Dental Entrepreneur
CLASS OF 2015 | WINTER ISSUE
Business Beyond the Classroom
Jaymie Coria, D.M.D. My Story - Where I Was and Where I’m Going
The Critical Factors of the Business of Dentistry The Fourteen Million Dollar Decision
Like us on Facebook!
SEE HOW PATTERSON DENTAL SUPPORTS PRACTICE OWNERS BY VISITING
OFFTHECUSP.COM/CHANGINGLIVES. Patterson supports dentistry’s ability to positively change lives. If you’re ready to lead your patients, staff and practice into a new era of dental care, contact your Patterson representative today! P150164b (8/14)
“
Forge your own path.
DR. WILLIAM SHATTUCK KRISTEN A. BURRIS DDS FAMILY DENTISTRY SHATTUCK, OK
”
PATIENT EXPERIENCE, PRACTICE LIFESTYLESM PATTERSONDENTAL.COM | 800.873.7683
Winter 2015 VOLUME 17, ISSUE 2
Editor & Publisher Anne M. Duffy RDH Assistant Editor Michael Duffy Production Ruthie Gordon Publishers Press Inc. Editorial Board Dr. Gene Heller Dr. Harold Sturner Dr.Ryan Dulde Dr. Earl Douglas Rachel Teel Wall, RDH,BS. Dr. Tom Snyder Derek Champange David Rice Layout and Design John O’Connor
Class of 2015 Contributors Jaymie Coria, DDS Earl Douglas, DDS Cathy Jameson, PHD David Lee, DDS Bob Levoy
Garrett Ludwig Rhonda Meyer, VP Rhonda Mullins Joel Small, DMD
Charter Sponsors Oral‑B Laboratories Ultradent Products Inc. Procter & Gamble Wm. Wrigley Jr. Corp. Glidewell Laboratories Benco Dental Co. Tess Corp. Dental Care Alliance
The Pride Institute The Snyder Group McKenzie Management Caesy Education Systems, Inc. Warner‑Lambert Co. Phillips Health Care Oxyfresh Worldwide
Editorial Office
12233 Pine Valley Club Drive Charlotte, NC 28277 704/953-0261 Fax 704/847-3315 anneduffyde@gmail.com Send materials to: Dental Entrepreneur Magazine 8334 Pineville Matthews Road Ste. 103-201 Charlotte, NC 28226 When you have finished enjoying this magazine pass it along to a friend and PLEASE RECYCLE Copyright 2014 Dental Entrepreneur, Charlotte, NC Material herein may not be reproduced, copied or reprinted without prior written consent of the publisher. Acceptance of advertising does not imply endorsement by the publisher.
2 Winter 2015 Dental Entrepreneur
Welcome
CLASS OF 2015 WINTER ISSUE VOLUME II
I have to admit, that I was blown away today. Here’s why. Yesterday, Earl Douglas (a.k.a. ADS South and founder of ADS Transitions) invited my husband and me to a “little seminar” that was being held at Flemings in Charlotte, N.C. Timing was not great for us, as we had been slammed the last couple of weeks and we were truly looking forward to a relaxing weekend. This invitation put a bit of a monkey wrench in our plans. Because Earl’s mentorship over the years has meant so much to me, Tom and I found ourselves up at 7:00 a.m. on a Saturday morning heading uptown (your downtown) to join in the discussion. What we found was what we knew but needed reminding - dental professional experts are some of the best people in the whole world. They have no scarcity mentality, they are only abundance minded. They truly believe in the win/win possibilities of all dental professionals, and it is their life’s work to help dentists create a thriving practice and an all-embracing life! It goes to show, when opportunity presents itself, take advantage of the possibilities. There is so much to learn after you graduate dental school. You will soon find out what it is that you don’t know you don’t know. That is why I am thrilled to highlight Dr. David Lee and the Hinman Dental Conference in this issue of Dental Entrepreneur: Business Beyond the Classroom. Yes, their life’s work is to educate dental professionals of all levels, but the event is critical, in my opinion, for recent dental school graduates. Not only is the Hinman a great way to learn more about the newest technologies, products and services in a single space, but it is also an excellent way to continue your education and network with key members of your chosen field. Cathy Jameson, founder of Jameson Management, was kind enough to write an interesting piece that discusses the critical factors of the business of dentistry. Cathy covers 12 of the main issues that dentists will face at any point in their career. From production to collection to teamwork to leadership, Cathy’s comprehensive look at how to develop a successful practice is key to getting off to the right start. And I’m quite pleased with the addition of Bob Levoy to this edition of DE. As a seminar leader and author of seven books on practice management, Bob offers insight to a survey he regularly conducts asking staff members what they like and dislike about their respective practice. While all responses are anonymous, the results can really inform how you lead as an employer or associate moving forward. There are many, many other excellent contributors to our Winter 2015 magazine, and I encourage you to take the time to read all of our articles and take note of our sponsors. A post-graduation world in the dental industry can be daunting – believe me, I know. While I’m sure the clinical chops are there, sometimes the business side of things can get murky. We at Dental Entrepreneur are dedicated to helping clear those muddy waters. Congratulations and good luck! All the best,
Anne M. Duffy Publisher
DentalEntrepreneur.com
Contents Prologue
4 My Story - Where I Was and Where I’m Going Jaymie Coria, DDS
Getting Started 8 The Fourteen Million Dollar Decision Earl Douglas, DDS
12 Develop a Five-Year Plan to Ensure Longterm Success Rhonda Meyer, VP
16 Can You Really Profit By Design When Planning an Office? Garrett Ludwig
Business Fundamentals
The Power To Succeed
20 The Critical Factors of the Business of
34 What Kind of Culture Will You Create?
Dentistry Cathy Jameson, PHD
Joel Small, DMD
23 Top 5 Ways for an Associate to Build a Practice Within a Practice and Succeed! Rhonda Mullins
Practice Builders 28 What Can Organized Dentistry do for a New Dentist, Professionally and Personally? Dave C. Lee, DMD
32 What Team Members LOVE - HATE About Their Jobs Bob Levoy
DentalEntrepreneur.com
Dental Entrepreneur Winter 2015 3
Prologue
My Story
Where I Was and Where I’m Going Jaymie Coria, DDS
N
ot long ago, I attended a class held by the local Dental Society in my county, and I was seated at a table with six other female dentists. Our ages spanned from 30-60 years old. Reflecting back on that evening, that table was a great representation of the different stages in a dentist’s career. There was a dentist who was close to retirement, and one who was just starting out. There was also a dentist who had relocated from Houston, Texas to Southern California and had sold her successful practice only to find herself struggling as an associate dentist working for someone else. There was a common story that resonated with all of us as we sat and talked about our experiences. Most of the skills we acquired as solo business owners or partners in a group practice were not skills that were taught in dental school. My story is not all that unique from any other dentist. I sort of “fell into” being a solo practitioner in private practice. I graduated from UCLA Dental School 11 years ago, and I had my career mapped out for me. My plan was to graduate school and practice with my mother who is also a general dentist in her own private practice. I had this happy thought that she could be my mentor in the early stages of my career. However, as it came closer to graduation I became anxiety-ridden at the thought of being faced with the autonomy of “practicing” dentistry on “REAL” people. Thoughts of making a mistake during a crown prep, root canal, or worse yet, a tooth extraction filled my head; I worried about making a major mistake and being unable to finish a procedure. I spoke with one of my favorite professors, Dr. Lindeman, about this, and he suggested that a one-year residency in general practice at a hospital would really help me to connect the didactic information I learned with the practical skills I would gain in a hospital setting. He also shared his own experience as a young dentist faced with the same thoughts. So I applied and was accepted at the Veterans Affairs Medical Center in West Los Angeles to further gain more experience and expand my knowledge clinically. It was the best decision I made in my career. It was incredible to have the guidance of the instructors in all the disciplines of dentistry whose sole purpose is to advise me on how to formulate a treatment plan for complex cases, or simply give me suggestions on how to
4 Winter 2015 Dental Entrepreneur
adjust a patient’s occlusion after a crown cementation; sit them up rather than leaving them reclined back since gravity changes their muscle function. I learned most of my clinical skills in my GPR program, which to this day I still utilize. I was inspired by Dr. Callahan, who taught me the most basic skill of being a dentist, the compassion and innovation that drives our profession. I can go on and on about all of the different tips and tricks that these amazing instructors shared with me, but I will get to the point of this part of my journey. This was the time in my career I was able to practice dentistry in the most ideal sense of treating a patient; it was without the constraints of patients’ finances or the pressure to produce a certain amount of dentistry for a healthy profit margin. When I completed my program, I was fearless and confident to take on the most difficult and challenging patients this world had to offer. I also decided I wanted to gain more experience in diverse communities, instead of going to work with my mother, which sorely disappointed her. I worked seven days a week for the first six months after entering the work force. I practiced at a dental office one day a week in East LA, two days in Santa Clarita, another one in Pacoima, Canoga Park, and Lomita. Most of my friends thought I was crazy for doing this since I had such a great opportunity to settle into a small private practice with my mother. I don’t know how to explain it now, but my instincts told me I was on the right path.
DentalEntrepreneur.com
Looking to purchase an existing practice or start one from scratch? We have the financing you need to make it happen. You can rely on the industry leadership and experience of Bank of America Practice Solutions. We have provided financing for thousands of healthcare professionals and understand the challenges that accompany them. Let us help you. We encourage you to call the experts at Bank of America Practice Solutions to discuss.
