Dental Entrepreneur - Fall 2010 Issue

entrepreneur

Getting Your Practice off on the Right Path What Constitutes Value When Buying a Dental Practice?

It’s a Great Profession, So Make the Most of It!

class of 2011 | fall issue

dental

Business Beyond the Classroom

PArtnerShiP. integrity.

INNOVATION.

At Patterson Dental, we are proud to connect you with innovative tools and resources so that you can focus on providing expert dental care.

Patterson Dental is the company you can call on for everything from operatory equipment, digital X-ray products, dental practice financing and innovative CAD/CAM impressioning solutions as well as the service and support to seamlessly integrate these technologies into your practice.

As the dental industry has evolved and practice needs have expanded, we’ve grown to meet your needs, with 88 branch offices nationwide and more than 1,500 sales representatives and equipment specialists in the U.S. and Canada.

Let us be your partner in providing everything you need to excel at dentistry.

Contact your Patterson representative, local branch or call 1-800-873-7683

dental

entrepreneur Fall 2010 Volume 13, Issue 1 Editor & Publisher Anne M. Duffy RDH Assistant Editor Michael Duffy Brad Beauchamp Production/Accounting Kitty Beauchamp Director of Advertising Linda Hart Editorial Board Dr. Gene Heller Scott Mahnken Allen Schiff, CPA Dr. Tom Snyder Dr. Harold B. Sturner Dr. Joe Rubino Layout and Design John O’Connor

Class of 2011 Contributors Dr. Chris Bowman Dr. Rosemarie Cruz Leslie Franklin Dr. Gene Heller Cathy Jameson, CEO Dr. John H. Jameson Wes Jankowski

Brad Kucharo Gretchen Lovelace Preston Lovelace, JD Scott Mahnken Dr. Jane Puskas Nancy Stuhulak

Charter Sponsors Oral‑B Laboratories Ultradent Products Inc. Proctor & 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 ADuff2@aol.com Send materials to: Dental Entrepreneur 7422 Carmel Executive Park #107 Charlotte, NC 28226 704/846-7089 Fax 704/846-7304 Linkbeau@aol.com When you have finished enjoying this magazine pass it along to a friend and PLEASE RECYCLE Copyright 2010 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 Fall 2010 Dental Entrepreneur

class of 2011 fall issue

Welcome to Dental Entrepreneur

I

’m not going to tell you when I went to college, but

since then, I can honestly say that I’ve never stopped learning.

Technology has been the biggest shift of all in our field. It seems like every year, some innovation realigns how we think of certain procedures. Suddenly, what once took five steps now takes three. This equates to more patients on the schedule and bigger numbers at the end of the day every day.

Dr. Jane Puskas has it right; continuing education has made such a large, positive impact on my career, it’s difficult to even quantify. I’ve adapted my techniques continually over the years based on what I’ve learned at seminars. And I’ve also incorporated various breakthroughs in pain-related medications and technologies into the practice; in fact, the majority of the tools at our disposal are less than ten years old.

Of course, the largest impact continuing education has made on my career is the connections I’ve made with other professionals in the industry, and the business team we’ve built as a unit from the ground up. It’s the place where I reach out to the most experts, and come home with the largest number of new ideas. Whether it’s for advice, possible ownership opportunities, or for employment, we’re lucky to have so many generous, knowledgeable people in our profession who are willing to share.

We reached out to many experts for the fall edition of Dental Entrepreneur. We asked questions such as, “What is the fastest way to a successful practice? What are the most common pitfalls? What can a dental student do now to ensure the highest level of success in their future?” The good news is the answers have arrived. Dr. Gene Heller shares an invaluable perspective on how to purchase an existing practice. Dr. Chris Bowman describes the foundation needed for any successful dental enterprise. Leslie Franklin reminds us to protect the biggest money-maker of all in your practice, while Dr. Rosie-Marie Cruz shares her experience as a dentist with the Army Reserves. Wes Jankowski emphasizes the key challenges and goals that come with being a leader, and Preston and Gretchen Lovelace bring a unique insight to the finer points of running a practice.

Right now, I realize graduation seems very far away, and you must stay focused on your requirements and prepare for your boards. However, go ahead and visualize a great party for your graduation. Invite all your friends and family, play music too loud, and celebrate this monumental achievement.

After that, it’ll be back to the classroom.

Sincerely,

Anne M. Duffy Publisher

www.dentalentrepreneur.com

class of 2011 Fall issue Volume i

dental

entrepreneur’s

Contents Prologue

4 Your Success in Dentistry Rests on a “3-Legged Stool” Dr. Chris Bowman

Getting Started 6 Buy a Practice or Start from Scratch: What’s the Fastest Way to the Top for New Doctors?

Brad Kucharo

10 Beyond the walls of private practice: Opportunities at any career stage in the Army Reserve Dr. Rosiemarie Cruz

12 Smart Starts ~ Getting your Practice off on the Right Path John H. Jameson, DDS and Cathy Jameson

Business Beyond the Classroom

28 Navigating the Dental Malpractice Maze Nancy Stahulak

Practice Builders 30 Your Best Shot at a First Impression: Creating Long Term Patient Relationships Scott Manhken

32 It’s a Great Profession, So Make the Most of It! Dr. Jane Puskas

The Power To Succeed 34 The Key to a Great Practice? A Great Leader!

Wes Jankowski

Business Fundamentals 15 What Constitutes Value When Buying a Dental Practice?

Dr. Gene Heller

20 Business Administration for the Aspiring Practice Owner Preston Lovelace and Gretchen Lovelace

24 Protect Your Most Valuable Asset: YOU Leslie Franklin www.dentalentrepreneur.com

Dental Entrepreneur Fall 2010 3

Prologue Dr. Chris Bowman

Your Success In Dentistry Rests On A “3-Legged Stool” [Author’s Note: I intentionally wrote this article to an intended audience of “newer” dentists who are embarking on the journey of life in private dental practice as a key decision maker in the business. If you’re not planning on buying a practice or opening a new practice right away, then please SAVE this article after reading and dig it back up when you need it…because you will!]

I

f you’re beginning to transition from the world of “dental academia” into the world of “real,” I’m sure you are aware that there is so much more to learn. Here I’m going to share a unique concept with you that many dentists (unfortunately) never learn. Please don’t be fooled by the simplicity of this concept.

Its value is immense, and its application could hake a huge difference in the success of your dental practice.

We can all learn quite a bit from studying a little wooden stool. How, you say… and what does this have to do with being a successful dentist?

Well, stick with me Dr. Chris Bowman and soon it’ll be crystal clear.

Imagine for a minute that you’re sitting on a wooden, 3-legged stool. How comfortable do you think it would be if one or more of the supporting legs were a different length, or even if one leg were missing altogether? Not very…in fact, you may find yourself falling over onto the floor!

Not a good proposition, huh?

The formula for success in any business – including dentistry – can be broken down into three primary components. Each component should be thought of as a “supporting leg” of a 3-legged stool. If the legs are of equal length, then the business they support is “in balance,” and on track for success.

Further, the “length” of the legs determines the “height,” or level, at which the business

4 Fall 2010 Dental Entrepreneur

operates. But when one or more of the legs is shorter than the others – or worse yet completely absent – you have an unstable business and a recipe for disaster.

Unfortunaely, many dental practices are operating like a “crooked stool.” Simply put, the 3 “legs” that support the practice are frequently uneven lengths, creating a practice that is out of balance. The same analogy can be applied to a segment of a business. Let’s examine these supporting components, as applied to a private dental practice, and cover the necessary steps to grow each leg to their maximum and equal lengths. The result, a balanced and successful practice!

sources for advanced training in all phases of dentistry exist today. This includes several “hands on” courses – many including live patient treatment – that in my opinion are the “ultimate” environments for learning. Do your due diligence and seek the training that feels most appropriate for you and your entire dental team. As you move through each successive level of courses, you will certainly uncover more things to learn! Yes, the investment is significant…and continual. However, the confidence that this training instills in you and your team is “priceless,” and will reward you and your practice many times over!

Leg #1: Your Clinical Skill and Expertise Without question, the quality of your “product” – or the skill level with which you deliver your services – is a critical and necessary element for success. We all know that good clinical skills and continuing education are a MUST for advancing throughout your career. In dentistry, this is most essential.

Patients seeking dental services are becoming better educated and more demanding…and they should be. After all, they’re investing their discretionary income in you to help make them get healthier, look and feel better, and maybe even feel younger! Dentistry brings with it unique challenges that test your skills. It is of the utmost importance that you continually develop the advanced skills needed to deliver top quality dental services.

Numerous excellent post-graduate

Leg #2: Your Practice’s Business Systems NEWS FLASH: In the “real world” of private practice dentistry, patients can actually say “No” to your treatment recommendations! And many do…more than most dentists would want to admit… for a variety of reasons. Without question, current economic forces make “treatment acceptance” more challenging than ever for a great number of patients. That said, often the failure to get a “Yes” boils down to breakdowns in the practice’s business systems and protocols.

How easy will it be for new patients to enter your practice? How are they treated when they first arrive? What about your existing patients? Are there inefficient systems in your practice that pose as “roadblocks” that keep patients from getting the esthetic services that you’d like to provide for them? These are BIG issues www.dentalentrepreneur.com

that need to be handled properly if you want to build your practice.

From their first phone call to your practice through each and every visit, your new and existing patients must be made to feel as if they’re being “carried through your practice on a floating red carpet!” This principle applies especially to more affluent patients, who typically expect higher levels of service. And great service comes from great systems.

The doctor and the team must be on the same page in terms of how every system in the practice operates. New patient phone calls need to be handled with the utmost care. Each caller should be addressed by name, and openly and frequently invited to visit the practice at the earliest available moment. Barriers to entry need to be lowered or eliminated, such as unnecessary “screening” or “rules.”

Similarly, insurance and financial issues MUST be made as2/25/09 simple as 1:42 possible ADS.south209 PM forPage

patients to understand and adhere to. The more complicated any system becomes in the eyes of the patients, the less likely they will move forward with treatment, and these arenas are no exception. Do you want to boost business in your practice?

Then make sure MULTIPLE financial options are available, for example, as it often becomes necessary to “get creative” when helping patients to come up with the total investment for the services they want.

Leg #3: Your Marketing…YES, Marketing!

C’mon now…is marketing just as important as the other two “legs” above?

You bet it is!

Consider for a moment how valuable your services would be, and how significant your systems would be, if no one knew what you could do for them. Not very!

You see, if your patients don’t know about ALL the wonderful things you can 1

do for them, they won’t inquire. And they’re not going to “just know” about your services unless you and your team actively EDUCATE them. By “educate,” I certainly don’t mean teaching them how you can make their teeth straighter, whiter, etc. I mean simply showing your patients that these things are possible, and that they can have it NOW if they so desire.

Whether you market your dental practice internally or externally, or both (my recommendation), it is vitally important to understand that our patients do NOT necessarily want cleanings, fillings, porcelain veneers, or Invisalign aligners.

What they really want is to be healthy, comfortable, and beautiful! They want to know they’re going to keep their teeth and live a long time. They want people to tell them how great they look. They don’t See “Success” on page 35

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 www.dentalentrepreneur.com

Dental Entrepreneur Fall 2010 5

Getting Started Brad Kucharo, CPA, CFP®

Buy a Practice or Start from Scratch: What’s the Fastest Way to the Top for New Doctors?

