In my previous post, It’s Your Practice and It’s Your Business, I asked you to step outside of your role as the Doctor and into your role as CEO. I urged you to employ the concept of Ruthless Honesty when assessing the daily operations of your practice. I assume you’ve done your homework. So now let’s look at how to go from good to great!
I often get called in to a practice when the dentist is at his maximum stress level. The question is always the same, “What are we doing wrong?” Usually, it’s not that they’re doing anything wrong (the practice has a dedicated staff, is delivering quality care, is getting new patients, and patients are accepting treatment), it’s just that they’re not getting the results they want. A better leadership question would be, “what do we need to do to maximize our results in every aspect of our practice?” Seth Godin (author of the Purple Cow) calls it a “Relentless Pursuit of Better” and Jay Abraham (business performance expert) calls it “Optimization.” Whatever you call it, it’s the mind-set that takes practices from mediocrity to massive-success.
Every World-Class Company Has a Formal, Written Business Plan – Where’s Your?
Dentists often say to me, “It’s a dental office. We provide dentistry to whoever needs it. Why do I need a formal business plan (mission/vision/objectives/etc.)?” It’s a valid question. But again, it’s the wrong one. The plan is not just for you, it’s for your team.
“If you don’t know where you’re going, you’ll end up somewhere else.” Yogi Berra
There was a terrific article in INC Magazine a few years ago entitled “Creating a Company Vision.” I use this article with all new clients to get them to see the practice they want to build.
In the article, the author describes a restaurant in Michigan that wrote a four-paragraph story detailing what they wanted their business to be. They used descriptive language to help potential patrons envision what it would be like to interface with their business.
We have to paint that same kind of picture for our patients and our staff. We have to let them know what we want our practice to look like and where we’d like it to go.
There are only 3-Ways to Build Your Practice (or any business)
Next, be it a hair salon, a fast-food restaurant, or a dental practice, there are only three ways to grow any business, 1) increase the number of customers (we call them patients), 2) increase the unit of sale/average unit of purchase (we call it treatment acceptance), or 3) increase the frequency of purchases (we call it hygiene and restorative appointments). Increase any one category and you grow the practice geometrically. An increase in any combination and you grow the practice exponentially. It doesn’t take big changes to generate big results.
Focus on how to leverage every asset in the practice, not just the equipment assets on books, but human capital as well (every new patient marketing response/phone call, patient relationship, employee, supplier, etc.). Most practices work on minimizing, saving money and cutting expenses. The objective is to find ways to get the maximum yield, with the least investment, for the longest period of time from every aspect of the practice.
What Gets Measured Improves
If you have a goal of getting control of your personal finances, the first thing every book, CD, counselor, workshop, etc. will tell you is to get a little notebook and track every expense (a coffee, candy bar, gas, a hamburger; everything) for at least a month. Most people have no idea of where their money (or more likely, their credit) is going. This one exercise is an eye-opener. Now they have accurate data and can see ways to better manage their financial resources.
Dental practices are much the same in that they don’t track their KPI (Key Performance Indicators) granularly enough to really understand what’s going on in their business. It’s all based on their “gut” feelings.
Kellogg Business School conducted a productivity study (1978 -1980) with Dentists. Kellogg informed the dentists that through this study they would double their productivity within 12-months. They asked the dentists to track specific information about how much time they spent with a patient and the amount of money generated for each procedure. Within the first quarter, the 40-practices in the study showed approximately 34% increase in their monthly productivity and by the end of the first year, productivity in every practice had more than doubled. The doctors were seeing increases and they hadn’t even made any changes yet. The mere fact that they were tracking at a granular level allowed them to see things about their business they didn’t know before; they inadvertently operated differently.
Every practice tracks the big (easy) stuff, like production, collections, and new patients, but what about the other metrics that have a major impact on your business like treatment acceptance by provider, patient next visit pre-appoints, and new patient acquisition cost & value of a new patient?
So, in which area would you like to see massive growth in the next 60-90 days? Share your goal in the comments area, below.
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