Practice acquisition*:
Practice start-up*:
• Up to 100% financing for your practice — up to $5,000,000
• Up to 100% financing for everything — architectural fees, construction, equipment, cabinetry and more
• Principal reduction and early payoff options • Practice purchase and real estate combination loans
• Working capital to help you get started • Competitive terms
• Working capital to help you with the transition
• Rate lock through the project build-out phase
• Competitive terms
• Demographic Site Analysis to help you select the ideal location and attract the patient base you want†
• Practice Heartbeat® program access at no cost♥
• Practice Heartbeat® program access at no cost♥
Let’s talk For more information, contact one of our Practice Specialists:
Call 800.428.2847 Visit bankofamerica.com/practicesolutions or scan the code to learn more
* All programs subject to credit approval and loan amounts are subject to creditworthiness. Some restrictions may apply. The term, amount, interest rate and repayment schedule for your loan, and any product features, including interest rate locks, may vary depending on your creditworthiness and on the type, amount and collateral for your loan. Bank of America may prohibit use of an account to pay off or pay down another Bank of America account. ♥ Bank of America Practice Solutions makes no express or implied warranties with respect to any aspect of the Practice Heartbeat® program, nor does it guaranty any success or promise any results, and hereby disclaims the same to the extent allowed by law. The opinions of Bank of America Practice Solutions are based upon prior experience, and it makes no promise or guaranty that you will achieve any particular measure of success or results by participating in the program. You are not bound by any recommendations provided under this program and retain full responsibility for the results achieved by your professional practice. † Bank of America Practice Solutions engages Scott McDonald & Associates, a national marketing firm specializing in demographic research, site analysis and profile reports for health care professionals to produce a demographic report to assist health care professionals in evaluating where to locate their professional practices. Scott McDonald & Associates charges a fee for this service, which is passed on to the customer. Bank of America Practice Solutions tool within this advertisement requires Internet access. Bank of America does not offer or provide an Internet service provider for your personal access and usage purposes. Please check with your Internet service provider due to charges and fees which may apply. Bank of America is a registered trademark of Bank of America Corporation. Bank of America Practice Solutions is a division of Bank of America, N.A. ©2015 Bank of America Corporation | AR9AB890 | Rev 12/14
Fast forward to a year of working at multiple locations, I was offered a fiveday associate position in the Santa Clarita dental practice. It was a start-up private practice, which was owned and managed by a female dentist and her husband. He served as both IT specialist and office manager. I practiced in that office for almost nine years and helped grow her practice from a small six operatory private practice into 13 operatories! I learned most of my business management skills from working with her, but I left her practice to relocate to Orange County. There, I worked for two corporateowned dental practices. I also tried working with my mother for five months, with the intent of entering into a partnership with her, running the family-owned practice. Through these experiences, I learned that I did not agree with the philosophy of the corporate-owned dental practice since it was driven by the profit margins. I also learned my mother and I had different philosophies in the business side of dentistry. We were both at different stages in our careers. I was pushing to grow her practice, and she was satisfied with how well it was doing. This was the time of my career that I started to understand the business side of the profession. In May 2012 I made one of the biggest decisions in my career. I purchased an existing dental practice in Placentia, Calif. This opportunity was purely accidental. I was actually seeking professional advice from Mr. JW, an attorney who specializes in the dental industry, in considering two partnership opportunities with which I was faced. One was a partnership with the female owner dentist in private practice with whom I had been working with for the last nine years, and the other one was with a corporate-owned dental practice in Orange County. Mr. JW had told me about a private dental practice that was going to be put up for sale and asked if I had ever considered a solo private practice. I remember telling him that I had been holding off on the idea of starting or buy6 Winter 2015 Dental Entrepreneur
Owning a solopractitioner private practice was the only way I could fulfill my long-term career goals. ing practice without a partner because it seemed like a daunting and risky business venture. I was experiencing similar feelings as I had when I was graduating from dental school. I knew from hearing about the struggles from my mother and friends that managing a business was not easy. However, after considering the advantages and disadvantages of a partnership in private practice or corporate dentistry, I realized there was only one choice for me; Owning a solo-practitioner private practice was the only way I could fulfill my long-term career goals. In my journey from where I started to where I ended up, I realized what was important to me. I wanted to be able to make independent decisions. I can only imagine that for a partnership to be harmonious, each partner’s philosophy in dentistry and business has to be in sync. I found that even with my own mother, our philosophies in business did not quite match up. Daily decisions on things like managing staff to purchasing dental equipment have to be deliberated and agreed upon by both partners. Becoming a solo-practitioner in private practice was the right decision for me. Owning a business in most industries is consuming, frustrating and exhilarating, especially when you are doing it on your own. When I acquired my dental practice, I hired a transition specialist, Teri McAviney, who coached me in managing my team and put some practice management systems into place. Having developed strong dental skills earlier in my career allowed me to focus more energy on developing the
business skills required to run a practice. It has been more than two years since I took over a 60-year old dental practice, and it has not been an easy process. I was a young female dentist replacing an older male dentist and was not well received by the staff I inherited and certain patients. I can honestly say that it’s probably been one of the most difficult times in my life and career, but it has also been the most rewarding. I have now found a team who believes in and shares my vision.
Growing up the daughter of a dentist, Dr. Jaymie saw first hand the fulfillment and joy it brought her mother to help people not only have healthier teeth, but also gain more confidence in their smiles. Eager to experience the same joy, Dr. Jaymie earned her Bachelor of Science in Biology degree from UC Riverside, followed by her Doctor of Dental Surgery degree from UCLA School of Dentistry. She further developed her skills during her general practice residency, where her training emphasized comprehensive dental care for medically compromised patients. During the program Dr. Jaymie completed advanced training in oral surgery, prosthodontics, and endodontics, as well as classes in dental practice management, medical emergencies, pharmacology, oral pathology, and advanced treatment planning. Dr . Jaymie enjoys providing dental care, hygiene, and education to Southern California’s underserved communities, volunteering with both UCLA and USC, as well as serving as a Latin American Dental Clinic Volunteer and a Regional Area Medical Volunteer. She has also traveled abroad to provide dental treatment and help increase access to dental care for low income and indigent families in Manila, Phillipines (University of The East, Phillipines Missionary Work).
DentalEntrepreneur.com
Getting Started
The Fourteen Million Dollar Decision Earl Douglas, DDS, MBA, BVAL
S
uppose that when you begin your dental career that you will have to check a box like one of these:
◻ Yes, please endow me with $14,000,000 extra cash at the time of my retirement ◻ No thanks, keep your $14,000,000 and assume control of my profession while you’re at it But believe it or not, while you’re not given this form with this questionnaire, you will face this decision when you enter the practice of dentistry. I realize that it seems absurd to ask a dentist if he or she would like to have $14,000,000, more or less, when they retire, but the question and the outcome is there, whether we’re aware of it or not. Perhaps the best way to explain this mystifying proposition is by relating a true example of practice finances and how these revelations were discovered. Last year in New Orleans, I was having breakfast with a lender for practice acquisitions and asked him in passing why large corporations buy and set up dental practices. He pointed out that while they could park their money in a cash account and earn 1-percent interest, they discovered that they could get a 20 percent or better rate of return on their investment from ownership of dental practices. I found that hard to believe, if not totally absurd! How in the world could anyone expect to make a 20-percent investment return in today’s market? Even Bernie Madoff didn’t offer that kind of return. To satisfy my morbid curiosity, I examined a practice we were marketing at the time to see what rate of return could be realized. The practice had revenues of $1,170,000, with hygienists producing $315,000 of the gross and the purchaser projected to do $855,000 in revenues. I know that sounds like a lot of work for one dentist to produce, but if the purchaser worked five days per week for 45 weeks per year, it would only require daily collections of $3,800 - an amount that should be easily achievable. As the purchaser gathered speed and confidence, this production level could be achieved in a four-day week working 45 weeks per year. Another issue that purchasers are very concerned about is how 8 Winter 2015 Dental Entrepreneur
to afford the payments to buy a practice. To help dispel the sticker shock, I like to point out a very interesting relationship. Consider the $300,000 income from the hygiene department of this practice and deduct the salaries for the hygienists of $130,000. You have a profit from the hygienists of $170,000 per year, which is more than ample to cover the $120,000 per year in loan payments. So in reality, the hygienist is paying for the practice one and a half times each month. What could be nicer than that? Well, I’ll tell you. That hygiene profit covers the loan payments each month for the practice and the building! So if the buyer is worried about the price of entry into their own practice, let the hygienist pay for both the practice and the building as in this practice. Now, let’s get back to understanding those ridiculous profits we brought up. Just how are they figured? First, it’s important to understand precisely what is meant by the term “profit.” Profit is not the pay for the work one does. Compensation is pay. Profit is money that is over and above what a business owner earns for the work they do. Profit is the icing on the cake. It is the return on the purchaser’s investment. Using the example of this actual practice, here’s how we compute the actual practice profit. Gross Revenues
$1,170,000
Subtract Operating expenses
$ 700,000
Subtract compensation for owner’s work
$ 300,000
Add Tax Savings Practice Profit
$
43,000
$ 213,000
The total investment in this case is $749,000 for the practice purchase plus another $56,000 in working capital for a total loan of $805,000. Divide the profit of $213,000 by the investment of $805,000, and you have a return on investment of 26 percent in
DentalEntrepreneur.com
Please reach out to our authors and our advertisers. They care about you and keep us in print!
If you have any questions, comments, or responses to our magazine, please connect with us on Dental Entrepreneur Magazine — our official Facebook page! Read us online at dentalentrepreneur.com Send your questions or comments to anneduffyde@gmail.com dentalentrepreneur.com
the very first year! And remember, that’s over and above the compensation of $300,000 the purchaser received for the work they did. You’re probably wondering about where are the payments for the loan coming from. The payments are being paid out of the profit, so we’re using part of the practice profit to pay those payments, which remember, are being paid by the hygienist one-and-a-half times over for the practice and the building combined. And it gets even better! Besides having the hygienists pay the payments for us, in practically every practice sale, the entire price of the practice is deductible and/or depreciable. So before you figure how much you owe in income tax, you will subtract the tax deductions and depreciation for that year, which is how much income on which you didn’t have to pay tax. In this particular example, the purchaser had deductions of $103,000, the amount on which they didn’t pay tax – resulting in federal and state tax cash savings of approximately $43,000. This figure will reduce and finally disappear as depreciation runs out. The loan payments will also end when the practice and building are paid for, and then those $120,000 payments will go into the purchaser’s pocket. To keep things simple and enable us to compare apples to apples, let’s just assume that fees, production and overhead will remain constant throughout a 33-year career we’re going to compare. Let’s see what those annual profits, less the depreciation benefits as they decrease and expire, can do when invested for 33 years at only 3 percent interest compounded. After 33 years, the profits with compounding interest, will amount to just over $10,000,000. Check the first box to get this result. For another point of view, let’s see what happens when we check the second box and politely decline the $10,000,000 benefit and go to work for corporate dentistry. You’re thinking, “What’s so bad about that? I get a paycheck and don’t ever have 10 Winter 2015 Dental Entrepreneur
In comparing owning your own practice to being a corporate employee, there are some key considerations to think about. any debt. How wrong can that be?” Well first off, we paid our purchaser owner 35 percent of their collections as salary, but corporate dentistry scales are somewhat less, usually around the 25-percent mark. So first off, a corporate dentist who produces the exact same amount of revenues over a 33-year period will earn somewhere around $4,000,000 less for generating the same revenues as our purchaser did. Oh, and remember that corporate dentistry participates in many reduced-fee plans, which means that the employee might have to produce one-third more dentistry in his or her career to generate the same revenues. Corporate dentists forfeit the profit that a purchaser owner will collect. There’s no profit, no compounding interest, no tax benefits, no equity and no control over one’s career. You may not be able to use the lab of your choice or supplies or your choice, or even choose your own assistant. You might not be able to get health insurance or disability insurance of your choice. You may have to meet quotas of production that could exceed what our purchaser owner is comfortably producing. You may have to use high-pressure sales techniques to sell treatment. You could be dealing with many issues that are not to your liking that the purchaser owner does not. Another factor that is not readily apparent is that when dentists work for corporate dentistry that corporate dentistry will gain control of the dental
profession. When the medical profession got absorbed by hospitals and insurance companies, physicians who thought they were getting a safe and easy alternative to running their own practices became very frustrated with the results. But too bad, the toothpaste was already out of the tube, and it wouldn’t go back in. In comparing owning your own practice to being a corporate employee, there are some key considerations to think about. First, the owner will have accumulated $10,000,000 in accrued profits and compounded interest that the corporate dentist did not receive. The owner dentist will also have received $4,000,000 more in compensation for doing the same amount of production and not be subject to low fee schedules that require more production for the same collections. Secondly, the owner will have control over all measures of the their practice, including the staff, treatment planning, the laboratory of choice, materials of choice, insurance benefits, retirement plans and contributions and many more. Corporate dentists rarely, if ever, have control over any of these key points. So as you start your career, you now know the rewards that are yours to claim or forfeit and control of the dental profession is moving toward the fork in the road of a profession owned by professionals or a business controlled by business owners. Decide carefully when you check that box.