A

s dental students approach graduation, there’s always one burning question: should I start my own practice, purchase a practice, or work as an associate? Most doctors agree that owning a practice is preferred over working as an associate since the earning potential is much greater.

However, whether to start a practice from scratch or purchase an existing practice is a

much more difficult Brad Kucharo

decision. Below we discuss the various factors new doctors should consider when determining if a doctor should start a practice from scratch or purchase an existing practice.

Most doctors that are fresh out of dental school have two things on their mind: find a job and start repaying student loans. The average amount of student debt for a new graduate is between $250,000 and $300,000. If the debt is amortized over thirty years at an interest rate of 6%, a $275,000 note would be $1,648.76 per month, or $19,785 per year. This 6 Fall 2010 Dental Entrepreneur

is more than most doctors’ mortgage payments! As a result, doctors think they need to earn money, and earn it fast, in order to repay their debt. The thought of taking on more debt to start or purchase a practice usually does not appeal

to new graduates. However, in almost all cases, it pays to borrow money to own a practice rather than work as an associate since the long term economic benefits are so much larger.

Starting a practice from scratch sounds beneficial since the doctor can select the new equipment of his choice, is able to hire the staff they want, select a facility of their choice in the location they desire, and have 100% say in every practice decision. However, the task of starting a practice is very difficult, especially in today’s economic environment, since new patients are so difficult to come by.

Despite the recent economic downturn, some banks are still willing to lend to dentists looking to start practices from scratch.

Typically, most banks will loan no more than $400,000 for equipment/office build-out costs and $50,000 in working capital. Additionally, most banks require doctors to have another job before they are allowed to start building a practice. This gives the bank peace of mind knowing the doctor has a stable income stream from another source. Building a pracwww.dentalentrepreneur.com

tice, working a second job, potentially playing the role of husband/wife and mom/dad does not leave much time for leisure, and the stress can build up fast.

Banks are even more willing to loan money for the purchase of a practice. The bank has historical data on the seller’s practice, which can help predict how the practice will perform in the future. As a result, doctor applications for a loan to purchase an existing practice are normally approved with ease. Banks do not require the purchasing doctor to have a second job and doctors will not spend as much time working on new patient flow since there will already be a large number of patients in the practice. Most leading institutions do require you to have worked for at least 24 months and require that borrowers have healthy credit scores.

However, the decision on whether to buy or build a practice should not be made based on the ease of obtaining financing. It should be based on which choice will provide the greatest economic benefit to the doctor over the course of his career. For over 30 years, our group has worked with many doctors that have purchased practices, along with many doctors that have started practices. As a result, we have a wealth of information based on our experience and have been able to capture averages and norms from these two different strategies. Below we will discuss and compare the economic impact of each scenario.

For a start up practice, let’s assume that the doctor borrows $400,000 at an interest rate of 7.5% amortized over fifteen years to purchase equipment and build out their space. Additionally, assume they borrow $50,000 at an interest rate of 7.5% amortized over ten years to use for working capital. The payments on the start up loan will be $3,708.05 per month, or $44,497 per year and the payments on the working capital note will be $593.51 per month, or $7,122 per year (combined the notes will cost $51,619 per year).

Assume the practice collects www.dentalentrepreneur.com

However, the decision on whether to buy or build a practice should not be made based on the ease of obtaining financing. $250,000 in the first year, and collections will grow 50% in the second year, 40% in the third year, 20% in the fourth year, 10% in the fifth year, 5% in the sixth and seventh years, and 3% over the next three years. Additionally, assume that the practice’s overhead is 75% in the first year (this is due to most of the costs being fixed (rent, salaries and wages) rather than variable (dental supplies), 70% in the second year, 65% in the third year, and 60% over t h e

next seven years. Given those figures and reducing the operating cash flow by the amount of debt service payments and the amount the doctor will have to pay in federal income taxes, the doctors cumulative after-tax cash flow over the course of the first ten years is $1,401,763 ($10,881 in year 1, $60,114 in year 2, $108,399 in year 3, $153,277 in year 4, $170,085 in year 5, $179,064 in year 6, $188,475 in year 7, $172,204 in year 8, $177,138 in year 9, and $182,177 in year 10). Even though the practice’s operating income increases each year, the after-tax cash flow is reduced in year eight as large depreciation deductions end, resulting in a much higher income tax liability.

Now let’s assume the doctor has an option to purchase a practice for $450,000 which will be financed over seven years at an interest rate of 7.5% yielding payments of $6,902.22 per month, or $82,827 per year. Assume practice collections are $625,000 in the first year and will grow 3% per year over the next nine years. Furthermore,

Dental Entrepreneur Fall 2010 7

assume that the doctor has an overhead rate of 58%. Given those figures and reducing the operating cash flow by the amount of debt service payments and the amount the doctor will have to pay in federal income taxes, the doctor’s cumulative after-tax cash flow over the course of the first ten years is $1,839,198 ($114,542 in year 1, $117,612 in year 2, $121,799 in year 3, $125,626 in year 4, $129,237 in year 5, $144,596 in year 6, $148,269 in year 7, $234,847 in year 8, $341,886 in year 9, and $360,784 in year 10). As you can see, the after-tax cash flow increases considerably in year eight since the acquisition debt is retired.

The two examples above are very realistic for new doctors. As illustrated above, the after-tax cash flow of purchasing a practice is $437,435 higher over the first ten years of practicing. To break it down further, the after-tax cash flow of purchasing a practice will be higher in the initial three years, then the start-up practice will have higher after-tax cash flow in years four through seven, and the acquisition of the practice will have higher after-tax cash flow in years seven through ten since the

As you can see, there are many factors to consider in determining whether to purchase a practice or start one from scratch.

Making one mistake in this decision could end up costing a doctor tens of thousands of dollars over the first few years of practice. debt service has been paid off. As a result, more and more doctors are now choosing to purchase a practice rather than build one from scratch.

The decision normally involves other factors besides cash flow. A buyer of a practice can potentially have the seller work in the practice for a short period of

Business Beyond the Classroom ADA Insurance Plans 888-463-4545 www.insurance.ada.org

Resource Guide

For loan collateral, debt protection, and peace of mind, dentists look to the American Dental Association for best-in-class life and disability insurance, including free life insurance and discounted disability insurance for dental students. ADA members buy direct and pay no commissions, which keeps rates low and hard to beat.

You get professional guidance without any pressure or conflict of interest. Great-West Life & Annuity Insurance Company has underwritten and administered the ADA Insurance Plans since 1934.

Please see our ad on the back cover, then compare for yourself!

ADCPA (503) 485-9252 www.ADCPA.org

The Academy of Dental CPA’s (ADCPA) is a national association of accounting firms that specialize in delivering creative solutions that meet the unique needs of the dental profession. The ADCPA is comprised of 24 firms, representing in excess of 7,000 Dental Practices, that provide progressive consulting, accounting and tax services.

ADS Transition Specialists (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 25.

time to mentor the purchaser and teach the new doctor how to run the practice, which could be very helpful. The selling doctor could also work to see patients the purchaser does not have time to see, since the buyer will still be working on becoming a more efficient producer and business manager. On the flip side, the selling doctor may require the purchaser employ them for a certain period of time which could cut into the purchaser’s cash flow.

Either way, it is highly recommended the employment of the selling doctor is agreed upon prior to the sale.

As you can see, there are many factors to consider in determining whether to purchase a practice or start one from scratch. Making one mistake in this decision could end up costing a doctor tens of thousands of dollars over the first few years of practice. It is highly recommended new doctors consult with dental specific professionals (transition specialists, attorneys, certified public accountants, etc.) to help them make the right decisions, avoid a disaster, and legally protect themselves. ■ Brad Kucharo is an associate of John K. McGill & Co., Inc. He is a Certified Public Accountant (CPA) and Certified Financial Planner™ (CFP®) practitioner and has been providing customized tax and business planning services exclusively for the dental profession for over 3 years.

He graduated from The University of Iowa and holds both a Bachelor of Business Administration degree and Master of Accountancy degree.

He formerly worked full-time at PricewaterhouseCoopers, LLP for almost three years performing customized tax and financial planning services for high net worth individuals. Brad is a member of the American Institute of Certified Public Accountants and the North Carolina Association of Certified Public Accountants.

8 Fall 2010 Dental Entrepreneur

www.dentalentrepreneur.com

Don’t just deflate.

Virtually eliminate gingivitis.*

With powerful mechanical and antibacterial actions, the NEW Clinical PRO-HEALTHTM SYSTEM for Gingivitis helps break the cycle of gingival inflammation and gingival bleeding for improved oral health in patients with mild to moderate, persistent gingivitis.

Specialized images show the average area and magnitude of improvement in gingivitis over time*

Before using the system: Significant gingivitis

2 weeks of use: Initial improvement of gingivitis

NEW SYSTEM!

6 weeks of use: Further improvement in gingival health

To learn more, visit dentalcare.com/clinical *Six-week clinical results with NEW Crest® PRO-HEALTH® Clinical Gum Protection Toothpaste, NEW Oral-B® Glide® PRO-HEALTH® Clinical Protection for Professionals Floss, and Oral-B® Professional Care SmartSeries 5000 Electric Toothbrush with SmartGuide™.

© 2010 P&G

PGC-3060

OPAD10984

Continuing the Care That Starts in Your Chair

Getting Started Rosiemarie Cruz, D.D.S

Beyond the walls of private practice:

Opportunities at any career stage in the

M

Army Reserve

ost of the students reading this are probably thinking about going into private practice, like I did when I graduated from UCLA Dental School in 1987. I enjoy the long-term relationship I’ve built with my patients over the years in Long Beach, Calif., but last year when I received an email about dental opportunities from the U.S. Army, I responded – taking the first step on a journey to a new and very exciting development in my career. Years ago, I had thought about joining the military after school and this Rosiemarie Cruz, D.D.S Army email piqued my curiosity – and a certain internal call of service to my country that had always stayed with me.

I am very proud of running a successful dental practice for more than 20 years and don’t intend to give it up. But as a major in the U.S. Army Reserve Dental Corps, I now have the opportunity to broaden my horizons and gain leadership experience while serving part-time.

I’m the type of person who enjoys learning new things and improving myself, and the Army is perfect for me. To succeed in the Army, I think it helps to enjoy new challenges and pushing yourself “out of the box” or your comfort zone. In the Army Reserve, I have the best of two worlds – I can continue to run my prac-

10 Fall 2010 Dental Entrepreneur

tice and treat my patients every day, and several times a year I use my professional skills in a completely different environment.

The benefits of service are attractive. As a Reserve Officer I receive extra regular income and various stipends and bonuses, including a signing bonus. I plan to take part in paid continuing education and special courses and I’m also eligible for loan repayment. I have already signed up for the Army’s health and dental benefits, as they are much better than what I can get through private insurance.

Reserve dentists commit to one weekend of service per month, conduct humanitarian missions overseas, treat soldiers departing for and returning from deployment, and participate in biannual trainings. Every five years, the Army can “mobilize” Reserve dentists – send them overseas – for 90 days. This can cause some dentists – especially those with an established private practice – to think twice about the impact on their business.

