that are very profitable because they have negotiated appropriate deals with their associates and used their NHS contracts as a marketing opportunity to sell private treatments.
Real success has got to be about the difference between being and seeming to be. I see the numbers as the real truth, but of course you can view success through other lenses. Clinical freedom and professional gratification are two but there are more — it depends what you want.
It’s unlikely you want to be that ostentatious chap with a shiny new practice who is secretly teetering on the edge of bankruptcy, or the esteemed clinician who all your friends admire but who can’t afford to pay the school fees. The person who is really killing it is probably the quiet one plugging away in the background at a normal-looking practice, who drives only a newish Volvo and has a razor-sharp grip on the financial model of her business.
The marketplace is buoyant, so when we look at your business metrics we will be able to give you feasible ways to turn your bottom line into a killer bottom line. For instance, I just completed an intensive nine month programme to examine the profitability of a £2m practice and see what could be done to improve it.
From the outside the practice looked great, and the £2m revenue sounded impressive. It would have been easy for the practice owner to coast, but they wanted more. We identified that the business was overstaffed and we looked at different workflows to save a percentage on lab fees with no loss of service or quality to patients.
As a result they’ll be adding £100k of profit a year and £700k to their market valuation not by cutting costs but by reworking the business processes and creating 6% greater efficiency in the service lines.
As I said, the marketplace is buoyant, and so these things can be done if you’re prepared to look at the metrics I use for success instead of the ones all your friends use. Get in touch if you’d like to start the process.