Earl Douglas, DDS, MBA, BVAL, is the founding president of ADS, a company with independent practice brokers, appraisers, and consultants nationwide. His company, ADS South serves the Southeast and South Central US. He can be reached at 770-664-1982 or at douglas@adssouth.com. Visit the website at www.adssouth.com
DentalEntrepreneur.com
BY THE ARTIST EVOLUTION
Build Your Practice We connect your practice with new and existing patients
• Comprehensive Brand in a Box
through brand development, premium websites, social
• Social Media Made Simple
media development and management, and
• Premium Websites • Fan Base Management • Marketing Campaigns
strategic marketing campaigns.
CON NEC T WI prac TH U tice S imag
prac prac
age
672-
ADS.south209
2/25/09
1:42 PM
ders
ageb
ticeim
800-
ebuil
ticeim
.com
uilde
rs
4995
Page 1
Practice Makes Perfect “Dr. Earl Douglas and the staff at ADS South have been real helpful in steering me in the right direction in the purchase of my first practice. Dr. Douglas’s experience, organization and detail-orientation, pointed out to me where improvement is needed and how to go about achieving it.” Elizabeth H. Guerrero, DDS Get off to the perfect start. Call your ADS transition specialist for AL, GA, LA, MS, NC, SC, TN and VA today.
ADS South (770) 664-1982 ADSsouth.com
Getting Started
Develop a five-year plan to ensure long-term success
Rhonda Meyer, Vice President
M
ost dentists experience a range of significant transitions during their professional lives — from buying into a practice partnership, to purchasing or starting a new practice, upgrading and expanding their office and planning their practice sale. The need for financial support during your professional lifecycle will vary depending on the next transition on the horizon. To ensure you are positioned for maximum success during these periods of growth and change, create a living five-year plan for your practice that projects future development and defines financial success. Let’s look at some of the key elements of a meaningful five-year practice plan: Practice growth milestones The first objective of your five-year plan should be to map out the key growth milestones you expect to achieve during the next five years. These can include both personal and practice growth. For example, if you have just graduated from dental school, a key milestone over the next five years might be time associating with a practice, perhaps culminating in a buy-in. Or you might want to jump right into a practice purchase or start-up. Create a plan that shows when you will launch your practice, expand operatories, and upgrade equipment over the next five years. Outline exactly how you want your career and practice to grow. With that vision in mind, you will be able to prepare physically, emotionally, and financially. Professional team of advisors Identify a core team of reliable advisors who can support and guide you through the various phases of your career.While individual members may change as your career evolves, your core group should initially include: • Lender or bank – Helps protect your practice investment by structuring financing that fits within your budget • Attorney – Represents your interests as your advocate, negotiating and drafting contracts, leases, and employment documents, and providing tax advice and planning 12 Winter 2015 Dental Entrepreneur
• Accountant – Protects your business by providing accurate practice accounting and filing of tax documents • Insurance broker – Preserves practice value by insuring it against loss Make sure you surround yourself with people you trust to help you meet the goals defined in your five-year plan.
DentalEntrepreneur.com
Wells Fargo Practice Finance
Thinking about practice ownership? Let’s talk about your options.
When you’re ready to purchase or start a practice, count on Wells Fargo Practice Finance to help you achieve your goals: · Up to 100% financing to help you acquire an existing practice or start one from scratch · Competitive fixed-rate loans with preferred pricing for ADA® members · Complimentary business planning tools, educational resources, and practice management consulting to help you successfully manage your transition to ownership
Get the facts with a free Practice Starter Kit, including our latest issue of Strategies for Success, a New Dentist Planner, and an easy-to-use business plan template.
To get started, call 1-888-937-2321 or visit wellsfargo.com/thenewdentist to request your free Practice Starter Kit. Wells Fargo Practice Finance is the only practice lender selected especially for ADA® members and endorsed by ADA Business ResourcesSM.
All financing is subject to credit approval. ADA® is a registered trademark of the American Dental Association. ADA Business ResourcesSM is a service mark of the American Dental Association. ADA Business Resources is a program brought to you by ADA Business Enterprises, Inc., a wholly owned subsidiary of the American Dental Association. © 2014 Wells Fargo Bank, N.A. All rights reserved. Wells Fargo Practice Finance is a division of Wells Fargo Bank, N.A. 2397-1214-Dental-Entrepeneur-Winter
structure for mapping out exactly when and how you will market your new services in order to build your practice and meet your goals.
Cash flow projection A well-constructed cash flow projection is an important step in achieving profitability and demonstrates that your plans for growing your practice are realistic and achievable. Keep a monthly cash flow projection for 12 to 24 months, and an annual projection for five years, updating your projections regularly to ensure they are still on track. Use this formula to project your net cash flow: Cash Flow Projection
$
Estimated annual revenues:
+
Minus fixed expenses (rent, insurance):
-
Minus variable expenses (dental supplies, lab work)
-
Minus staff costs (salaries, benefits)
-
Minus cost of debt service
-
Equals Net Cash Flow
=
The resulting net cash flow figure may indicate a need to increase your annual revenues at some point in order to maintain current standards or meet future goals. Technology changes If you are a practice owner, your fiveyear plan needs to take into account the rapid changes currently taking place in dental technology. Digital practices with computerized patient files and instant information sharing are becoming more prevalent every year. In order to stay current with the competition and meet the expectations of today’s digitally immersed 14 Winter 2015 Dental Entrepreneur
consumers, include funding for periodic technology upgrades in your five- year plan. Don’t forget that technology can include software for social media capabilities and other means of effectively reaching out to your patients and prospects. Marketing plan Marketing should be a well-used muscle in your practice to help secure your current cash flow and attract new patients. An effective five-year plan includes marketing tactics that can readily be put into play to support your practice through a particular transition period.
Make sure you surround yourself with people you trust to help you meet the goals defined in your five-year plan.” For example, if you are planning to expand your practice and provide a wider array of services, you will want to start scheduling both current and new patients for these services in advance so you can start realizing a return on your investment as soon as possible. How will you reach out to these patients and prospects? Will you use patient letters and referrals, a direct mail campaign, a promotional discount? Your five-year plan provides a
Healthy credit profile Since you will likely need funding for any significant practice growth initiatives, a cornerstone of your five-year plan is maintaining a healthy credit profile to ensure you qualify for financing at the best possible rates.To help build a healthy credit profile: • Maintain at least two revolving credit accounts to show you are credit worthy. • To demonstrate you know how to manage credit wisely, do not use all the credit available to you. • Do not apply for credit with too many lenders within a short timeframe, as this can negatively impact your credit rating. • Always make on-time monthly payments to demonstrate you are reliable in paying back loans. With your five-year plan completed and kept up-to-date, you have succeeded in creating a long-term vision for your career and practice that incorporates steady, predictable growth. Even if you accomplish only a fraction of your documented milestones, you will certainly still achieve meaningful long-term success simply by keeping a picture of the future you hope to build in front of you. All practice financing is subject to credit approval.
Rhonda Meyer, Vice President, National Business Strategies forWells Fargo Practice Finance, is responsible for managing the go-to-market strategies for Practice Finance services, as well as several key association and vendor relationships. She can be reached at rhonda.meyer@ wellsfargo.com.
DentalEntrepreneur.com
SIRONAUSA.COM GLOBAL
NUMBER
IT ONLY TAKES
9
CROWNS A MONTH*
CAD/CAM FOR EVERYONE
TO GET INTO CEREC . ®
with the way you practice dentistry.
Now that’s truly CAD/CAM for Everyone.
Patterson Representative directly, or call 800.873.7683
*Data on file. Prices valid only in the U.S. Pricing is subject to change without notice and does not include sales tax and freight, where applicable.
Getting Started
Can You Really Profit By Design When Planning an Office? Garrett Ludwig
T
he direct answer is a resounding, “Yes!” We adopted the company slogan “Profit By Design” many years ago since it speaks to the intent as well as the effect of design. This simple formula has proven itself for our clients consistently over many years. So let me share a few of the elements that characterize this reliable prescription for success. INTENT Call it goal-setting, due-diligence or simply homework, there is no substitute for intent in the achievement of any aspiration. To wit, you have earned your credentials as a dentist through focus, commitment, sacrifice, study and hard work - in short, intent. If you make the same commitment to planning an office, you are guaranteed a similar success. Since the process of planning an office is not as well-scribed as an academic curriculum, the first step in the process is to find comfort in delegating responsibility and engaging professional guidance to lead you through the process. If you adhere to the simple precepts that follow, I assure you that you will discover factors that will save you money, others that will earn you money and those that will simply make your work-life stress-free. Collectively those elements will result in profitability. Here are a few examples: On the savings front, there are no less than 30 check-points that we use in the process of determining the feasibility and efficacy of a facility for use as a dental practice. Each has a potential cost and will impact your construction budget negatively or positively. It’s a matter of knowing what to look for and having the wherewithal to redirect those costs from the plus column to the minus column. Consider this typical example: A Lessor may offer a leased space as-is. That means that the cost of demolishing and removing all existing partitions, lighting, wiring, plumbing, ceilings, etc., would be assumed by the lessee – you. On a recent project, the demolition costs were estimated at $25,000 (that’s not a misprint). That constituted a 6.5 percent increase in the construction budget before the project began. We negotiated with the Lessor, and he agreed to provide the space clean.
16 Winter 2015 Dental Entrepreneur
Another common example is the need to provide a pitched walkway to accommodate handicapped access. By definition in the regulations, a slope (ratio of 1:20) will not necessitate railings. On the other hand, a ramp (ratio of 1:12) will require perimeter railings along with bi-level hand-rails. If you have the space to work with, the slope is obviously the most economical solution. The point is that, if you are vigilant about thoroughly evaluating the extensive list of potential line-items, you are likely to save as much as 30 percent in construction costs. Earnings and stress-management are products of the same duediligence. It stands to reason that if you work more efficiently you will create the potential for increased revenue. In kind, if you create an environment of homeostasis, you will enjoy the peace of mind, contentment and joy of performing dentistry unencumbered. You can’t put a price or a value on that. To put that in perspective, picture the ideal ergonomic treatment room. You reach for something, and it’s there. You ask your assistant for something, and it’s there. If you identically replicate this work environment in all treatment rooms, I will personally guarantee
DentalEntrepreneur.com
that the resulting increased efficiency and productivity will expand your bottom line. Most importantly, you and your staff will enjoy the synergy that results. Those are the rewards of intent. EFFECT So, where is the profitability in an effective design? Call it marketing, advertising, merchandising, or simply promotion, your professional image is established the moment anyone enters your office. You can’t buy that with any media. Therefore, the highly touted wow-factor is an essential effect that will certainly initialize a positive impression. But the reality is that the image must transcend the atmosphere created with architectural appointments and sensory details. The fact is that patients are savvy and that dynamic image must be maintained throughout their experience in your office. As a result we adopted the mantra and skill-set to “manage the fluid movement of people within a defined space.” It is grounded in the strategic juxtaposition and orientation of services, and is enhanced by the personnel who manage each of those services. It also isn’t exclusive to patients. The synergy of a well-planned environment will resonate with all who enter your office- including staff, colleagues, technicians, vendors and service providers. In closing, I would like to quote a man who knew a great deal about profiting Steve Jobs. He said, “Design is not just what it looks or feels like. Design is how it works.” That’s the essence of effect.