With my practice, I’ve come up with a good strategy. When I eventually deploy, I plan to hire a dentist to run my practice for three days a week while I’m away. I’m open with my patients about being in the Army and they’ve been very supportive.

Their response has been, “We’ll be here when you get back.” I have the greatest patients.

Although I am a mid-career Reserve officer, dentists can join the U.S. Army Dental Corps as early as the beginning of dental school up to age 60 (under

certain conditions). Dental students are eligible for the Army’s Health Professions Scholarship Program (HPSP), which pays the full cost of tuition, school-related fees and books, and a stipend of more than $2,000 per month during the school year.

In addition, scholarship recipients are eligible for a one-time $20,000 signing bonus. Students graduate virtually debtfree and begin their careers as active duty officers in Army dentistry. Not a bad deal in this economy.

Through the Army, I have the chance to eventually expand my expertise in new directions I never imagined. Simple skills like learning how to drive a Humvee, but also educational opportunities like a Master’s degree at George Washington University that would eventually allow me to be a liaison between the Army Reserve and Congress. The options and opportunities really are endless, and everyday I get an email about something new.

As dental students prepare to graduate and venture out into the clinical world – whether starting a private practice or joining an existing team as an associate – I offer one piece of advice: never stop learning or seeking new opportunities to grow. After more than 20 years of running my own dental practice I never expected I would be living this new adventure at this stage in my career – and enjoying it so much! ■ For more information www.drrosiemariecruz.com

please

see

www.dentalentrepreneur.com

Getting Started John H. Jameson, DDS and Cathy Jameson

Smart Starts

Getting your practice off on the right path

A

fresh, clean start. That’s something you rarely get in your practicing life. In fact, most dentists only get that chance once in a lifetime. You can start your practice so beautifully and so well that it literally changes your life and sets a tone of both booming success and quiet peace as you embark on the journey you’ve chosen.

How do you make the most of this precious opportunity; this precious clean start? Select your team carefully and commit to training so you are Dr. John H. Jameson united on the same path, with the same goals and believing in the same systems.

Know where you want to go and then communicate well with your team so the patients can sense Cathy Jameson that confident, systematic approach you share. Mastering this fundamental starting point will offset catastrophic situations from emerging their ugly heads throughout your practicing life.

As Practicing Dentist and Jameson coach Dr. Shannon Griffin says “I talk to fellow dentists all the time who spend their entire life in ‘I wish I had…’ mode.

That’s why I love being part of the Jameson Launch program to show dentists how important it is to address these issues NOW so it’s more of a cruise control or 12 Fall 2010 Dental Entrepreneur

keep up with technology mode later – it’s fun or regret. You choose from day one.”

Vision, goals, scheduling, financing – these are words you have started to consider, I’m sure. Some of you are taking that head on. Others of you are clos-

ing your eyes and hoping your software or your brilliant business manager will handle all of that while you just focus on the teeth. We challenge you to explore at least twelve of the critical factors of the business of dentistry right now. Take them

www.dentalentrepreneur.com

on as YOURS. You are the leader and the ultimate decision maker. You must care enough to tackle these concepts and develop your passion for the practice as a business right now – or you’ll pay later.

1. Production. Calculate your production goal carefully, not randomly. Analyze (perhaps with the help of your accountant) what the costs of running the practice are on a monthly basis. Then add that to your required and desired salary and compensation. This should be your minimally acceptable goal. This goal must go up every year or as your own costs of operation climb.

2. Collection. Establish a goal of collecting a minimum of 97-98% of all dollars produced. You will certainly have some months that exceed this minimally acceptable goal. You might collect a total fee before treatment begins or you might collect some outstanding accounts.

3. Accounts Receivable. Many dentists come to us in year five or ten trying desperately to get out of the banking business so we plead with you - don’t even start off carrying accounts on your own books. In essence, you are loaning money to your patients. Instead, get involved with and effectively use patient financing programs. Your accounts receivables should be no more than one half times your average monthly production—and that is only if you are accepting assignment of benefits of insurance. If you are not accepting assignment of benefits, then you should have no accounts receivable.

4. Patient Financing Programs. Get involved with patient financing and use the program extensively in your practice. Patients will benefit in many ways because they’ll be able to receive treatment that you recommend more comfortably and without owing you any money.

The practice will benefit in many ways, too, because you will receive your fees in a more timely fashion and gain a higher level of case acceptance. Your costs of operation will reduce because professionals are running the credit portion of your

www.dentalentrepreneur.com

business for a much lower cost than you would incur if you were running a banking business in your own practice.

5. Overhead. There are three ways for a practice to increase profit margin and lower overhead: increase production, decrease costs, and increase fees. I recommend that you work on all three of these areas. When you combine effort in each of the three areas, you will see significant increases in bottom-line dollars. It starts with tracking. Invest in good advice and proper training to maximize what you do take on as overhead. Include coaching and expert advice in your overhead from day one.

6. Scheduling. Scheduling must respond to production needs for the practice, physical needs of both the patients and the clinicians and the challenges that come with today’s busy people. Schedule for a daily production goal based on the monthly production/collection needs of the practice. Whatever you need to produce and collect per month will be

divided by the number of days you will be working within that month. There is your daily production goal.

If you schedule carefully and succinctly toward that goal in an organized and streamlined fashion, then you will reach the goal most of the time. Having those equitable days will lead to equitable months. Take out the roller coaster effect that comes with the “highs and lows” of unequally scheduled days and months.

Stress relief and business stability will result.

7. Broken Appointments and No Shows. Track these difficult challenges from day one. How many appointments are being broken or cancelled? Are they being rescheduled and voids filled? Do the same for your no shows. Unanswered and unevaluated no shows and broken appointments can be debilitating on a practice. Only when you track these critical factors can you have the black and white data necessary to make appropriate decisions related to alterations or adjustments that need to be made.

Business Beyond the Classroom

Resource Guide

ADS 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 5.

The Artist Evolution LLC 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 21.

Patterson Dental Supply Inc. 800 873-7683 www.pattersondental.com

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.

Dental Entrepreneur Fall 2010 13

8. Case Acceptance. Conduct comprehensive treatment planning on all patients. Then, carefully and regularly follow up on all patients who have dentistry diagnosed but left untreated. Schedule time and document the notes carefully so that your entire team has the communication and information they need to contribute to increased case acceptance.

9. Hygiene. Adopt the mindset that this is not just where most education about how to brush and floss takes place, but education about and validation for any diagnosed restorative treatment. In addition, the hygienist (who usually has a very close bond with patients) can introduce new treatment modalities or begin talking to a patient about new areas of concern since the last visit. Within this department there are multiple systems and critical factors. A few of these to monitor and evaluate are listed here: What is the hygiene production: daily, monthly, yearly? What percentage of the overall production of the 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 periodontal therapy? (Use your procedure analysis report to obtain accurate information on this critical factor.) How much restorative treatment is coming out of hygiene?

10. New Patients. As a business, generating new business is a critical factor.

New patients bring not only themselves to your practice but in many cases, the entire family. Even though you’re just beginning, know that you must treat new patients as if they’re your strongest referral source, powerful marketing tool, and a lifelong healthy patient.

From the day your doors open, track new patient goals. Develop an awesome new patient experience. Determine what you believe would be the best new patient experience a person could have. Then, make that happen—every single time.

14 Fall 2010 Dental Entrepreneur

11. Team. There is no question that no other critical factor, system or protocol in your practice can work effectively if you don’t have a great team working together to accomplish the goals that have been established for your practice.

12. Attitude. Life is much too short not to be surrounded by people who are excited about the practice, who are interested in excellence and who are willing to walk the extra mile to make sure that things go well. Do not let anyone pull you away from your dreams. There is no reason not to have your ideal practice.

Life is all about choice. Make a choice to surround yourself with people who have a positive attitude and who are willing to work at maintaining that attitude. ■ Learn more about John, Cathy and their team of comprehensive, in-office dental practice management and clinical coaches at www.JamesonMangement.com. There, you can register for a free webinar or inquire about the Launch program for those considering starting a practice from scratch.

Check Jameson out on Facebook, Twitter & YouTube also.”

www.dentalentrepreneur.com

Business Fundamentals Dr. Gene Heller

What Constitutes Value

When Buying A Dental Practice?

A

n existing dental practice is a small business. It is made up of a number of assets that together comprise the “value” of the business. The “sale price” of the business represents the “monetary worth” to be exchanged for the “sum of the values” of these various assets.

The relationship of the sale price to the value determines whether the purchase was a “good deal,” “fair deal,” or “bad deal.”

Many new dentists, unfamiliar with business principles, confuse “good value” with “a good deal.” A good deal means the asset is acquired for less than its value.

These new prospective business Dr. Gene Heller owners miss the point that while negotiating a “good deal,” they frequently destroy the very “value” they are trying to acquire. To avoid this loss of value, the new dentist needs to understand the value of the underlying assets being acquired, how to protect that value, and the relationship of the price to the value.

The Assets When acquiring a dental practice, the practice assets that comprise the value are easily defined. They are the tangible or hard assets, defined as dental and office equipment, furnishings and office décor.

Additional hard assets include the supplies, consisting of office supplies, clinical supplies, and “hand instruments.” Hand

www.dentalentrepreneur.com

instruments are those items that while not necessarily disposable, also have a relatively short, useful life. Any leasehold improvements paid for by the practice are also part of the tangible assets of the practice.

In addition to the tangible assets, best described and understood as items that one can see, feel, or touch, are the intangible assets, best described as assets one cannot see, feel, or touch. Of all the

dental practice assets, the “goodwill” of a dental practice is usually the dental practice asset with the highest value. This goodwill value is made up of many different components. First, and most important on the list, is the endorsement of the selling dentist. The value of the Seller’s referral to all patients of record, i.e., that in the future they seek the services of the Buyer, cannot be over-stated.

This referral or endorsement has the

Dental Entrepreneur Fall 2010 15

same impact as any “celebrity” referral or endorsement we have all seen in the media for any product, service or “provider” of service. The trusted referral source (in this case “the Seller”), has a long standing and trusting relationship with the individual to whom the referral is being made (“the Patient”), and has special knowledge of the product, service, or in this case provider (“the Buyer”), that allows the Seller to attach their name, reputation and relationship history to the individual being endorsed (“the Buyer”).

And it is “the value” of this most important asset (“the referral or endorsement”) that can be readily decreased or destroyed if the Seller does not feel they have been paid a fair price or has been forced to accept other less than desirable terms to allow the sale to happen. In other words, if the Buyer beats the Seller up (negotiates the price down) to get a “good deal,” the endorsement of the Seller will not be as strongly worded and in fact the Seller may withdraw that endorsement after the sale occurs, feeling, in fact, that the Buyer did not pay fairly for that endorsement and the goodwill value attached to it. In the Seller’s mind, withdrawing the endorsement is the only means available to off-set

The higher the number of new patients per month, the greater the value for this portion of the goodwill. being taken advantage of by the Buyer.

Another primary component of the goodwill value is the “active patient base or count.” The purchased collection of patients (the active patient base), who frequent the practice and spend their money with this selling dentist for dental services, have been acquired by the Seller over a period frequently of 7-15 years.