Garrett Ludwig is President of Diversified Design Technologies, Inc. and specializes in dental office design. His design expertise is best summarized by his company slogan, “Profit By Design”which speaks to the purpose and intent of creating functional, efficient and fiscally sound design concepts. Contact Garrett at 800-622-5563 or garrett@dentaldesign.pro.
Resource Guide ADCPA
Comfort Dental
www.ADCPA.com
www.comfortdental.com
The Academy of Dental CPAs (www.adcpa.org) is the nationally recognized, authoritative source for enlightened and proactive tax, consulting and accounting resources for dental professionals. Our mission is to add value by assisting our clients to improve profitability, business success and quality of life, and to continually improve the value that ADCPA members can deliver to their clients through sharing resources, intellectual capital and best-practices.The ADCPA is comprised of 24 firms, representing in excess of 8,000 Dental Practices throughout the nation.Please see our ad on page 7.
The Best of Both Worlds At Comfort Dental, we combine the old-style neighborhood dental practice with today’s modern group practice. Equity ownership, autonomy, management of your own business, and long- lasting relationships with your patients is combined with our economics of scale, prime locations, mass marketing, and overhead control. It truly is the best of both worlds. See our ad on page 17.
ADS Dental Transitions (888) ADS-4237 www.ADStransitions.com ADS is the nationwide leader in dental practice sales, associateships, buy-in/buy-outs, partnerships and appraisals. ADS is comprised of the industry’s most experienced professionals, including dentists, attorneys, and CPAs. We can help you with each step of your next transition. To view a complete list of practice opportunities available in your desired area, visit us at ADStransitions.com. Please see our ad on page 33.
ADS Dental Transitions South 770-664-1982 www.adssouth.com ADS South is the premier dental transition organization in the Southeast. We provide associateship placement, dental practice sales, appraisals, and expert testimony services. Our company was founded over 26 years ago by Earl M. Douglas, DDS, MBA, BVAL, and we continue to control the cutting edge of transition technology. Please see our ad on page 11.
Bank of America Practice Solutions 800.428.2847 www.bankofamerica.com/practicesolutions Dental practice financing designed to help you succeed. Bank of America Practice Solutions offers a full range of dental practice financing options from purchasing an existing practice or starting your own practice. We provide critical knowledge you need to establish and develop your business. See our ad on page 5. 18 Winter 2015 Dental Entrepreneur
Henry Schein Nationwide Dental Opportunities 866-409-3001 www.dentalopportunities.com Henry Schein Nationwide Dental Opportunities (HS NDO) offers Dental Associate recruitment and placement services that pair job opportunities listed by dental practitioners with qualified, pre-screened dental associate candidates. HS NDO matches dentists based on skillset, practice philosophy, and style to ensure a high success rate. We are specialists who work confidentially to help doctors fill critical roles within their office by defining the job, attracting qualified candidates, and managing the interview/placement process. Dentists can make a decision with confidence, knowing that we have helped them through the process. And candidates can rest easier knowing that there is never a fee charged to them. We work to make the match a win-win situation for both the hiring doctor and the Associate with our personalized placement service and years of success. See our ad on the back cover.
Henry Schein Professional Practice Transitions (PPT) 1-800-988-5674 www.henryscheinppt.com/ Henry Schein Professional Practice Transitions is the leader in dental practice brokerage (sales and buying), transition services, and practice valuation. Our executive team includes respected dental practitioners with top-tier academic credentials, who have consulted on thousands of transitions and other industry professionals who have handled hundreds of closings. In addition, our dental consultants, many either practicing dentists themselves or with many years of experience in dental consulting, work to bring every transaction we facilitate to a successful close with both a satisfied buyer and seller. We have a broad range of dental practice listings nationwide
DentalEntrepreneur.com
Business Beyond the Classroom and have closed sales in all 50 states, yet have the expertise and knowledge of your local area. Our responsive support gives you a clear advantage and we can help you to refine your plans and create new options as your practice goals change. We offer valuable webinars, seminars, and other resources to support dentists throughout their career, as well as many value-added services such as practice valuations. See our ad on the inside back cover.
IgniteDDS 716-912-7970 david.rice@ignitedds.com Building the bridge between dental school and tomorrow’s most successful, quality-conscious private practices Mission: Fueling Passions Beyond The Classroom for dental students, new dentists and new dental team members Description: igniteDDS empowers the next generation of dental professionals with the knowledge and resources you’ll need for tomorrow’s treatment and practice decisions!
Sirona Dental Systems, LLC 800-659-5977 http://www.cereconline.com CEREC AC from Sirona is the most advanced dental CAD/ CAM system available. With its Bluecam, capturing fast, precise digital impressions and then creating high quality esthetic restorations is a reality. CEREC AC delivers access to efficient, precise, scalable and affordable solutions, including CEREC Connect. Call 1-800-659-5977 or visit www.cereconline.com. Please see our ad on page 15.
The Artist Evolution LLC/Practice Image Builders Toll Free: 866-610-5334 www.theartistevolution.com The Artist Evolution is a full service, strategic marketing and design firm with a passion for helping practices around the country to communicate effectively with their target patients, to develop an identifiable brand, and to meet their objectives in a cost-effective way. Please see our ad on page 11.
MacPractice, Inc (402) 420-2430 MacPractice.com MacPractice DDS is the leading practice management and clinical application for dentists who prefer to use a Mac, featuring electronic insurance submission, Mac native digital radiography and photos, charting, Electronic Dental Records, Kiosk, Web Interface, iPhone Interface, speech dictation, and Mac stability and ease of use. Please see our ad on page 27.
Patterson Dental 800 873-7683 www.pattersondental.com
Wells Fargo Practice Finance 1-888-937-2321 wellsfargo.com/dentists practicefinance@wellsfargo.com Wells Fargo Practice Finance provides customized financing supported by experienced specialists and practical planning resources to help dentists acquire, start and expand their practices. The only practice lender selected especially for ADA® members and endorsed by ADA Business ResourcesSM, we understand the business of growing successful practices and are here to help you achieve your goals. Please see our ad on page 13.
Patterson Dental Supply Inc. is a full-service distributor of a complete range of dental products and services to dentists, dental laboratories, institutions and other healthcare providers throughout North America. As one of the nation’s largest dental distributors, Patterson Dental sells consumable dental supplies, digital and other dental equipment and practice management software. Please see our advertisement on the inside of the front cover and page 1, and page 23.
DentalEntrepreneur.com
Dental Entrepreneur Winter 2015 19
Business Fundamentals
The Critical Factors of the Business of Dentistry Cathy Jameson, PhD
The success of your practice will be in direct proportion with the success of your systems. – Cathy Jameson, PhD
“I
didn’t learn how to run a business or manage a team during dental school. I love doing dentistry, but all of the other things I have to do are stressful. I don’t know where to begin.” That’s not an unusual statement by dentists who are in the early years of practice. Actually, it’s not an unusual statement for a dentist at any phase of his/her practicing life! Of course, your main purpose and what interests you the most is taking care of patients— doing the dentistry. But, doing the kind of dentistry you want, in the way you want to do it, takes a great team working cohesively toward the goals of the practice. Goals need to be established for each of the systems. At Jameson, we believe that there are three things you must do to have a well-managed practice: 1. Set up the systems effectively. 2. Teach the people on your team how to administer those systems effectively and with consistency. 3. Monitor the systems to make sure that the goals you have set and the results you want are, indeed, being obtained. Mastery of clinical skills requires dedicated time, study and investment for continuous improvement. The same commitment must be given to the business aspect of your dental practice. The accomplishment of a successful practice requires dedicated time, study and investment, too. The art and science of management are not learned by osmosis. With intention and action, the investment you make to improve both clinical and management skills will be profitable. The Critical Factors Let’s look at the major critical factors, or systems, in your dental practice. (Note: These are not all of the critical factors, but 12 of the major ones.) The Major 12 Critical Factors of the Business of Dentistry are listed below: 1. Production 2. Collection 3. Accounts receivable 4. Patient financing programs
20 Winter 2015 Dental Entrepreneur
5. Overhead control/profitability 6. New patients: external and internal marketing 7. Case acceptance 8. Scheduling 9. Hygiene 11. Teamwork 12. Leadership 1. Production Determine your production goal carefully. Analyze (perhaps with the help of your accountant or consultant) the monthly costs of running your dental practice. Then add to that the dentist’s required and desired salary and compensation (obviously, this is for the dentist’s information only). Add a margin of profit that you wish to accumulate for an emergency fund, continuing education, or future purchases. This, then, is your production goal. This goal will go up every year or as your own costs of operation climb. Schedule toward these predetermined production goals on a daily, weekly, monthly and yearly basis. 2. Collection Establish a goal of collecting a minimum of 97 -98 percent of production. Pre-payments or collection of past due accounts may lead to a higher percentage. Pay as close attention to your collections as you do production. You can only pay bills with dollars in the bank. NOTE: If you are involved with managed care programs, your collection percentage will be lower. Add your collections to your adjustments to see if you are collecting all that you can collect. 3. Accounts receivable Accounts receivable are monies owed to you for dentistry already performed. You may or may not have made a financial agreement, but the balance of the account remains on your books. Consider moving out of the banking business. Instead of carrying accounts on your own books, which means that you are loaning money to your patients, consider getting involved with a patient
DentalEntrepreneur.com
financing program. Let financial experts manage the credit portion of your dental practice so that you can focus on patient care. 4. Patient financing programs Concern about cost is the main reason people do not come to the dentist or do not schedule treatment. Become involved with a patient financing program. And, if you are already involved with a program, consider using it more extensively. The service fees you pay for these programs is much less than the cost of carrying accounts on your own books or the loss of productivity when people cannot afford large sums at one time. 5. Overhead Overhead is the amount it costs to run your practice. There are three ways to increase profit margin and lower the percentage of overhead: • Increase production. • Decrease costs. • Increase fees. Any of these three entities will increase profit margin. By incorporating all three of these measures, your profit margin increases substantially. Expansion of the profit margin makes it possible to provide
DentalEntrepreneur.com
increases in salary and/or benefits to yourself and/or your team. A business must have a budget and a handle on Profit and Loss or overhead. You cannot determine and control your overhead without knowing the true numbers. Get professional help in this critical area of business management. Don’t guess! Be as interested in profit as you are in production. 6. New patients: external and internal marketing Marketing is (1) a part of developing a new practice,( 2) retaining the patients from an established practice and (3) maintaining a healthy practice throughout your career. Everything you do is related to marketing and marketing is a part of everything you do. Develop and implement a strategic marketing plan based on acceptable budget, desired goals and expected results. New patients: The number of new patients you need per month depends on many factors. For example: • What type of treatment are you providing? • If you are doing large aesthetic/cosmetic, implant, or reconstruction
cases, you will not need as many new patients as a general family dental practice. • What are your production goals? • How many dentists are in your practice? Determine what you believe would be the best new patient experience. Then, provide this each time a new person enters your dental practice. Commit to not just having people as one-time patients floating through your practice, but rather, focus on turning one-time patients into forever patients—who become referral sources. Existing patient family: The purpose of your internal marketing program is to help more patients say yes to treatment, stay actively involved in your hygiene program and refer others to you because of the excellent service and care they received. Track the amount of treatment diagnosed and presented, and how much is being accepted and scheduled. Develop a program of follow-up on any patient who leaves the dental practice without scheduling an appointment. Your marketing is two-fold: attracting new patients in the appropriate numbers and retaining patients over time.
Dental Entrepreneur Winter 2015 21
7. Case acceptance It makes no sense to attract new patients into the practice only to have patients declining treatment and/or not staying actively involved in your hygiene program. If you are losing as many patients each month as you are attracting, your dental practice will plateau or go downhill. Perform a comprehensive diagnosis and design a treatment plan for all patients. Enter all treatment plans into your computer. Then, carefully and regularly follow up on all patients who have incomplete treatment. You will be evaluating several things when you begin monitoring this critical factor of your dental practice. • Are patients accepting your recommendations? Or do you need to improve your case presentations? • How well are you following up on incomplete treatment? What is your conversion rate? The fulcrum of your dental practice is comprehensive diagnosis, complete treatment planning and excellent case presentations for each patient. 8. Scheduling With a great scheduling system, you can: (a) Reach production goals (b) Stay on time (c) Have plenty of time to perform excellent treatment (d) Be more profitable (e) Control stress You control your appointment book rather than have your appointment book control you. In evaluating the effectiveness of your scheduling system, ask the following questions. • How far out are we solidly booked into the future? • When can we schedule a new patient? • When can we schedule a long aesthetic or comprehensive restorative case? • When can we schedule a hygiene patient?
22 Winter 2015 Dental Entrepreneur
•
Can we see a periodontal patient quickly and regularly? • Do we run behind schedule? • Are we delegating responsibilities when and where possible according to the laws of our state or country? • Are we exhausted at the end of the day because we have seen so many patients? • Are our days smooth flowing as well as productive? • Do scheduling difficulties cause stress on a regular basis? • Do we have numerous broken appointments and no shows? Scheduling is a difficult and challenging system but one that can be mastered. 9. Hygiene The hygiene department is the lifeblood of your dental practice. For most practices, about 30-33 percent of the overall productivity of the practice will come from the hygiene department. Identify patients coming through hygiene who have the following: a. Dentistry diagnosed but incomplete. b. New areas of concern since the last appointment. c. Periodontal concerns that need to be addressed. d. Opportunities for advanced restorative treatment. e. Opportunities for aesthetic alteration. Here, in the hygiene area, much of your patient education will take place; not just education about how to brush and floss, but education about the five areas listed above. Approximately 40-60 percent of your restorative treatment and aesthetic treatment comes from hygiene patients. Within your hygiene department there are multiple systems that require monitoring: • What is the hygiene production daily, monthly, yearly? • What percentage of the overall production of the dental practice is coming from hygiene? • Hygiene retention: What percentage of your active patients are participating in your hygiene program? • What percentage of your hygiene production is non-surgical peri-
•
odontal therapy? How much restorative treatment is coming out of hygiene?
10. Team No critical factor, system, or protocol in your dental practice can work effectively if you don’t have a great team working together to accomplish the practice goals. Hire properly, educate continuously and “create a healthy work environment” © that fosters productive teamwork. Answer these questions: • Do you have the appropriate number of team members in the right positions so that patient care is stellar, production is not limited and stress is controlled? • Do you have current, well-defined, workable descriptions of position responsibilities? Do these descriptions focus on key responsibilities, expected results and accountabilities? • Do you have a current personnel policy manual? Has everyone read and agreed to this manual? • Are your team meetings and daily meetings productive and effective? • Do you have equitable salary, benefit, and incentive programs in place? Are these healthy for the dental practice as well as for team members? Jameson client, Dr. Charles Puntillo makes a poignant statement regarding the value of outstanding teamwork. “As I go home every evening, the most rewarding feeling that I have from my practice is the fact that all of our team members are going in exactly the same direction, saying the same message, working together as a unit,” he said. “When we bring new patients into our practice, or treat existing patients, they are absolutely amazed that the practice runs so smoothly. They appreciate the professional quality of all the team members. We do a lot of laughing, a lot of joking around. Our practice is fun. But our commitment to provide quality care extends to every encounter a patient has with any member of our team, and excel-
DentalEntrepreneur.com
lent dentistry is our benchmark. Our team is proud of that.” Make a choice to surround yourself with people who have a positive attitude and who are on the same path as you. This is the key to a harmonious and healthy work environment. Reflect on these questions and answer them honestly: • Is your team cohesive? • Is your team goal-oriented? • Is your team supportive of practice building and practice development? Or, are they comfortable with the status quo? • Does conflict among your team members cause stress for you or any other member of the team? • Is communication effective among team members?
Cathy Jameson, PhD, is the founder of Jameson Management, an international dental consulting firm focused on the CRITICAL FACTORS of dental practices. The marketing, hygiene and management systems taught by Jameson
“MY PHILOSOPHY IS TO TAKE CARE OF CHILDREN AND GET THEM TO A HEALTHY, STABLE DENTAL STATE. AND HOW YOU DO THAT SOMETIMES TAKES A LOT OF CREATIVITY.” DR. DARCY RINDELAUB Riverdale Pediatric Dentistry | Coon Rapids, Minnesota
11. Leadership What are you, individually, doing to lift the morale of your team and of your dental practice? What kind of energy are you bringing to each day? Are you being a leader of yourself, a leader of your team members, and a leader of your patients? You are a Critical Factor of the dental practice in your own right. Make a decision each and every day to be an asset to your dental practice. Bring your best self to the dental practice each day. Put out positive energy and positive energy will come back to you. Your life is a reflection of your thoughts and energy. Critical Factors While there are many systems in the dental practice, the 12 systems that have been identified here as the Critical Factors are foundational to the health of your practice. Do the following: (1) Establish goals in each area. (2) Monitor each system. (3) If you are not reaching goals, stop and adjust immediately. Remember to ask two questions. First, “What is going well?” Make sure you keep doing those things. Then ask yourself, “How can we do this better?” Be on a path of continuous improvement. That path leads to the road to success.
DentalEntrepreneur.com
Management lead to increased productivity, profitability and stress control. Dr. Jameson’s books, Success Strategies for the Aesthetic Dental Practice, Great Communication Equals Great Production, and Collect What You Produce are best sellers. To purchase her books or to schedule a complimentary phone call regarding your practice, visit www.JamesonManagement.com or email info@jamesonmanagement.com.
THE POWER TO CHANGE LIVES SEE HOW PATTERSON SUPPORTS DR. DARCY BY VISITING OFFTHECUSP.COM/CHANGINGLIVES.
Patterson supports dentistry’s ability to positively change lives. If you’re ready to lead your patients, staff and practice into a new era of dental care, contact your Patterson representative today!
PATIENT EXPERIENCE, PRACTICE LIFESTYLESM PATTERSONDENTAL.COM | 800.873.7683
P150943a (11/14)
Dental Entrepreneur Winter 2015 23
Business Fundamentals Top Five Ways for an Associate to Build a Practice Within a Practice and Succeed! Rhonda Mullins
M
ost dental school graduates today are burdened with substantial debt, so they begin practice as Associates. While some enter GPRs or the Armed Services until they complete their obligations, the outcome is the same — they enter private practice. As associates, they have the opportunity to improve their clinical skills, increase speed and proficiency, and learn about dental business management. There are five classification of a Group Practice from the ADA. www.ada.org
24 Winter 2015 Dental Entrepreneur
They are: 1.Goverment 2. Medicaid 3. Hybrid 4. DSO - Dental Support Organization 5. Dentists Owned and Operated Being an associate of any of these types of group models as an associate may be the beginning of the majority of new dentists today. However, there still are opportunities in many solo
DentalEntrepreneur.com
practices that can offer a more mentoring association, as well as an associate position to begin your career and ultimately become a stakeholder or the owner of the practice and have the seller continue to work for your associate if the patient base can support both providers. In addition, most associates hope the position they choose will lead to longterm associate position, a stakeholder position, or ownership of the solo practice model. Understanding the way of success as an associate is the best route to achieve the desired goals of all parties in all the practice models. This article examines the top five ways to accomplish success as an Associate Dentist 1) Realistic Expectations Possessing a realistic expectation of the contribution and capacity you have as a new dentist and associate is important. If you are entering into a solo practice model with the intention to purchase this practice immediately or within a designated time frame, make sure there is a predetermined purchase price. The top reason that the promised buy-in/buy-out does not occur after a one- to three-year time frame is that the parties did not agree on the purchase price before the associate was hired. Therefore, the two parties can be at odds with vastly different ideas of practice valuation and appropriate buy-in price. The purchase price needs to be determined and agreed upon prior to commencement of employment. If not, the senior doctor expects the practice will be valued at its current value, but the recent graduate expects to receive credit for the increased production and profit provided during his or her employment. Subsequently, the associate feels he is being asked to pay for his own sweat equity that increased the value of the practice. However, if the purchase price was established prior to commencement of employ-
26 Winter 2015 Dental Entrepreneur
Understanding the way of success as an associate is the best route to achieve the desired goals of all parties in all the practice models. ment, three out of four associateships lead to the intended equity position. Conversely, if the purchase price has not been predetermined, nine out of 10 associateships lead to termination without achieving the ownership intended or promised. 2) Contract Details Seek clarity in the written details. The second way to succeed as an associate is that the details of the buy-in have not been agreed to in writing prior to or immediately upon employment. A common but fatal mistake is to say, “If we like each other, we’ll work out the details later.” Do not procrastinate on the details of one of the most important transactions of your career. The more items discussed and agreed to in writing beforehand, the better the chance of a successful equity ownership occurring as planned. The written instruments consist of two specific documents: 1. Employment Agreement, which details the responsibilities of each party for employment. 2. Letter of Intent, which details the proposed equity acquisition. The letter of intent includes the proposed date of sale, the proposed sale price, what will happen in the event of irreconcilable differences and will there be an obligation to buy the remaining portion of the practice, what will happen if the practice owner also owns the
building (i.e., will it be a requirement or an option that the new doctor be allowed to purchase a position in the building), how will income be shared, how will patients be distributed, how would additional partners be handled, and a statement indicating that while the letter of intent is not binding on the parties, it does represent their agreement to the anticipated details of the proposed sale. 3) Budget and Written Marketing Strategies There is a four-pronged approach for all new dentists that become associates : 1. 1. Insurance: Becoming a provider of the top three insurance plans in your IP code area and having those fees negotiated by a professional insurance consultant to save you 10-15 percent of your normal 30-35 percent loss. Credentialing and negotiating insurance provider plans that you will participate with as a new dentist to any of the practice models. Clarify with your employer who will be doing this and the time frame in which it may take to get you on the insurance companies lists. It usually takes a total of 8-12 weeks for the process to be activated and integrated. 2. Global: Being Incorporated on all Internet, search engine, social media sites and customer relationship management software communication and all email, mobile and electronic processes that are associated with the practice. 3. Internal: Marketing campaigns: patient referral and incentivized marketing campaigns. 4. External: Direct mail marketing still works! Do it too! The more that you clarify this third way the faster you will succeed as a productive asset without compromising the current state of the practice’s profitability.