It is the time it has taken to build this active patient base that makes the existing practice so valuable. Certainly one can start a practice from scratch with nice new equipment at a lesser cost than purchasing an existing practice, but the first day in the existing practice has a full patient schedule (and the cash flow this

Business Beyond the Classroom

Resource Guide

Lightspeed Multimedia, Inc. john@jumptolightspeed.com www.jumptolightspeed.com

Don’t settle for the same generic look as every other dental professional in the area! Stand out with a professionally designed image created for you and your practice. Please see our ad on page 17.

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 19.

Medical Protective 800-4MEDPRO www.medpro.com

Since 1899 Medical Protective has been the nation’s leader in dental professional liability. As a member of the Berkshire Hathaway group of businesses, Medical Protective provides dentists and oral surgeons with four levels of unmatched protection - strength, defense, solutions, since 1899. For more information, visit www.medpro.com or call 800-4MEDPRO.” Please see our ad on page 23.

16 Fall 2010 Dental Entrepreneur

full schedule provides) while the first day, week, and months of a new practice has multiple open hours with no patients to be seen.

In addition to the actual number of active patients, the type of patient base, i.e., are these patients who are looking for and accept comprehensive dentistry or are they patients who only seek services when they are in pain, requires investigation to determine just how valuable this patient base may be. However, any full-time active patient base provides cash flow from day one. This is the reason most lenders will much more readily lend $500,000 to purchase an existing practice versus $300,000 to finance a start-up practice-less risk to the Buyer and a greater likelihood of repayment of the bank loan.

While the most valuable asset in this intangible group is the goodwill, there are other intangible assets of the practice such as the new patient flow, existing staff, current marketing system, business systems, and location of the practice. The new patient flow also adds to the goodwill value. The higher the number of new patients per month, the greater the value for this portion of the goodwill. Whether these new patients are from internal referrals from the practice’s existing active patient base or the result of an effective external marketing program, they are a highly desired asset to a practice being acquired.

And the final intangible asset of an existing practice is the Seller’s promise not to compete against the Buyer of the practice. If the Seller accepts employment and establishes a new practice in close proximity to the original practice, many of the Seller’s active patients of record will follow the dentist to the new location. If this happens, the Buyer will lose a major portion of the most important and valuable asset they have just purchased, i.e., the active patient base. This point again indicates just how valuable the active patient base and how closely this aspect of the goodwill must be protected. In fact, the value of the goodwill and the non-compete covenant are so entwined and difficult to separate, that from a taxation perspective, the IRS allows the cost www.dentalentrepreneur.com

allocation of both to be considered totally as goodwill, thereby giving the Seller the more favorable capital gains tax treatment for the entire value.

Defining the Value of the Various Assets The “asking price” for the dental practice is typically determined through an appraisal or valuation of the individual assets of the business (the dental practice).

In most instances, the asking price will be at or slightly above the “fair market value” of the sum of the values of these assets. The definition of “fair market value” frequently quoted is the Internal Revenue Service definition. Per the IRS, the “fair market value (FMV) is the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts.” This fair market value is further defined as the price at which similar practices with similar overheads and profits are selling at this particular time in the market area the practice is located in. By setting the “asking price” slightly above the fair market value, many sellers hope this will provide some flexibility for “price” negotiation.

Determining the fair market value and

In today’s market, the goodwill value for a dental practice is 50-150% of either the most recent twelve month adjusted profit or the weighted average of the last several year’s adjusted profit. asking price for the assets is an accounting process. The current fair market value of the equipment, office and clinical supplies, hand instruments, and leasehold improvements are determined using industry data based on a number of factors including age, original purchase price, and ongoing “used” sale prices for the individual assets being appraised. To this total value of the tangible assets is added the value of the goodwill/noncompete covenant.

In today’s market, the goodwill value for a dental practice is 50-150% of either the most recent twelve month adjusted profit or the weighted average of the last several year’s adjusted profit. 100% is the typical multiplier for a general dental practice, unless special conditions warrant using a higher or lower value. Examples of these special conditions include the practice of a deceased dentist seller which has been inactive for 3-6 months. In this case, the percentage for this goodwill would probably be 50% of the adjusted profit.

In the case of an aging dentist whose personal production is in decline but whose hygiene department is continuing to maintain the active patient base, we frequently see a build-up of needed but uncompleted dental services and a higher percentage multiplier is indicated.

Regardless of the proposed fair market value or asking price, the actual “sale price” may be above, equal, or below the actual calculated “fair market value.”

Why a “Fair Deal” Constitutes the Best Value The old saying, “You get what you pay for,” could not be truer when it comes to purchasing an existing dental practice. To preserve the goodwill of the Seller, the

Get more patients.

And look good doing it.

Customized Graphic Design, Marketing and Website Development for Dentists and Dental Practices www.jumptolightspeed.com

www.dentalentrepreneur.com

Dental Entrepreneur Fall 2010 17

most valuable part of goodwill, the Seller must believe they are being paid a “fair price.” Nickel and diming the Seller during “negotiations,” whether on price or terms of the sale, destroys or significantly decreases the value of that portion of the goodwill. A Seller who feels they have been cheated and continues to live in the community will have no problem telling every patient they see on the street or at the corner grocery about how they view the “integrity” of their successor, and the anti-marketing impact of the local community “rumor and gossip chain” should never be under-estimated. Many of these patients have trusted everything the dentist has said for many years, so the retraction of their endorsement will also be given full credibility and attention. If the Seller feels they did in fact get a fair price and terms, the new Buyer will receive the opposite (and desired) ongoing positive marketing on behalf of their new practice.

The trick comes in determining wheth-

er the seller is being “fair” in their asking price. Some sellers have an over-inflated idea relative to what their practice is worth and what price they are willing to sell it for. Many dental practice brokers will tell the new dentist anything necessary to get them to sign on the bottom line. It is for these two reasons, coupled with the reason to pay a “fair price” to achieve the maximum value for the practice being acquired, that the new dentist is well-advised to hire their own experienced Buyer Agent to assist in evaluating the practice, conduct the negotiations, etc.

The best Buyer Agent is one who hopes to have an ongoing business relationship with the Buyer for many years to come.

Dr. Eugene W. Heller is the vice president of Professional Practice Transitions, a nationwide dental practice sales and consulting organization. He can be reached at 1-888477-8552.

Business Beyond the Classroom Oxyfresh Worldwide Inc. 800-333-7374 ref# R23037601 aduff2@aol.com

P&G Oral Health 1-877-418-5559 (Option 1) www.dentalcare.com

Resource Guide

Since 1984 thousands of dental professionals have discovered Oxyfresh’s safe and effective oral health products for use in longterm care and maintenance of their patients. Retail sales, wholesale rebates and “free product” programs allow you to get paid appropriately for providing professional guidance and instruction to your patients. Ad on page 27.

P&G Oral Health markets a wide range of products to Dental Professionals, including Crest and Oral B brands. With our ProHealth system from Crest & Oral B, Professionals can now recommend a system that virtually eliminates plaque and helps prevent re-growth. Please see our ad on page 9.

To learn more visit www.virtuallyplaquefree.com

dental

Business Beyond the Classroom

entrepreneur If you have any questions,

comments, or responses to our magazine, please write us at: Dental Entrepreneur Magazine, 7422 Carmel Executive Park #107, Charlotte, NC 28266

Henry Schein Professional Practice Transitions (PPT) 1-800-730-8883 ppt@henryschein.com www.henryschein.com/ppt

Henry Schein Professional Practice Transitions (PPT) is the practice sales division of Henry Schein, Inc. Our affiliation with the largest dental supply company in the country—intent on servicing the practice buyer’s future supply, equipment and service needs―makes PPT the only company with a vested interest in the buyer and a careerlong trusted relationship with the seller. (Please see our ad on the inside back cover.)

18 Fall 2010 Dental Entrepreneur

or e-mail us at: ADuff2@aol.com or Linkbeau@aol.com www.dentalentrepreneur.com

www.dentalentrepreneur.com

MacPractice Schedule

MacPractice Chart

MacPractice DR

MacPractice Attachments

MacPractice DDS 3.7

MacPractice iPhone / iPad Interface

Of course you know MacPractice DDS is the only Mac multi-specialty dental software, but did you know that...

MacPractice Note

MacPractice DDS can also be used on PC Terminals.* Interfaces from MacPractice DDS to PC-only imaging products function as well. * Requires a Mac Pro , Mac OS X Server and Aqua Connect Terminal

Visit MacPractice.com for product information, events, screenshots and a demo.

Exhibiting at most national and regional dental meetings - MacPractice.com/events

Business Fundamentals Gretchen Lovelace and Preston Lovelace ADS Transitions

Business Administration For the Aspiring Practice Owner

A

s with any subject worthy of its own alphabet soup degree, we cannot hope to cover the breadth of topics covered by the term “business administration” in this article. Rather, we will hit the highlights of things young professionals do wrong (or totally fail to do) most Gretchen Lovelace often. These issues include staffing, patient coordination, inventory control, accounting and fraud prevention, and various personal and professional financial issues.

innocuous questions like “do you have children?” or “how old are you?” can establish the basis for an employment discrimination lawsuit. When hiring for a given position, have a set list of questions to ask candidates with an idea of the ideal responses. Ask questions related to the job, and avoid questions regarding: race, color, sex, religion, national origin, birthplace, age, disability, or marital/family status.

Having a consistent set of questions for all applicants can help you avoid many of these interview pitfalls.

Never have a meeting with any staff member of the opposite sex behind closed doors. Always have another staff member present if the door will be closed.

If you have to fire an employee, inform her in mid-afternoon with only one witness present. During termination, deliver the required termination letter or pink slip to the employee. Explain, but do not debate, the reasons for termination.

Do not argue with the employee. The things you say during a termination can help establish the basis for a lawsuit, so the less you say, the better. State employment laws vary considerably, so contact your state employment commission for guidelines or consult with an attorney BEFORE firing the individual.

Pay your employees on the first and fifteenth of each month, not every Friday.

Pay all payroll taxes that same day either

Practice Staffing Total compensation for your staff will vary depending on the cost of living and market conditions w h e r e you locate.

Regardless of locaPreston Lovelace tion, all forms of staff compensation should not exceed 25% of the gross income (this excludes the dentist or associate and includes payroll taxes for the staff). Any additional increase in staff costs directly affects profitability.

Employment discrimination laws limit the type of questions you may ask potential employees. Even 20 Fall 2010 Dental Entrepreneur

www.dentalentrepreneur.com

online or on the phone. Waiting to pay payroll taxes until they are due gets many dentists into financial trouble.

Patient coordination All new patients need an initial examination by the doctor, not the hygienists.

By law, patient diagnosis is the dentist’s job. It is also the dentist’s first opportunity to interact with the patient and make a good impression.

The treatment plan is the road map for the staff to follow after your diagnosis. In order for the office to run smoothly, the treatment plan must contain all of the following components: 1. Treatment to be performed 2. Appointment number at which treatment will be performed 3. Time required for each appointment broken down into producer and non- producer time units (usually 10 minute blocks) 4. The fee (if different from the standard fee) Most dental software packages allow you to chart the needed dentistry and generate a partial treatment plan. The doctor must then sequence the treatment and add the producer and non-producer times for each appointment.