DentalEntrepreneur.com
4) Access to Patients For a successful experience in the shortest period of time as a new associate, cocreate a structure of what and how you will execute a multi-disciplinary patient care delivery model with your employer (types of procedures, emergency-on-call and new patients). The patient base comprises the goodwill value in every practice. Goodwill value typically constitutes 70-80 percent of the value of a practice. If the senior doctor fails to recognize the need to turn over existing patients to the associate, then the associate will be frustrated in his or her efforts to produce dentistry, earn a salary and improve skills. 5) Team Support The best method of introducing a new doctor to the practice is through the hygiene program. At the end of every hygiene appointment, the hygienist informs each patient: “Dr. Senior has requested that Dr. New see as many patients as possible to familiarize you with our new doctor.” The recall examination is an effective and non-threatening method of introduction. Upon entering the examination room, the new doctor repeats the same story: “Mrs. Smith, Dr. Senior has requested that I check as many of the hygiene patients as possible so that you are familiar with me and I with you. This way, in the event that I am the doctor on call and you should have an emergency, you will not hesitate to call me to obtain the needed relief. After all, we will already be familiar with each other.” This method of introduction has proven to be highly successful. If the new doctor has diagnosed needed dentistry, the scheduling staff member gives the patient a choice of an appointment with either doctor… with no bias. The choice of doctor is left entirely to the patient, not the doctors or staff. Historically, 50 percent of patients will choose an appointment with the next
DentalEntrepreneur.com
available doctor or the appointment time most convenient for the patient, regardless of who the doctor will be. For the other 50 percent of patients seen by Dr. New in the hygiene room, approximately 25 percent state that they really liked the new doctor and they’d like to be treated by Dr. New. The other 25 percent state that Dr. New was really nice but they want to see Dr. Senior for treatment. This choice is noted in their patient file, so the determination is already made as to which doctor the patient prefers during the introductory period. After a few months of seeing as many recall patients as possible, the new doctor’s schedule will begin to fill quickly. Eventually it will reach a point when the senior doctor notices that his or her schedule is slowing down. At that point, the doctors will begin to share recall exam responsibilities.
Rhonda Mullins brings years of expertise and the endorsement of satisfied clients and strategic accomplishments to her position as CEO and Managing Partner of Dentrepreneur Solutions, LLC., an Atlanta based design consulting firm for Dental Entrepreneurs. As an “Innovative Creative Consultant” in business enterprise and care driven clinical outcome, she delivers! Her contribution to Solo, Multi and Large Group practices nationally has been and continues to be a passion with GREAT persistence in impact and innovative solutions for this industry and it’s providers. She has cultivated a “Design Thinking” approach to close the gap between Research Evidence-Based Dentistry and Optimum Patient Care Delivery through a Care Driven® focus that allows any business model to succeed and be sustainable in the shifting landscape of this industry.
Please reach out to our authors and our advertisers. They care about you and keep us in print!
Dental Entrepreneur Winter 2015 27
Practice Builders Organized Dentistry Helps Young Dentists Navigate Careers Dave C. Lee, DMD When did the Thomas P. Hinman Dental Meeting originate and what is its mission? The first meeting was organized in Atlanta in 1911 by Dr. Thomas P. Hinman and was considered to be the first dental clinic “strictly for serious-minded educational purposes.” Dr. Hinman believed strongly in the individual’s contribution to dentistry and required attendees to return to their local dental societies and present what they had learned in a formal program. Hinman is founded on this tradition, but also focused on the future. The meeting has a 103-year legacy for quality, professionalism, devotion to detail, southern hospitality, and above all, a high regard for the value of continuing education. At the same time, Hinman is focused on the future with emphasis on technology and leadingedge educational programming that allow both the established and beginning dentist to deliver the best patient care possible. To help ensure that dental professionals attending Hinman meet their state CE requirements, the program meets the continuing education requirements set by the Academy of General Dentistry and State Boards of Dentistry. How did you first get involved with the Hinman? Dr. George Schuette was General Chairman of the Hinman Meeting in 1977 and my family dentist. Even while I was in dental school, he encouraged me to join the Hinman Dental Society. He told me the friendships I would form in Hinman would be some of my best relationships in dentistry, and I have found those words to be true. As a member of Hinman since 1983, I have served in many volunteer roles over the years and gained so much knowledge not only from each facet of running the meeting, but also from the many speakers, exhibitors, and of course, peers and mentors who’ve been involved and attended the meeting. Why is it important for young dentists to become involved in organized dentistry? We believe that dentistry has been, and will continue to be, a profession based on relationships. Many of today’s graduates finish school with record amounts of debt and educational loans, so thinking about relationships in the face of such financial pressures
28 Winter 2015 Dental Entrepreneur
can be overwhelming. If you are starting a practice or joining a practice, there are many questions and challenges ahead. Groups like the Hinman Dental Society can help young dentists navigate these challenges and provide a network of support for the lifetime of a career. Specifically, I see Hinman/organized dentistry helping young dentists the most with: • Continuing Education Dedicated to New Dentists: There are special programs like Hinman’s new day-long G.O.L.D. (Graduates of the Last Decade) Program designed to give young doctors critical practice and clinical guidance early in their careers. You’ll also find courses that are essential in helping young dentists establish a practice or evaluate opportunities, equipment and products. • Professional Networking: Dental organizations and groups also provide a network of professionals that you can rely upon. Throughout the year, I can rely on this network to share best practices, consult with me on a difficult or unusual case, or point me in the right direction on selecting a new piece of equipment or incorporating new technology into the practice. • Employment Opportunities: Dental organizations like Hinman are the best resource for those searching for a practice to join or professionals to hire to help grow your practice. And, you can feel confident that you can find someone to whom you can refer. I have found Hinman members and those involved in organized dentistry, to be the “cream of the crop,” and I find their integrity, desire to learn, skill level and willingness to share to be exceptional. Is the Technical Exhibit Hall a valuable destination for the emerging dentist and why? Most definitely. At the Hinman meeting you will find the latest technology, equipment, products and services all located in one place at one time! It would be impossible to learn about each and every new product or technology on your own. And students and new dentists can gain hands-on experience and knowledge in workshops and courses provided by dentistry’s leading authorities, as well as see them demonstrated by the industry’s foremost experts in the exhibit hall environment.
DentalEntrepreneur.com
DON’T MISS THIS UNIQUE OPPORTUNITY
GRADUATES OF THE LAST DECADE
Shorten your trip to success and practice ownership. Change your life by joining us for a day-long journey to your future. FRIDAY MARCH 27, 2015 PROGRAM AGENDA
G.O.L.D. PROGRAM | Course Fr500 | Earn 7 hours of CE Dentists who have graduated in the last ten years face extraordinary challenges. Economic pressures, student debt, the lure of corporate dentistry and increased competition make the path to a successful independent practice much more difficult. Change your life through this unique opportunity to guide Graduates of the Last Decade towards growth and future success by sponsoring
8:00-8:10am GENERAL CHAIRMAN 8:10-8:30am EMCEE 8:30-9:30am KEYNOTE SPEAKER
WELCOME TO G.O.L.D. Dr. Dave Lee LEADERSHIP FOR YOUR FUTURE Mr. Imtiaz Manji ENTREPRENEURSHIP & SUCCESS Mr. John Connolly Managing Director, Bain Capital Ventures WHY OWNING YOUR PRACTICE IS THE KEY TO YOUR FUTURE Mr. Charles Loretto
9:30–10:15am
them in the G.O.L.D. Program. • The lecture room will be set with tables for ten people. Serve as Table Host
BREAK
-
-
-
-
-
-
-
-
-
-
• Develop stronger relationships to improve communication and case success.
10:30–11:15am HOW TO OWN YOUR PRACTICE Mr. John McGill 11:15am–12pm DENTAL TEAM BUILDING Dr. Mark Hyman
• Encourage involvement in professional standards and organized dentistry.
LUNCH INCLUDED
for the dentists you sponsor and build relationships throughout the day. • Support doctor goals for practice ownership, growth and success.
In this unique program, the Hinman Dental Meeting provides a forum for
1–1:45pm
1:45–2:30pm
as an interdisciplinary partner for tomorrow’s leaders. Help support education in clinical dentistry, independent practice and improve interdisciplinary care.
BREAK
-
2:45–3:30pm PROGRAM FEES This opportunity is ideal for dentists who have graduated in the past 10 years, accompanied by a sponsoring dentist who serve as table host. Sponsors are
3:30–4:15pm
encouraged to purchase full tables or half tables to maximize their experience. 4:15–4:30pm
FULL TABLE . . . Sponsor + 9 Doctors
4:30–5:30pm
Sponsorship is $170 per dentist, and the number of attendees can be adjusted when registering. There is no minimum or maximum requirement. Table Hosts, and the Dentists they sponsor to Hinman, attend the course for no additional cost (after paying the registration fee.) Attendees not sponsored by another dentist can add this course for $150. Visit hinman.org/gold for more information.
PRE-REGISTRATION INFORMATION
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
FROM THE GENERAL DENTIST - RESTORATIVE SUCCESS THROUGH INTERDISCIPLINARY TREATMENT PLANNING Dr. Steve Ratcliff THE SECRETS TO THRIVING IN PRACTICE RIGHT OUT OF THE GATE Mr. Kirk Behrendt CLOSING REMARKS Mr. Imtiaz Manji BEER & WINE NETWORKING RECEPTION
G E N E R A L I N F O R M AT I O N
HALF TABLE . . . Sponsor + 4 Doctors
-
-
FROM THE SPECIALIST - INTERDISCIPLINARY TEAM APPROACH FOR QUALITY & SUCCESS Dr. Mollie Winston WHY PATIENTS SAY YES TO TEAM DENTISTRY Dr. Lee Ann Brady
leadership with young doctors. By hosting a full or half table, you’ll differentiate yourself among your colleagues as a trusted advisor for young dentists – and
-
-
7
What exciting programs do you have on the schedule this year that are geared directly to the new dentist? For 2015, we’re especially excited about a special day-long event on Friday, March 27, at Hinman called the G.O.L.D Program (Graduates of the Last Decade). This program is focused on giving young doctors important practice and clinical guidance to make their path to success clearer. Check out the schedule for the day at www.hinman.org/GOLDProgram.aspx. We have selected an incredible roster of the profession’s top clinical, interdisciplinary and practice leaders, as well as our keynote speaker, John Connolly, Managing Director at Bain Capital Ventures—all of whom will inspire young dentists and motivate them. Mr. Imtiaz Manji, CEO of Spear, will open the event and act as emcee throughout the day. It’s also unique because we are contacting the established dentists and specialists in the Hinman region to sponsor G.O.L.D dentists to the event. Seating will be at round tables of 10, so the attendees can interact through out the day and build relationships and mentorships. Lunch and a reception at the end of the day are included as part of the course. We think it will be one of the greatest values available at any dental meeting. Also, young dentists and dental students have asked us if we could provide an opportunity for them to meet potential employees/practice partners at the Hinman meeting, so we are offering a Career Connections by Hinman opportunity on Saturday afternoon. It will be a “Speed Date” format. Hinman will provide a small booth space and a time keeper/coordinator. Participants will be given 10-minute time intervals to meet and greet potential associates, and then move on to the next individual. Starting on Feb. 2, 2015, established dentists who might be looking for associates or practice partners will have the opportunity to register on the Hinman website at hinman.org/careerconnections.aspx and secure a booth space. Young dentists and students can then access 30 Winter 2015 Dental Entrepreneur
Check out the schedule for the day at www.hinman.org/ GOLDProgram.aspx the established practice information and set up appointments at the meeting. We think it can be a great time-saver and opportunity for all parties concerned, and once again follow the Hinman tradition of helping establish relations and mentorships in dentistry. We also host a pre-dental student forum with over 15 representatives in attendance to answer questions for potential dental students. We continue to have a dental student reception and a question and answer panel consisting of young dentists sharing their experiences in the early practice years just out of dental school. And we will again host a Women in Dentistry event to especially encourage networking and support for the young women in our profession. We love Hinman’s Southern Hospitality. Do you think that is another reason so many dental teams attend year after year? We would like to think so. Delivering Southern Hospitality was very important to Dr. Hinman, and we’ve continued to ensure that this is a big part of the Hinman experience. We want everyone to feel welcomed the minute they arrive at the meeting or join the Society. Each one of the more than 800 members of the Hinman Dental Society volunteers to work at least one full day at the meeting. They each take personal pride in making the meeting the best possible experience for our attendees/ guests. We believe it does set us apart and makes each and every attendee, as well as our speakers and exhibitors want to return the following year.