The two-part patient consultation follows the treatment plan. The first part of the consultation is an explanation of the procedures by the dentist (preferred) or assistant. The second part, performed by a staff member, covers all financial arrangements. Financial arrangements include: reviewing the office financial policy with the patient, providing a written copy of the treatment plan with fees to the patient, and establishing a payment amount and method for each appointment. Finally, the staff should schedule all of the patient’s appointments.

If the treatment plan includes producer and non-producer time for each appointment, scheduling for efficiency and productivity becomes possible. By staggering provider time in one operatory against non-provider time in another, an office can keep the doctor busy with minimal down time. The idea is to never have the doctor in two places at once and to never have the doctor standing idle. www.dentalentrepreneur.com

Inventory control Inventory control is easier and cheaper if you consolidate supply orders. Try to keep between one and three months of supplies on hand (depending on storage space). A large order takes the same amount of time and labor to place as a small order. Your staff labor is your most costly commodity in the practice, and making repetitive tasks less frequent gives them more time to do other things.

Track supply stock on a spreadsheet to make reordering easy.

Accounting & Fraud Prevention The financial aspects of practice management are some of the most neglected areas of the dental education. While accountants are still needed, dentists must have some knowledge of accounting and record keeping in order to be successful and prevent fraud.

Practice Image Builders does exactly what our name says: We build the image of your practice by providing you with a practice brand and identity, building your website, and providing you with all the marketing materials necessary to connect with your patient and referral community – at an affordable cost.

Comprehensive Branding and Identity Package

$7,900

Logo • Business Cards* Letterhead/Envelopes* Referral Brochure* Appointment Cards* Practice Overview Brochure* Website Design/Development Exterior Signage Graphics Your Comprehensive Branding and Identity Package includes all graphic design, brand consulting, copy writing, web design and hosting, and printing and shipping of 1,000 quantity* of each of all marketing materials.

For more information, contact The Artist Evolution, LLC at 866-610-5334 or visit www.practiceimagebuilders.com

Dental Entrepreneur Fall 2010 21

Personal and business accounting software packages are now web-based and will interface with your bank accounts to track deposits and pay bills. These same programs allow you to categorize and track your expenses to protect your business from fraud. In addition to good accounting practices, a number of controls must be put in place to prevent financial irregularities from occurring.

First, set the user access in your practice management software to appropriate levels. Only the doctor should be able to void or adjust any transactions. This is a hassle for the doctor when authorization is needed, but sharing high-level access with subordinates is a recipe for disaster.

Secondly, all deposits must be checked and tracked. Get a notebook or ledger and list cash and checks together and credit cards by issuer. All credit card companies charge a discount or fee to allow use of credit cards in your business. Make sure your credit card companies deposit the full amount and take their portion (discount) separately. Do not allow them to deposit the difference because it becomes impossible to reconcile your deposits.

Never take any cash out of the deposit.

All deposits must be made daily and match the dental software deposit slip each day, even if deposits are not taken to the bank daily.

Match your written ledger against the deposits in your accounting program each week. If the deposits do not match exactly, investigate with your staff and bank. Do not abdicate your financial due diligence to your staff or your CPA. Your spouse is acceptable. Sign all checks or pay bills online or with credit cards. Inspect the “Profit and Loss” or “Income Statement” every month to assure the total income on your accounting program matches the income on the dental software package.

Check the percentages of overhead on a monthly basis and year-to-date basis to watch your percentage of overhead. If it seems high, investigate.

Insurance Life insurance and disability insurance are required in order to borrow money to purchase or start a practice. Do NOT purchase any form of an annuity unless you 22 Fall 2010 Dental Entrepreneur

are uninsurable because of a chronic condition and you cannot get life insurance any other way. Annuities pay the highest commission to the seller and are often pushed by insurance companies. They work well for people who are mentally and physically incapable of ever handling their own money. As a dentist, you do not fall in that category.

1. Life Insurance: Purchase straight TERM life insurance. If you can get a “guaranteed” premium for ten years, purchase that policy, but make sure to conduct price comparisons.

2. Disability Insurance: should be “own occupation.” Check with your state dental association to locate their endorsed carrier because the organization usually shopped the cost or cut a deal for the endorsement.

3. Malpractice insurance: Malpractice insurance should be less than $2000 per year. There are two types: claims made and occurrence. Again, check with your state dental organization for the endorsed carrier. Many states have a patient compensation fund to limit liability. If your state has this, definitely participate.

4. Health Insurance should have a high deductible to be cost-efficient.

Finances: Debt, Negative Amortization & Other Traps The best financial advice is to service all debt as quickly as possible. There are no “truth in lending” laws for business.

When making business loans, lenders are not obliged to explain the pitfalls of the loan to young dentists. It is the dentist’s responsibility to request the terms of any loan before he/she signs for the loan.

Beware of “lease purchase” agreements and pre-payment penalties for all loans.

An amortization schedule of a loan shows the balance and interest paid to date for each payment of the loan. For a seven year loan, the amortization schedule will show your balance after each of the 84 payments. All companies should give you an amortization schedule when you borrow money or purchase equipment.

Some finance companies and equipment salesmen state there is NO prepayment penalty for the loan, and NO amortization schedule. Unlike normal loans where part of each payment reduces the principal and part is interest, these companies get all of the interest for the entire length of the loan out of the first payments. If $30,000 is the interest over the life of seven year loan for $100,000, these lenders will take the $30,000 first. If you attempt to pay off the loan at eighteen months, you may owe $104,000 instead of $90,000. If a lender does not give you an amortization schedule which shows your principal balance reduced with each payment, beware of borrowing money from that company.

This article should assist you in realizing your areas of weakness in business administration. Managing your business is like a second job on top of your clinical work, and you will be tempted to neglect it after a long day of dentistry. Resist this urge and try to learn as much as you can of the business side of dentistry. Feel free to contact your ADS representatives if you need assistance or have questions on practice management, affiliations or practice acquisitions. ■

Preston Lovelace, J.D., M.S. is the vice president of ADS Lovelace and Associates in Baton Rouge, LA. He specializes in practice transitions, appraisals, practice management, and associate placement in Louisiana and Mississippi. He is a member of both the Louisiana State Bar and U.S. Patent Bar. He may be reached at 225-927-8015 or PLovelace@gmail.com

Gretchen Lovelace, MS, CFP, CPM is the president and founder of ADS Lovelace and Associates, Inc. She has 30 years of practice management experience and has been a guest lecturer at the LSU School of Dentistry for the past 18 years. She is a member of The Financial Planning Association, the Institute of Business Appraisers, a licensed realtor in LA and MS, notary, and a member of ADS. She may be reached at 225-927-8015 or GretchenL@adstransitions.com.com

www.dentalentrepreneur.com

The easiest Dental Exam you’ll ever take

DENTAL MALPRACTICE EXAM When selecting dental malpractice insurance, you should choose: The company with the strongest claims defense The most experienced company The dental malpractice company with the highest financial ratings Medical Protective is “All of the Above”

Before you see your first patient, you’re going to have to choose dental malpractice insurance coverage.

Some new dentists give it little thought and automatically settle for the first insurer they hear about or use their employer’s company. But it’s your career on the line, and there are significant differences in the quality and value of companies and coverage available. Choose the company that more dentists have trusted since 1899 to protect their reputations, practices and assets. Choose the strongest malpractice insurer — Medical Protective.

Ask about our malpractice protection specifically designed for new graduates. dental@medpro.com www.medpro.com 800-4MEDPRO ©2010 The Medical Protective Company®.

Trust the dental malpractice experts.

Business Fundamentals Leslie Franklin

Protect Your Most Valuable Asset:

W

hen Dr. Jennifer Lee was in school, older dentists would tell the students to use better posture—“but it didn’t really ring a bell until after I’d been practicing for two years,” the Honolulu, Hawaii, dentist says. “I lost range of motion in my neck. The chiropractor told me it was a common complaint among dentists and gave me some specific exercises and stretches that helped. The experience really got my attention.”

As Dr. Lee has learned and you Leslie Franklin probably know, too, dentistry is a physically demanding career… and problems can develop at any age. Your neck, shoulders, back, wrists, or hands can easily become stressed and injured, and the cumulative effect could be potentially disabling.

Not every disability can be prevented, of course, but some can be avoided or minimized through ergonomics—the science of fitting the job to the human being. “Set up your practice in an ergonomically friendly way from the start, and you will likely add many more years of pain-free practice,” says Bea Hubka, CDMS, CCM, a vocational rehabilitation specialist in Denver, Colorado. Hubka is an independent consultant to the ADA Insurance Plans, which are underwritten and administered by Great-West Life & Annuity Insurance Company.

“From day one, young dentists should think about their work routine and equipment, and be aware of repetitive or otherwise potentially damaging motions or 24 Fall 2010 Dental Entrepreneur

YOU

postures that can lead to disabling conditions,” Hubka recommends.

Painful Facts The goal of ergonomics is to design jobs, tasks, products, and environments according to the cognitive and physical capabilities and limitations of the individuals who perform the tasks or use the products. One important objective is to promote body positions, routines, and tools that place the least amount of stress on the body.

Yet, dentists often do the opposite— twisting and bending into awkward positions, tightly gripping small tools, using forceful, repetitive motions, and working long hours without breaks. The possible result is musculoskeletal pain that could lead to a serious physical disability.

In fact, back and cervical disabilities accounted for nearly one-third of all open claims paid to disabled dentists under the ADA Income Protection Plan in 2009.

When arthritis and conditions affecting the wrist and nervous system were added, the number rose to more than half.1 To avoid becoming a disability statistic, Hubka urges dentists to ignore old adages like “no pain, no gain” and “work through the pain,” and to take warning signs seriously. “Pain, inflammation, numbness, and other symptoms of muscle overuse may be signals of a worsening condition, and if not checked, could lead to a permanent disability,” she says. “Make it your goal to practice pain-free by incorporating ergonomics into your day.”

Valerie Rice, Ph.D., CPE, president of the Foundation for Professional Ergonomics in Bellingham, Washington, notes that specific ergonomic recommen-

dations may differ depending on the physical requirements of your specialty and the tools you use. “The aim is the same, however—to increase work efficiency and effectiveness while reducing the pain, soreness and musculoskeletal disorders common to dentistry” she says.

Prevention Tips Hubka and Rice offer the following general tips to help achieve pain-free clinical activity: Scheduling Take frequent breaks. Pausing even briefly can minimize fatigue and stress on your body. Use the breaks to do something different physically—stand up, move around, make a phone call, consult with a patient.

Schedule your day to alternate long, difficult procedures with shorter, easier ones.

Body posture • Alternate between sitting and standing.

• Keep your spine, head, and arms in a neutral position whenever possible. Avoid bending, twisting, and pulling movements. www.dentalentrepreneur.com

•

Develop visual or verbal cues with your team to remind one another of postures throughout the day.

During procedures • Reduce reaching by placing frequently used instruments and materials nearby.

• Stretch your hand and fingers each time you put down a tool.

• Bring the patient close to you while you work, to reduce the requirement for strong forces.

Equipment • Invest in lightweight, high-speed hand tools with larger diameter handles and textured grips.

• Make sure loupes are tailored for your individual needs.