What has the Hinman meant to you, your family and your career? Hinman is an organization based on relationships and professionalism, and it has really been an extension of my family. Through my work in Hinman, I have met great dentists and people all across the America’s, and around the world. Our oldest daughter graduated from dental school at Medical College of Georgia/ Georgia Regents University, and through our Hinman connections she met her husband who happens to be a native of Nice, France, and a graduate of the dental school located there! So Hinman and the associated relationships have been wonderful to my family and my career.
Dr. Dave C. Lee has extensive training in cosmetic and restorative dentistry. His considerable training, skills, and unique eye for detail combine to create beautiful smiles for his patients. He takes a personalized approach to dental care, getting to know his patients and listening to their goals before creating treatment plans to achieve the results they envision. Dr. Lee is a Fellow of the Academy of General Dentistry, a member of the American Academy of Cosmetic Dentistry, a member of the Hinman Dental Society, and the American Dental Association. He received his undergraduate degree from the University of Georgia, and his dental degree from the Medical College of Georgia. A graduate of Baylor University’s Continuum of Contemporary Esthetic Diagnosis and Treatment and the Las Vegas Institute (LVI) for Advanced Dental Studies, Dr. Lee has accrued thousands of hours of postgraduate study, including participation in continuing education programs (on average, 60 to 80 hours’ worth each year).
DentalEntrepreneur.com
75% ] of U.S. doctors use an Apple device of some kind.
JUST WHAT THE DOCTOR ORDERED With 30,000 users worldwide, more and more dentists are running their practice on Apple computers and iPads and trusting MacPractice for their software.
an
i
]4
io n als u se
5
%
e.
fess
df
60%
on
r
pro
Pa
a hc ] o f h e alt e
or w ork.
] 94% of healthcare organizations adopt Apple devices when provider preference is the deciding factor.
us e a n iPh
ST. STEVEN’S MEMORIAL HOSPITAL
] Traditional PC shipments have declined 11%.
2012 2013
] Smart tablet shipments have increased 68%.
2012 2013
Call (855) 679-0033 - WATCH WEBINAR & DEMOS MacPractice.com/company/events Sources: A Manhattan Research study claims 75% of U.S. physicians own Apple products. Vitera Healthcare reported that 60% of healthcare professionals use an iPhone for work, and 45% use an iPad. A KLAS study found that 94% of healthcare organizations adopt Apple devices when user preference is a factor. Samsung was the second most frequently adopted technology in this study with just 26% of organizations having at least one device. Gartner detailed market forecast data - "Forecast: Devices by Operating System and User Type, Worldwide, 2010-2017, 2Q13 Update."
Practice Builders
What Staff Love/Hate About Their Jobs Bob Levoy
A
s future practice owners or associates, staff morale may seem more like a nicety than a necessity. However, staff members who dislike their jobs don’t perform as well as those who truly love their jobs and the people for whom they work. They’re not as interested in what they do or how well they do it. They tend to be more careless and they’re not as pleasant to patients. And that can take a heavy toll on patient satisfaction and a dentist’s reputation. One of my seminar surveys asks staff members in attendance to write on index cards what they like or dislike about the dentists for whom they work. No signatures are required to encourage forthright answers without concern for repercussions. I’ve compiled some of these replies, both favorable and unfavorable, in the hope these insights will help you as an employer or associate to achieve a happier, more productive workplace.
32 Winter 2015 Dental Entrepreneur
Favorable replies: “For the most part, my reasons for staying on this job are the quality of my relationship with the doctor and a situation where I am not taken advantage of, either on the basis of workload, salary or lack of respect.” “The doctor respects my judgment as a hygienist and frequently asks my opinion. It’s the highest form of praise – and very gratifying.” “I’m the caretaker for a seriously ill family member. The doctor has been wonderfully supportive in helping me juggle my schedule to meet my needs in this situation. He lets me know that family is the number one priority and does not make me feel guilty about the time off that I need. That relieves me of additional pressures. I make sure I give back in return.” “He makes us feel important and lets patients know we’re
DentalEntrepreneur.com
important. He never calls us ‘the girls’ and always uses our names.” “She has a great sense of humor which makes it pleasant for everyone – patients included.” “My first job was in a practice that focused on efficiency and financial performance. Employees were only a ‘means to an end.’ This practice is totally different – one that puts people first –.and manages from the heart. I love working here.” “Over the years there have been several patients who were rude, insulting and made inappropriate remarks to us (staff). When the doctor was told about these patients, he took then aside, told them if they ever repeated this behavior, they would be dismissed from the practice. And he meant it. Putting us first was greatly appreciated.” “I love the continuing education courses that we attend and the opportunity it gives us to network, learn new skills and make our work more interesting and satisfying.”
Unfavorable replies: “Moody one day, nice the next. You never know what to expect.” “Staff members who shouldn’t be here are allowed to stay.” “Plays favorites.” “I’m often asked to stay late which is a terrible imposition. To make matters worse, it’s not appreciated.” A new employee was hired with far less experience than I have and is being paid more than me – and I’ve been here four years. And who do you think they asked to train this new employee? Me!” “The doctor never says ‘Thank you’ for anything – ever!” “The young associate in our practice treats us like we’re his slaves. ‘Get this! Do that!’” “We’re been told there’s not going to be raises – and if you don’t like it, you can find work elsewhere. The office morale stinks.” High-performance dentists give con-
siderable thought to how their moods and actions affect the people with whom they interact most frequently and intensely. They constantly make adjustments to be more thoughtful and accommodating – especially in time of need. It results in staffs that are happier, more productive and loyal.
Bob Levoy is the author of seven books on practice management including 201 Secrets of a High Performance Dental Practice (Elsevier/Mosby) and 222 Secrets of Hiring, Managing and Retaining Great Employees in Healthcare Practices (Jones & Bartlett).
ADS HAS THE LOCAL MARKET EXPERTISE AND A HISTORY OF OVER 2.8 BILLION DOLLARS IN PRACTICE TRANSITIONS.
START YOUR PRACTICE SEARCH WITH A PROVEN PARTNER. CONTACT YOUR LOCAL ADS EXPERT TODAY TO BEGIN YOUR PRACTICE SEARCH
855.333.3443
SCAN THIS CODE TO SEE OUR CURRENT PRACTICE LISTINGS
Find ADS listings and more at adstransitions.com/buyer
DentalEntrepreneur.com
ADS companies are each independently owned and operated.
Dental Entrepreneur Winter 2015 33
Power to Succeed
Does Your Culture Create “Learned Helplessness”? Joel Small, DMD
I
n its most simplified form, an organizational culture is a mutually shared set of guidelines that dictate a group’s expectations of how individual group members relate to one another, their business entity and the customer/patient base. The concept of “organizational culture” may seem hard to grasp, as indicated by the fact that over 150 definitions of this term currently exist. Furthermore, principles such as commitment to shared values are often viewed as being soft or vague. In spite of this perception, a practice culture is potentially powerful and a significant determinant of the practice’s overall success. The transformation from a good dental practice to an exceptional one is more often than not driven by the strength of the underlying culture. As present and future leaders, we must appreciate the need to build and protect a culture that allows for growth and consistent improvement so that we may one day join the ranks of the exceptional practices. With this in mind, it is important to realize that our staff is an essential part of this process and our ability to make them relevant and empower them through collaboration is a key factor in creating the optimal practice culture. B. F. Skinner, a noted 20th-century behavioral psychologist, conducted an intriguing and provocative experiment using laboratory mice. Through an elaborately designed method of behavioral conditioning, he was able to condition one group of mice to believe that through their actions they were able to determine their fate. Using the same methodology, he also succeeded in conditioning another group of mice to believe that there was nothing they could do to alter their fate. He then placed the first group of mice, the ones that believed that their actions mattered, into a large tub filled with water. As anticipated, this group of mice, when placed in a life-threatening situation, acted instinctively and began to swim to the side of the large water-filled tub. Upon reaching the edge of the tub the mice were able to crawl out to safety. The second group of mice, the ones that believed that their 34 Winter 2015 Dental Entrepreneur
actions were meaningless, when placed in the tub of water simply sank to the bottom and drowned. Skinner was able to condition the mice by utilizing controlled environments. In one environment, the mice were allowed to produce positive stimuli (food) or avoid negative (electrical shock) stimuli through their actions. Conversely, everything that happened to the second group was beyond their control. Their environment was manipulated so that they could neither produce positive stimuli nor avoid negative stimuli through their actions. Appropriately, the lack of responsiveness displayed by the second group of mice was termed “learned helplessness.” You might ask, “What does this experiment have to do with my practice?” In reality, there is much that can be learned from this study. Like Dr. Skinner, we are the ones that create and/or alter the environment (also known as our culture) in which our organizations function. In fact, according to Warren Bennis, an icon of modern leadership thought, the primary function of leadership is to create an organizational culture. The culture that we choose to create will influence every aspect of our organization and will ultimately determine our practices success or failure. Value-based leaders understand that power, like organizational beliefs and purpose, is a shared experience. Cultures like these promote abundance and are characterized by collaborative decision making and a profound belief that everyone has influence. The power to alter the course of the organization does not reside with a few, but rather is shared by many. Research studies conducted by the University of Michigan have shown that organizations with a broader sphere of shared influence had significantly higher performance and productivity compared to organizations in which power was concentrated at the top. Believing that our actions and our choices matter is the essential first step to making things happen. What we have come to recognize as good old self confidence is, in reality, a learned competency,
DentalEntrepreneur.com
and today’s effective leaders must create organizational cultures that promote and teach self confidence to each individual team member. This is accomplished by empowering teams through collaborative decision-making and ensuring that each team member has been given the knowledge, skill, support, resources and appropriate authority to accomplish each task required to meet the shared goal. Leaders that promote a scarcity philosophy view power as a zero-sum game in which power is finite and is coveted and controlled by the few at the top. The resulting organizational culture is characterized by a command and control mentality which is non-collaborative . That places no value on individual contributions to the overall organizational direction. Leaders that create these command and control cultures, when compared to value-based leaders are often lacking in self confidence and are therefore psychologically incapable of sharing power. They also lack trust and utilize excessive control and/or micromanagement as a means of maintaining power. The end result is an organization whose individual members, like Skinner’s laboratory mice, come to believe that their actions are inconsequential and that they have no ability to alter their environment or control their future. Essentially they just shut down and quit trying. A very interesting dynamic develops when the above scenario plays out. Leaders lacking self confidence and the ability to trust believe that their staff is incapable of making meaningful contributions to the overall organization. The staff, being controlled and micromanaged, senses that they are not valued, and finding themselves unable to influence their environment, they simply shut down like Skinner’s mice. This further validates the leader’s initial thesis that the staff is insignificant, and so begins a destructive downward spiral driven by this self-fulfilling prophecy created in the mind of the leader. Ultimately, cultures like these tend to implode like a house of cards, because the weakened cultural infrastructure is incapable of holding up under even minor stress. The shared belief that our destiny is a matter of self control is the organizational equivalent of individual self confidence.