• Look for an operator’s stool with good back support and foot and arm rests. Ask the vendor about in-office fittings, and the oppor-

ADSNL_003

tunity to test the equipment for a couple of weeks before buying it.

Staying healthy and pain free doesn’t stop at the office. “At home, be aware that activities like pulling weeds or using a screwdriver are similar to the hard, repeated gripping you do at the office,” Hubka says. “Limit your use of chain saws, electric drills, and other vibrating tools that mimic the stressful motions of dental drills.” Experts also suggest you monitor the time spent text messaging to avoid “Blackberry Thumb.”

Rice recommends incorporating exercises into your fitness routine that build core strength and emphasize stretching and musculoskeletal balance, while modifying workouts that could place additional stress on muscles used at work.

To reduce mental stress, which tightens muscles even more, try aerobic exercises,

Half Page Ad REV2.qxd:Layout 1

2/14/09

6:36 PM

Page 1

massage, or yoga, or make time to enjoy a relaxing hobby like photography or reading.

Something More Just as a healthy diet can’t guarantee that you’ll never be sick, ergonomics can’t guarantee that you’ll never face a disability.

That’s why it’s critical to have disability insurance as another part of your risk management plan. Disability insurance can provide financial protection for you, your family, and your practice if physical pain or limitation should ever prevent you from working as a dentist.

If you haven’t purchased disability insurance yet—or want to take a second look at the coverage you already have— here are two pointers to keep in mind: • Get true “own occupation” coverage. This means you can qualify

Make the perfect transition

Making that first transition into your career is the most important decision you will ever make. For more than 30 years, ADS and its local transition specialists have helped dental graduates like you make the perfect first transition. As the nationwide leaders in practice purchases, we know the best opportunities wherever it is that you want to be. We are dedicated to your success.

Get off to the perfect start. Visit us online to find your local ADS representative.

ADStransitions.com/localrep www.dentalentrepreneur.com

Dental Entrepreneur Fall 2010 25

•

for benefits if a disability prevents you from working in your dental specialty, and you can continue to receive full benefits even if you decide to pursue another career such as teaching or consulting.

(Some policies, in contrast, only pay benefits if you are unable to work in any occupation, or reduce your benefits proportionate to your other earnings.) Also make sure the “own occupation” definition of disability extends to a high age, rather than changing to “any occupation” after just a few years.

Take advantage of guarantee issue opportunities. “Guarantee issue” or “open enrollment” generally means the coverage is guaranteed to anyone who applies, regardless of health or income level. This can be a meaningful “free pass” that lets you get coverage quickly and without risk of being turned down. The ADA, for example, now offers a basic amount of guaranteed disability coverage to students under 40— and premiums are paid by the ADA Insurance Plans during dental school. After graduation, par-

ticipants have the right to convert coverage into the ADA Income Protection and ADA Overhead Expense plans for practicing dentists without taking a medical exam.

You are your practice’s most valuable asset. Bring ergonomics into your daily routine so you can enjoy many years of pain-free practice, and get the insurance you need to protect your finances against life’s unexpected events. ■

To Learn More Browse: Three resources to check out: ADA ergonomic tips at www.ada.org/ sections/educationandcareers/pdfs/ ergonomics.pdf Mayo Clinic at www.mayoclinic.com.

Search under “ergonomics.”

Practice

Dentistry

Pain-Free:

Evidence-Based Strategies to Prevent Pain

and

Extend

Your

Career,”

Editor’s Note: This article does not constitute legal, financial, or medical advice.

Please seek professional input as appropriate to your situation.

Bethany Valachi, PT, MS, CEAS,

Leslie Franklin is Director of New Dentist Markets at Great-West Life & Annuity Insurance Company. She helps new dentists and dental students use insurance to attain their personal and professional goals. GreatWest underwrites and administers the ADA Insurance Plans and provides group life and disability insurance to ADA members. For more information, call 888-463-4545, go to www.insurance.ada.org, or contact Leslie directly at leslie.franklin@gwl.com.

Observe: Take photos or make

Business Beyond the Classroom

Posturedontics Press, 2008.

a video recording to analyze your posture and movements at work and how you can improve them. Enlist a colleague to observe you and provide feedback.

Consult: An ergonomist can help evaluate and design office space, assess

Resource Guide

you

your

treat

operatory,

patients,

and

watch make

recommendations. Ask your physician PARAGON Dental Practice Transitions www.paragon.us.com 866-898-1867

Scottsdale Center for Dentistry Company 866.781.0072 www.scottsdalecenter.com

Offices located Nationwide. PARAGON offers professional consultation and related services to healthcare professions with primary emphasis on the dental profession: comprehensive dental practice valuations (including a written valuation and analysis report); practice sales; pre-retirement sales; practice acquisitions; practice mergers; associateships; partnerships; practice consolidations and practice management. References available by request. Please see our ad on page 33.

Practice Harmony at Scottsdale Center for Dentistry is designed to help shape your practice and drive your personal success. Unlike other office design programs, Practice Harmony considers your vision, goals, practice style and economic realities to develop a personalized plan for creating the practice of your dreams. Please see our ad on page 29.

for a referral to an occupational therapist or physical therapist trained in ergonomics. Look for someone who

has

worked

with

dentists

and who has a credential such as Certified Professional Ergonomist/ Human Factors Engineer (CPE or CHFE). The Board of Certification in Professional Ergonomics lists certified individuals (www.bcpe.org). You can also consult any dental school, your

US Army Healthcare 800-336-1575 www.goarmy.com/amedd/

An Army Dentist does much more than practice in one area of dentistry. As an Officer and a dentist, you may have the opportunity to advance your education in areas such as: oral surgery, prosthodontics, endodontics, periodontics and orthodontics. Please see our ad on page 11.

26 Fall 2010 Dental Entrepreneur

state department of rehabilitation, or local Occupational Safety and Health Administration (OSHA) office for recommendations.

www.dentalentrepreneur.com

It's not just our new look giving hygienists and patients more to smile about.

• It’s our simple system that complements the extraordinary care you provide every day.

• It’s our unique ingredients and the ability to customize for all your patients’ needs.

• It’s the home care support for all your cosmetic and hygiene services.

safe.proven.

In partnership with

To receive your FREE BREATH SPRAY and to learn more, visit:

www.oxydental.com/RachelW

Business Fundamentals Nancy Stahulak

Navigating the Dental Malpractice Maze

T

here are a variety of decisions you will have to make over the course of your career. One of the most difficult could be selecting a professional liability carrier. After all, not only do you have to wade through unfamiliar terms, but you have to make a decision that will affect you years down the road.

While it may seem like a daunting task, sometimes just having the right questions can make all the difference.

At this point in your career, you most likely have never been sued. Your fellow students probably have never been sued.

You may not know anyone who has ever been sued. However, it is important to recognize that each year approximately 8,500 of your colleagues are named as defendants in malpractice lawsuits according to the National Practitioners Data Bank. A lawsuit is not necessarily the tool that measures “good” or “bad” dentistry, but the end result of a malpractice claim can be traumatic, time-consuming and expensive— regardless of the final verdict.

Dental liability insurance can be confusing. What questions should you ask?

What do you need to know about your policy?

First, you need to read the policy carefully. Ask the insurer if there are any other documents (such as an association’s bylaws) that might impact your rights and obligations. Review this information with an attorney experienced in insurance and contract law. Ask the following questions: Is consent to settle required? How much control does the policy allow an individual dentist to have when making decisions

28 Fall 2010 Dental Entrepreneur

regarding the settlement of a claim?

After all, settlement of a claim involves more than money – it can impact your reputation, your practice and even future insurability. Who decides if the claim will be presented to a jury…the insured…the carrier…an arbitration panel? If you object to settlement and the trial verdict is higher than what you could have settled for, will you be personally liable?

Ask if you have a voice in your defense.

Know what rights, if any, the policy gives you if settlement is considered.

Occurrence or Claims-Made? Your policy will most likely provide professional liability coverage on either an occurrence or claims-made basis.

Occurrence coverage responds to claims based on when the incident occurred, regardless of when the claim is actually made against you. As long as the incident occurred during the policy period, your occurrence policy will respond— even if the claim is made after the policy period expires.

Claims-Made coverage, by contrast, responds to claims based on when the claim is first made against an insured.

Given the length of time that can pass

between an incident and a resulting claim, claims-made policies contain a retroactive (or “prior acts”) date. This retroactive date allows the policy to look back in time and consider prior incidents. As long as the incident took place after the policy’s retroactive date (or “prior acts date”), and the claim is first made during the policy period, your claims-made policy will respond.

If you renew your claims-made policy with the current carrier, your coverage will continue uninterrupted. However, if you move to another professional liability carrier, your claims-made coverage ends and you will have to either obtain a reporting endorsement from the prior carrier (often referred to as “tail” coverage), or purchase prior acts coverage from the new carrier.

A reporting endorsement allows you to report claims based on incidents that took place between the retroactive date and policy termination date, but are first made after the policy coverage terminates.

If your prior carrier is unable or unwilling to provide you with a reporting endorsement, you will have to seek coverage

www.dentalentrepreneur.com

for these “prior acts” through your new carrier.

However, new carriers will consider the financial stability of your prior carrier. If the prior carrier is considered financially unstable or insolvent, the new carrier will be less willing to extend coverage for any prior acts. Since this could impact your insurability and create coverage gaps, it is important to purchase coverage from financially stable companies. Remember, coverage, including extended reporting endorsements, is only as good as the longterm financial health of your carrier.

As with the policy itself, you need to review the language of any reporting endorsement offered. Understand your right to obtain an offer of tail coverage, how the premium (if any) will be determined, and the length of time you are given to report claims.

What triggers coverage? Whether you have a claims-made or occurrence policy, you need to understand what triggers coverage. Does the claims-made policy, for example, allow you to trigger coverage by

reporting incidents you reasonably believe could result in a claim? If not, when can you trigger coverage? Do you have to wait for a formal demand for damages or lawsuit before the policy responds?

Is your premium guaranteed?

Typically, admitted professional liability carriers are “Advance Premium” companies. This means that the premiums paid by the policyholders are established at the beginning of the policy period and are guaranteed not to increase regardless of any adverse loss development experienced by the company for that policy year.

What about policy cancellation or modification? What if there is a change to the policy terms or conditions? Will you receive advance, written notice? Will you have the opportunity to examine your options and secure alternative coverage if necessary?

Beyond the Policy – Risk Management Solutions Does your pro-

fessional liability carrier go beyond the policy to help you improve patient safety and reduce risk? Do you have access to the tools and resources necessary to support those efforts?

Effective risk management is critical for all healthcare professionals. It requires extensive knowledge of the myriad of issues affecting today’s providers, and helps you find creative answers and meet the most pressing challenges.

Understanding the relationship with your professional liability carrier is critical. Invest the time to examine your policy’s benefits, coverages, and costs.

Ask questions. Compare offerings.

Information is Power. ■

At Medical Protective we’re proud to offer you our expertise and dedication to fulfill and service your insurance needs as they develop and change.

For more information, visit www.medpro.com

Implement our Practice Harmony™ office design curriculum and unlock the key to success for your office, your client base, and your life.

Approved PACE Program Provider FAGD/MAGD Credit Approval does not imply acceptance by state or provincial board of dentistry or AGD endorsement (4/1/2008) to (3/31/2012)

www.dentalentrepreneur.com

www.scottsdalecenter.com 1.866.781.0072 Dental Entrepreneur Fall 2010 29

Practice Builders Scott Mahnken

Your Best Shot at a First Impression:

Creating Long Term Patient Relationships

A

s many of you may be aware, it’s estimated that 50% of Americans avoid dental care due to fear of pain; most notably, the pain associated with injecting anesthesia.

What’s a bit more surprising is that dentists report that they too experience certain fears and stresses when administering anesthesia. Some dentists will tell you that the training they received in dental school administering injections was simply too brief.

A typical dental school curriculum might focus on injection technique training for just two weeks. Yet, upon graduating the Scott Mahnken new dentist recognizes the importance of administering comfortable injections and the role of the injection as it relates to the doctor – patient relationship.

Dentists have been seeking solutions to overcome the challenges encountered when administering anesthesia to patients for years. The fact remains, the traditional syringe used in dentistry today has hardly changed since being developed over 150 years ago. Patients look at the syringe as a threatening instrument as they see the polished metal and long needle appear in their site line.

So how do dentists somehow make a good first impression when the procedure starts with the patient’s least favorite moment?

Some dentists claim they give “per-

30 Fall 2010 Dental Entrepreneur

fect pain-free injections!” Yet a recent University of Washington study found that the majority of patients will not voice their opinions (to the dentist) regarding any pain they experienced during the procedure. Certainly they’ll tell friends and family about the pain, but the average patient simply won’t complain to the dentist. This is understandable when one considers that many patients look at their dentist as an authority figure and an expert. Two common reactions from patients are “maybe it’s supposed to hurt,” and “how will it affect our doctor

patient relationship if I complain about the pain?”.

Fortunately for patients and dentists alike, manufacturers have been diligently pushing their R&D teams to develop a better solution.

The results of the research combined with today’s technology led to the development of a few new instruments that are empowering dentists to make a positive first impression, even with fearful patients.

In 1997, Milestone Scientific launched The Wand™ to a willing audience. The www.dentalentrepreneur.com

Wand uses computer controlled technology to deliver a more comfortable injection. Soon after, DENTSPLY announced the launch of their injection solution— the Comfort Control Syringe™.

Since neither the Wand nor the Comfort Control Syringe achieved a majority market share, other manufacturers continued to conduct research in hopes of finding a more universal solution. Vibraject developed a system which connects to the traditional dental syringe and generates a vibration designed to

Whichever product suits you best, they’re all designed to increase patient comfort, reduce your personal stress and provide a marketing tool for the practice improve the comfort of administering the injection. Accupal developed an instrument designed to make the palatal injection more comfortable.

In 2009, Novalar Pharmaceuticals introduced OraVerse™ developed to reverse the effects of anesthesia, enabling patients to return to their normal routines and standard level of comfort faster.

Recently, a dentist from Boca Raton Florida and NYU graduate introduced one of the most interesting new products to come to market in years. Dr. Steven Goldberg recognized that although he has a passion for practicing dentistry, his least favorite work responsibility was injecting his patients.

“I vividly remember giving my first injection while I was in dental school,” said Goldberg. “The patient in the clinic needed to have some endo work done. As my mind was racing with fear and anxiety, I looked around at my fellow students and they all had the same nervous look and unsure body language. At that moment,

www.dentalentrepreneur.com

I asked one of them, “how do you feel?”

And they said, “I hate this part.”

Seven years ago Dr. Goldberg starting experimenting with different injection techniques and solutions. “I tried the Wand, I tried different topicals, and I was willing to try anything,” said Goldberg.

“Then one day I was thinking about why some dentists would wiggle a patient’s cheek when administering the injection.

Obviously all of them were trying to leverage what we all had learned in dental school about the Gate Pain Control Theory. “ Armed with the clinical research and university studies about the pain gate and understanding that a patient’s brain can only recognize one sensation at a time, Goldberg set out to invent an instrument that would offer patients an anxiety-free experience. The result was the invention of the DentalVibe™ which uses patented VibraPulse™ technology to send a series of pulsing, micro-oscillating vibrations to the patient’s brain, therefore closing the patient’s pain gate. Dentists using the DentalVibe are finding that patients simply don’t feel the needle penetration or pressure from the anesthesia entering the tissue. It seems that Dr. Goldberg and his development team have identified the perfect marriage of science and technology.

Whichever product suits you best, they’re all designed to increase patient comfort, reduce your personal stress and provide a marketing tool for the practice.

So as you build your practice maintain an open mind and consider implementing the injection support instrument that is best for you and your patients. With the proper marketing many of these products can be practice builders.

As you look around your new dental office, you’ll be surrounded by technology, and it’s technology which has forwarded the dentist’s ability to practice dentistry in a far more advanced manner than in the seventies – eighties -nineties or even in the early 2000’s. That syringe you’re using hasn’t changed much in 150 years, yet virtually every other part of the dental office has changed dramatically. The lesson is that it’s not only acceptable to look for better solutions for administering injections, but if you ask your patients,

they will tell you they “expect” you to use technology to improve the overall injection experience.

One of the manufacturers mentioned is offering dentists the opportunity to try their instrument for thirty days risk-free.

DentalVibe wants every dentist to try their instrument in-office and witness the results of a real-time patient experience.

You can find DentalVibe by visiting www. dentalvibe.com.

Remember: your patient’s impression of your injection technique will brand

Remember: your patient’s impression of your injection technique will brand you one way or another you one way or another. I leave you with one of the most interesting statements I’ve heard a dentist make, one that echoes with truth. “If I provide my patient with a pain-free injection experience and the treatment goes as expected, I’m a worldclass dentist. Yet if they experience a painful injection and the treatment process is like a work of art, they leave telling their friends and family that they had a painful experience at the dentist and they’re glad it’s over and they’re dreading the next visit.”

So true my dear readers, but the good news is that the outcome is up to you.

Make a great first impression, it’ll last forever! ■ Scott Mahnken, President of Edge Marketing www.go-to-guru.com is a consultant for the dental industry and member of The Dental Entrepreneur editorial board. Scott has been providing marketing advice for dental manufacturers and dentists since 1994. Scott resides in New Jersey with his spouse Dr. Joy Mahnken and children Lindsey and Courtney.

Scott welcomes your questions and can be reached at www.marketingsupport2010@ gmail.com

Dental Entrepreneur Fall 2010 31

Practice Builders Jane Puskas, D.M.D.

“It’s a Great Profession, So Make the Most of It!”

S

ince the first day you began your studies in dental school, you’ve probably given considerable thought to the profession of dentistry. And, with the recent economic challenges and focus on healthcare reform, you’ve likely been concerned about how this will impact you, your practice, and your future in dentistry.

Dentistry as a profession has been rather fortunate amidst all of the turmoil in healthcare. Somehow, the profession has not been attacked by healthcare reformers.

We Dr. Jane Puskas face economic challenges, as do all businesses today, but we’ve been relatively lucky to be part of such a great profession that can be successful despite various national concerns.

Many dentists, like myself, have chosen to take an active role in organized dentistry in order to preserve this great profession. A majority of dentists choose to be involved in dental organizations and associations from the day they graduate from dental school and are proactive in the practice of dentistry.

It is important to become involved in organized dentistry for a number of reasons. The stronger organized dentistry can be, the better public image we will portray and the greater

32 Fall 2010 Dental Entrepreneur

influence we will have in the future of our great profession. Be active in the American Dental Association (ADA), state and local dental associations. Yes, it costs money to belong to these organizations, but it will be more costly if we cannot practice dentistry as we do today. If you make the investment now, it will pay off down the road.

In addition to becoming a member of ADA and your local and state dental associations, I encourage you to attend dental meetings. It is a necessary business expense to maintain your continuing education (CE), but attending meetings like the Thomas P. Hinman Dental Meeting also offers so much more. Dental meetings can give you the tools you need to be successful in this profession, including: •

The Latest Advancements.

Dental meetings bring together the very latest technologies, practices and products in the industry. Where else can you learn about all of these advancements in one place? You can gain knowledge in hands-on workshops and lectures given by the world’s leading authorities, as well as see them demonstrated by the industry’s foremost experts in an exhibit hall environment. As the profession of dentistry advances, it will be important for you to stay on the leading edge to not only sharpen your skills, but provide your patients the best possible care.

•

Business-Building Tools.

Dental meetings don’t just focus on clinical topics in their course offerings. They also offer courses and educational tracks that are geared for the business of dentistry. Building a successful practice is no easy task, regardless of whether you are just starting out or you’ve been in practice for a number of years. Most dental meetings will offer courses on everything from human resource management and marketing your services to office makeovers and financial management.

•

One-Stop Shopping. Dental meeting exhibit halls can be somewhat overwhelming, but also very valuable. Everything you need to run a practice is represented in an exhibit hall. And, you can touch and feel equipment and products before you buy them. By checking out these items at a meeting, you save valuable time during your office hours. In addition, many exhibiting companies offer show specials where it can be more financially advantageous to make the purchase at the meeting itself.

•

Networking Opportunities.

The largest dental meetings in the country attract more than 20,000 professionals to their meetings and they provide www.dentalentrepreneur.com

numerous opportunities Hinman, provide an orientation Did you know that Dr. Thomas P. Hinman purchased for networking. Attend the luncheon for students designed various events and do your to familiarize them with the CE x-ray technology in 1898 (only three years after it was homework prior to attendprocess, courses, the exhibit hall, discovered) and was among the first dentists in the ing to determine who the convention facilities and netnation to incorporate radiography into his practice? you’d like to meet at the working/social events. meeting. This is a chance By becoming more involved, He demonstrated it to others at dental meetings and to speak with respected you will enjoy the practice of brought experts to the early Hinman meetings to authorities in your areas dentistry even more. After every lecture in the discipline of radiography. of interest or simply meet meeting you attend, you will with your fellow alumreturn to your office with more ni during the meeting. knowledge and more enthusiasm There will be many opportugreat value to attendees. Across a few for the profession than you can imagnities to talk with colleagues days and at minimal cost, you can fuline. Check out the various dental meetand learn from one another. fill your continuing education requireings and make arrangements to attend. ments, shop and purchase needed prodYou won’t regret it.

• Social Events. Most dental ucts and equipment in the exhibit Dental school is a challenging, but meetings host receptions for the hall, and reconnect with colleagues and exciting time in your life. And, it’s various dental school alumni in friends at various events and receptions. just the beginning of what will be their regions. They also provide While there are online CE opportunia gratifying and accomplished career. attendees with various social ties and small seminar courses available Remember how fortunate we are to be events designed to bring togethto you, they don’t deliver the value for dentists ■ er friends and colleagues. The the dollar that a dental meeting profood and beverages are often free vides. Nor do they give you the caliber Dr. Jane Puskas is a practicing dentist in and it’s a chance to have some of expertise that only a meeting that’s Atlanta and a long-time member of the fun, network with others who been doing this for over a century can Hinman Dental Society, currently serving share common interests and give. as Secretary. She also is a member of the enjoy your time away from the It’s not too early to start attending ADA, Georgia Dental Association, Interoffice. If you are married, there either. Dental meetings have special national College of Dentists, American also are social events designed programs, events and incentives for College of Dentists and Pierre Fauchard for spouses that allow them to dental students. They may have speAcademy. Dr. Puskas is a graduate of the have fun as well while you are cial courses geared just for students or Harvard University School of Dental taking courses or visiting the provide free attendance to a variety of Medicine. exhibit hall. courses appropriate for the dental stuMeetings like the Hinman offer a dent. In addition, some meetings, like

Don’t Worry About Your Future...Own It!