DentalEntrepreneur.com
Knowing that our individual actions will have some effect on our organization’s future will compel us to take action. The goal for effective leaders is to allow all of this to happen in a psychologically safe environment in which our staff need not fear repercussions for their well-intended actions even if the outcome of these actions is less than ideal. By creating psychologically safe cultures, we draw out our organizational creativity, which is often stifled by the psychological repression found in command and control cultures. Creative thinking is considered to be one our highest-level cognitive functions and has been found to be a distinguishing characteristic of exceptional organizations. The wise leader understands that their organization is best served through shared power, collaboration and utilization of their organization’s collective creativity.
Joel C. Small, DDS, MBA, FICD is an endodontist, speaker, writer, and entrepreneur. He is a cofounder of North Texas Endodontic Associates in Plano, Texas. His thirty six years as an endodontist have been spent in private clinical practice. Dr. Small completed his post graduate training in endodontics at the University of Texas Dental Branch in Houston, Texas. He received his Master of Business Administration degree, with an emphasis in health care management, form Texas Tech University in Lubbock, Texas. He is currently enrolled in the graduate Executive and Professional Coaching program at the University of Texas at Dallas. Dr. Small speaks nationally on the topics of leadership, practice management, and specialty practice transitions. Dr. Small is a co-owner of Phase Two Associates, LLC, a nationwide dental practice brokerage firm. Most recently, Dr. Small has written the newly released book, Face to Face, A Leadership Guide for Health Care Professionals and Entrepreneurs.
Please reach out to our authors and our advertisers. They care about you and keep us in print!
If you have any questions, comments, or responses to our magazine, please connect with us on Dental Entrepreneur Magazine — our official Facebook page! Read us online at dentalentrepreneur.com Send your questions or comments to anneduffyde@gmail.com dentalentrepreneur.com
Dental Entrepreneur Winter 2015 35
Dental Trade Shows
National Dental Student Lobby Day
Yankee Dental Meeting January 28 – February 1, 2015 Boston, MA
April 13-15, 2015 Washington, D.C. ASDAnet.org/LobbyDay
Chicago Mid-Winter Meeting February 26 -28, 2015 Chicago, IL
Dental Entrepreneur: Business Beyond the Classroom will be there to meet the leaders attending. Please look for us!
103rd Thomas P. Hinman Dental Meeting March 26 – 28, 2015 Atlanta, GA
ASDA Annual Session Feb. 18-21, 2015 Boston, Mass.
California Dental Association – Spring Session May 12 – 14, 2015 Anaheim, CA
ASDA’s Annual Session brings together students from all 65 U.S. dental schools. Highlights include the business meeting of the House of Delegates (where association policy is voted on); elections of ASDA national leaders; the Dental Expo; prominent speakers within dentistry addressing hot topics; and awards recognizing the achievements of ASDA chapters and members. The meeting concludes with a celebratory gala. Register at ASDAnet.org/AnnualSession.
Index of Advertisers ADCPA.......................................................................................................................................... 7 ADS Dental Transitions South……………………………………………………………........................... 11 ADS Dental Transitions…………………………………………………………….................................... 33 Bank of America……………………………………………………………............................................... 5 Comfort Dental............................................................................................................................ 17 Heartland ................................................................................................................................... 25 Henry Schein PPT ........................................................................................................... Inside back Henry Schein Nationwide ..................................................................................................Back cover MacPractice................................................................................................................................ 31 Patterson Dental...............................................................................23, Inside front cover and page 1 Practice Image Builders................................................................................................................ 11 Sirona........................................................................................................................................ 15 Wells Fargo................................................................................................................................. 13
36 Winter 2015 Dental Entrepreneur
DentalEntrepreneur.com
15YS3356
This represents only a sample of our practice listings. For a complete listing, visit www.henryscheinppt.com
When it’s time to buy, sell, or merge your practice, you need a partner on your side! • Practice Sales • Appraisals • Transition Planning • Mergers • Partnerships
1.800.730.8883 www.henryscheinppt.com
ALABAMA Hoover- 6 Ops, Digital X-Ray, Intra-Oral Cameras, Pano X-Ray, Dentrix, Staff & Office Manager Will Stay, GR $1M+ #AL111 ARIZONA Scottsdale-Dentrix, Dexis, New Phones & Computers, Good Cash Flow, Growth Opportunity, GR $537K #AZ102 CALIFORNIA 13 Miles West of Walnut Creek-PRICE REDUCED! 7 Ops, 2329 SF, Dr Retiring, Bldg to Sell w/Practice, GR $854K #CA108 COLORADO Denver-5 Ops, Great Start-Up, Location; Growth Opportunity #CA100 CONNECTICUT Manchester- 4 Ops, 2560 SF, Digital X-Ray, Dentrix, Newly Built, Located in Busy Shopping Plaza #CT107 DELAWARE Kent County- 4 Ops, 2000 SF, Eaglesoft, CERAC 1750 Patients GR $750K #DE100 FLORIDA Brandon-6 Ops, Beautiful Reception Area, Lots of Space, GR $624K #FL505 GEORGIA Atlanta Suburb- 6 Ops 2 Add’l Plumbed, 2,998 SF, SoftDent, Pano, Fiberoptics, Great Visibility, Ready for Immediate Sale #GA106 HAWAII Maui-4 Ops, 1198 SF, 4 Days Hygiene, Pano, Laser, Digital X-Ray, I/O Camera, GR $572K #20101 IDAHO Blaine County-General Practice, Fee for Service, Great Location, GR $742K #ID103 ILLINOIS Berwyn/Cicero-5 Ops, $660K Gross w/Growth Potential #IL503 INDIANA Hamilton County-4 Ops, High Visibility, GR $455K #IN104 KANSAS Wichita- Periodontal, Strong Referral Base, Opportunity for Growth #KS100 KENTUCKY Beattyville-General Practice, 5 Ops, 1000 Active Patients, Equipped for Ortho, GR $415K #KY102 MAINE York County-2 Ops w/Room for One More, 1800 SF, Bldg must Sell w/Practice, GR $600K+ #ME100 MARYLAND Carroll County- 4 Ops, 1000 SF, Great Starter, GR $470K #MD113 MASSACHUSETTS Barnstable- 4 Ops, GP, Intra-Oral Cameras, Imaging, Laser Unit, Digital X-Ray, Pano, EagleSoft, GR $1.3M+ #MA122 MICHIGAN Between Kalamazoo/Grand Rapids- Growth Opportunity, GR $250K on One day/Week #MI129 MINNESOTA North Twin Cities- Downtown Main Street, GR $239K #MN103 MISSISSIPPI Mississippi Delta-8 Ops, Main Community Practice, Successful Family Practice #MS100 MISSOURI Southwest Missouri-General Practice, 2 Ops, Located in County Seat of 8000+ Residents #MO100 NEW HAMPSHIRE Gilford-Nice GP & Condo in Lakes Region, Small Emphasis on Perio and Implant Surgery, GR $512K #NH100 NEW JERSEY Hudson County-Well Established, Affluent, Urban & Growing, 1100 SF, GR $180K #NJ113 NEW YORK Brooklyn-6 Ops, 5 Equipped, 3 Blocks from Subway, Free Parking GR $340K #NY110 NORTH CAROLINA 1 Hour from Raleigh-Small Town, Busy Practice, Stand Alone Building in High Traffic Area #NC502 NORTH DAKOTA S Central-Wonderful Productive Rural Practice, GR $696K #43102 OHIO Anderson Township Cinncinati- 5 Ops, 1500 SF, Medical Condo, 2200 Patients, PPO, GR $450k #OH118 OKLAHOMA Oklahoma City-Emphasis on Prosthodontics, Solid Practice w/Potential, Great Location, GR $600K #OK102 PENNSYLVANIA Cambria County-10 Ops, Well-Established, 21 Years in Community, Pan, Dentrix, GR $1.5M #PA502 RHODE ISLAND Scituate-3 Ops w/4th Available, PPO & FFS Patients, Pan, Dentrix, Dexis, GR $454K #RI500 SOUTH CAROLINA Upstate-Oral & Maxillofacial Surgery, 8 Ops, 3400 SF, iCAT, R/E Available, 2012 Net Receipts $750K #SC101 TENNESSEE Chattanooga-3 Ops, Good Opportunity for Young Dentist or As Merger for Nearby Practice, Bldg Available, Dr Retiring #TN111 TEXAS Bell County-Oral & Maxillofacial Surgery, 4 Ops, Leased Space, Successful, GR $1.3M #TX107 VERMONT Caledonia County- 5 Ops, Dexis, EagleSoft, CEREC, Pano, Intra-Oral Cameras, Free Parking, GR $1M+ #VT103 VIRGINIA Downtown Richmond- 1300 SF, Bldg Also for Sale, GR $157K #VA116 WASHINGTON South Snohomish County-6 Ops, 1700 Active Patients, Strong Hygiene, GR $1.2M #WA500 WISCONSIN Madison Area Practice Wanted-Buyer Interested in Acquiring a Satellite Practice w/Owner Willing to Stay as Associate #WI500
© 2015 Henry Schein, Inc. No copying without permission. Not responsible for typographical errors.
15YS3356
This represents only a sample of our Associate opportunities. For a complete listing, visit www.dentalopportunities.com
Solutions for your Dental Associate recruitment and placement needs! • Placement in private practice, clinics, and dental organizations • Associate candidates and employers • Proactive and results-driven • Personal attention • Experienced professionals
1.866.409.3001 www.dentalopportunities.com
© 2015 Henry Schein, Inc. No copying without permission. Not responsible for typographical errors.
City State Albany .............................................................NY Big Island .........................................................HI Canton .............................................................OH Chattanooga.....................................................TN Chicago............................................................. IL Cincinnati ........................................................OH Columbia ......................................................... SC Coos County .................................................... NH Corpus Christi .................................................. TX Dayton Metro ..................................................OH Detroit ............................................................. MI Dover...............................................................DE Eau Claire .......................................................WI Fargo...............................................................ND Fayetteville......................................................NC Hampton ..........................................................VA Hart County .....................................................GA Hartford .......................................................... CT Indianapolis ......................................................IN Jefferson County ..............................................NY Josephine County ............................................. OR Lansing ............................................................ MI Las Vegas ........................................................NV Long Island ......................................................NY Manatee County ............................................... FL Manhattan .......................................................NY McKinley County .............................................NM New London County ......................................... CT Omaha .............................................................NE Plano ............................................................... TX Portsmouth ......................................................VA Providence........................................................RI Roanoke ..........................................................VA Salem .............................................................. OR Scottsdale ........................................................ AZ Spotsylvania County .........................................VA Springfield ...................................................... MA Springfield ...................................................... MO St. Cloud ........................................................MN St. Louis Metro ................................................ IL St. Louis ......................................................... MO State College ...................................................PA Stockton .......................................................... CA Syracuse ..........................................................NY Tampa ............................................................. FL Tulsa ............................................................... OK Twin Falls ........................................................ID Windham County .............................................. VT Wood County ..................................................WV York County .....................................................PA