The Paragon Progressive Ownership (POP) Plan provides a proven means for a new dentist to gradually enter into a co-ownership relationship with an experienced dentist.

Call Paragon for a personal consultation to see if POP is right for you.

866.898.1867 Visit PARAGON.US.COM to sign up for our free newsletter. www.dentalentrepreneur.com

Dental Entrepreneur Fall 2010 33

Power To Succeed Wes Jankowski

The Key To A Great Practice?

A Great Leader!

I

much more important. It’s not what leaders do that makes them successful; it’s who they are. Leadership is a state of being, a way of operating in life that has others want to follow.

The “Constitution” of a Leader Webster’s Dictionary defines the word “constitution” as “the way in which a thing is made up; the structure, composition or nature of something.”

Thousands of books are published each year on the topic of leadership. Most take a how-to approach, offering strategies and ideas, and provide a checklist of things to do. Although the mechanics of leading people are important and can be learned, the constitution of a leader is actually

Leaders love what they do More accurately, they are passionate about what they do. I watch people choose the dental profession and start a practice because they believe it’s a good career move. They want to make a significant amount of money, support their families, and have control over their lives. They enjoy their work, but it’s just a job—a means to end. Leaders are different; they don’t have a job, they have a cause.

I have a great friend in Wisconsin, a dentist that is totally committed to the care of his patients. He gathered his team and they created a “passion statement” (it’s like a mission statement, but seasoned with emotion) for their practice. They are out to change the face of dentistry in the community. They don’t fake it. They really care, it’s who they are and it shows.

It’s unfortunate that most people don’t honor their oral health at the same level as the rest of their bodies. While they will go to their physician for their annual check-up, they’ll avoid the dentist all together, or at least until they are in pain. This practice focuses every patient interaction on education and showing patients how much they care about their health. Patients can’t help but to commit to their oral health. Consequently, even in a “down-economy,” patient traffic and loyalty significantly exceed norms across

magine your ideal practice - a productive, efficient environment where every member of your team thinks and operates like your partner, not just an employee. A practice where the team takes an active role in setting goals and the personal responsibility/accountability for achieving those goals on a daily, weekly, monthly and yearly basis. Imagine a practice where systems are executed Wes Jankowski consistently and with a commitment to detail and excellence.

And imagine a practice that runs smoothly without the daily stresses of staff conflicts and drama.

If you check in with most practicing dentists, this sounds like a pipe-dream.

But there are those “successful” practices around the country. So what’s the difference? Leadership!

The success of the practice will be ultimately be determined by the strength of the leader.

34 Fall 2010 Dental Entrepreneur

the country and the majority of their new patients come by way of referrals. This has also translated into massive financial returns for the doctor and the team.

Leaders Have a Contagious Attitude – One That’s Worth Catching A leader understands that they set the tone for the organization. We’ve all heard that our attitudes and core beliefs are “keys” to our success or failure. Earl Nightingale, often referred to as the Father of Personal Development, is quoted as saying the most important word in the English language is “attitude.” And study after study has concluded that how we think about things governs our actions (or inactions), which in turn, dictate our results.

Employee/employer relationships are in a sad state in so many practices today. The dentist comes in each morning grumpy and complaining about everything from the economy and the insurance companies to patients that won’t accept treatment. That same doctor then complains about the “bad attitudes” and poor performance of his team members. The team will always be a reflection of the leadership of the practice.

Take the high road. Your team is always watching to see how you handle the adversities of life. When things go wrong, do you rally the team and look for solutions in a positive, constructive way? Or are you an emotional time bomb, placing blame and condemning people and their performance? I understand that you have the Position of Influence and your team (you could put the word “family” in as www.dentalentrepreneur.com

well) follows “because they have to.” But, real influence is a matter of Permission and your team follows “because they want to.”

Leaders Build People & Outstanding Teams John C. Maxwell, in his book, The 21 Irrefutable Laws of Leadership says, “You can lose with good players, but you cannot win without them. When it comes to having good people on a team, you really only have two choices; train them or trade for them. You grow the people you already have to be champions, or you go out and recruit championship-caliber people and bring them on to the team.”

This quote really sums it up! So many practices hire to fill a position instead of choosing and grooming the right person for the team. Compare your practice to a basketball team. You are out to win a Championship. You only get 5-players on the floor (and no extras on the bench).

Why would you invest your hard earned money and risk the championship on anyone less than extraordinary for your team?

Leaders have high expectations for themselves and the people that work for them. They effectively communicate their expectations and let team members know they are counting on them.

Accountability and respect are ingrained in the organization. Performance reviews (or growth conferences) are used as planning sessions to further develop team members both at a personal and professional level.

Leaders know that if they build the people the people will build the business.

Leaders Take Personal Responsibility The buck stops here! Leaders trust their team members and are willing to delegate, but they do not abdicate their ultimate responsibility of the success of the practice.

Most of the problems people experience in life occur because they fail to take responsibility. Instead, they are quick to blame others, circumstances and conditions. When we allow someone or somewww.dentalentrepreneur.com

thing else to become responsible for us, we give up the power to make decisions about our own lives, and to control our destiny.

Leaders are not deterred by the current conditions of the business world. They have a definite vision for their organization and a clear, concise definition of their perfect client/patient. They’ve taken the time to articulate their UMP (Unique Market Position). They’ve identified the group of consumers they are going to serve and are committed to being the best at delivering value to that specific market.

They are not going to be everything to everybody. They know where they are going and that they will get there.

Leaders take responsibility for all areas of their practice. They know that showing up is not enough; success is a matter of practice and honing the skills. They are clear that success is synonymous with sacrifice. It means not cutting corners and giving a full effort. It means staying the course and going the extra mile.

Your Ideal Practice – Make it Happen!

“To have long term success as a coach or in any position of leadership, you have to be obsessed in some way.” Pat Riley Leadership is not complicated. It does not require super-genius intelligence, rock-star charisma, or an iron fist. It does, however, require a commitment to a vision and a passion for people. People want to be part of something great.

They’re just waiting for someone to take them there.

LEAD! ■

Wes Jankowski is a business strategist and Founder/CEO of StraightLine Professional Development - providing business, leadership, and team-building skills training for dental practices.

For more information about the company and services go to http://www.straightlineprodev.com

Please reach out to our advertisers They care about you and keep us in print!!

“Success” cont. from page 5

want the features of our services…they want the benefits. They don’t want the “steak”…they want the “sizzle.” Use your marketing to tap into those EMOTIONS, and you’ll see demand for your services skyrocket!

Put It All Together…

So there you have it. Ask yourself today: “In what condition are the three supporting legs of MY stool? Are they the same length? Are they the SAME length?

If I rest my practice on this stool, would it stand tall and balanced, or would it topple over?”

Aim your focus equally on EACH of these three components of your practice, track your progress, and you’ll begin to experience IMMEDIATE gains. Keep it up and watch your practice flourish beyond your wildest dreams! ■ Dr. Chris Bowman is a full-time practicing dentist, speaker, author, and “dental success coach.” Based in Charlotte, NC, he is the founder of Dental Insiders Alliance, a monthly membership program dedicated to helping dentists achieve maximum success and satisfaction in their profession. For more information on Dental Insiders Alliance, go to www.DentalInsiders.com.

Dental Entrepreneur Fall 2010 35

Dental Trade Shows California Dental Association – Fall Session September 9–11, 2010 San Francisco, CA

Yankee Dental Congress January 27-29, 2011 Boston, MA

American Dental Association October 9–12, 2010 Orlando, FL

Chicago Mid Winter Meeting February 24-26, 2011 Chicago, IL

Holiday Dental Conference November 18–21, 2010 Charlotte, NC

Hinman Dental Meeting March 24-26, 2011 Atlanta, GA

Greater NY Dental Meeting November 26 – December 1, 2010 New York, NY

California Dental Association – Spring Session May 13-16, 2011 Anaheim, CA

Index of Advertisers ADA Insurance Plans.............................................................................................................. Back cover ADS South..........................................................................................................................................5 ADS Transition Specialists...................................................................................................................25 ADCPA……………………………………....Resource Guide Listing.............................................................8 The Artist Evolution LLC......................................................................................................................21 Henry Schein (PPT)....................................................................................................... Inside back cover Lightspeed........................................................................................................................................17 MacPractice......................................................................................................................................19 Medical Protective.............................................................................................................................23 Oxyfresh............................................................................................................................................27 Paragon............................................................................................................................................33 Patterson.................................................................................................... Inside front cover and page 1 Proctor & Gamble................................................................................................................................9 Scottsdale Center for Dentistry............................................................................................................29 US Army...........................................................................................................................................11 36 Fall 2010 Dental Entrepreneur

www.dentalentrepreneur.com

Henry Schein Professional Practice Transitions (PPT) Henry Schein PPT’s experienced transition consultants provide expert guidance for today’s practitioner.

PPT is the nationwide team you want on your side when you decide to pursue your professional goals. We will support you through all the complexities of a transaction to ensure a smooth transition—always with your best interests in mind.

• Appraisals • Practice sales and purchases • Associateships, partnerships, and mergers • Retirement planning • Business structure consulting

1-800-730-8883 Henry Schein Financial Services is not a bank, does not represent itself as such, and does not conduct banking activities. © 2010 Henry Schein, Inc. No copying without permission. Not responsible for typographical errors.

or e-mail: ppt@henryschein.com www.henryschein.com/ppt

Your patients need you.

Your colleagues need you.

Your family needs you.

Still think you’re in this for yourself?

From dental school through retirement, ADA Insurance Plans protects you and those who count on you. All of our insurance plans feature a set of benefits and options that support the unique needs, challenges, and goals of dentists.

Plus as a member, you’ll find comprehensive coverage at exceptionally low premiums. Our insurance experts work only with dentists and are ready to support you with objective guidance and information.

For more information call 888-463-4545, email ada@gwl.com, or visit www.insurance.ada.org.

Benefits provided under respective Group Policy Nos. (104TLP Term Life, 1105GDH-IPP Disability Income Protection, 1108GDH-SDP Student Disability, 1106GDH OEP Office Overhead Expense Disability, 104GUL Universal Life, and 1107GH-MCP MedCASHSM) issued to the American Dental Association; underwritten and administered by Great-West Life & Annuity Insurance Company and filed in accordance with and governed by Illinois law. Coverage available to all eligible ADA members residing in any U.S. state or territory. Term Life, Universal Life and MedCASH premiums increase annually, Income Protection every 5 years and Office Overhead Expense every 10 years. Premium credit discount not guaranteed but reevaluated annually. ©2010 Great-West Life & Annuity Insurance Company. The inverse boomerang logo is a registered trademark of Great-West Life & Annuity Insurance Company.

All Rights Reserved. This material is an outline only and not a contract.

NDAD10-DE

Protecting the practice—and the life—you’ve built. Life • Disability • Business Overhead • Hospital & Critical Illness