Issue 12 / May 2014
Lack Of New Patients
7connections .com
The X–Woman
The Moment Of Truth
Lack Of Team Trust
What Is A Dental Entrepreneur?
The Female Principal Part 3.
An old definition in customer service.
Are they watching your back?
True dental entrepreneurs
Letter From The Editor A note to Principals:
Its all about CHANGE.
There will come a day when you decide it is time to sell your practice.
A note to Associates:
Michael Gerber would argue that “the purpose of a business is to solve somebody else’s problem, the objective of a business is to make a profit and prepare the business for sale.” After all, you will finally exit your business for the very last time one day – the only choice is whether you:
The Stakeholder Associate – a new form of succession planning?
•
Exit on a high note with a celebration and a handsome payment
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Exit on a low note with a closure
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Exit on a stretcher carried by para-medics
Sadly, I meet too many Principals who are heading for the last of those options, either because they have no exit strategy and/or they have their heads in the sand. Traditionally, the questions I am asked by those who are considering a sale are: •
What is the business worth?
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Should I sell to a corporate or an individual?
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How long is this likely to take?
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What should I be doing to polish the silver ready for the salet?
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What questions should I be asking the purchaser?
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How do I legitimately minimize my tax liabilities?
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How and when do I break the news to the clinicians and the team?
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How do I stop the fee-earners leaving?
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Will it be possible for me to stay on as an associate or…
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Can I escape straight away?
So the whole event is seen as a once in a lifetime experience with new personalities arriving from all directions and a complete change of “scenery”.
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There may well come a day when you decide that you want to own your own practice. Michael Gerber would argue that you will suffer from an “entrepreneurial seizure” and will soon be able say “I’m self-employed, I work for a lunatic – and the lunatic is me.” After all, you probably cannot take another day of somebody else’s brand standards and core values. You are sick of biting your lip – and want to fly your own kite, sail your own ship, do your own thing. You have probably decided that associateship is a reasonable source of income but cannot create capital – and so you want the long-term benefits of goodwill value and freehold property inflation. Traditionally, the questions I am asked by those considering ownership are: •
Should I open my own squat or buy an existing practice?
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NHS, mixed or private?
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Is the location I have in mind realistic?
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How much money would it take to get a squat off the runway – and how long will it take to become profitable?
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Where and how do I raise the funds?
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What should I be looking for – number of surgeries?
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How do I negotiate the purchase?
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How will I recognise skeletons in cupboards and bodies buried in the garden?
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Will the existing team accept me?
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What do I do if I want to bring my own new team members in?
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What are the historic accounts telling me?
So the whole event is seen as a once in a lifetime experience with new personalities arriving from all directions and a complete change of “scenery”.
Its all about CHANGE. A note to Associates and Principals: It doesn’t have to be like that. The incorporation of dental practices provides many alternatives to the traditional route outlined above.
Slowly I am beginning to see some Principals who are taking a different view: •
•
I don’t want to surrender my core values in exchange for a cheque from a corporate
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I like the idea of continuity in patient care and team leadership
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I intend to keep living around here and want to be able to socialize locally without embarrassment or stigma
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I would love to mentor associates for ownership over a period of years
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I am happy to bring senior managers into the capital pool to give them skin in the game – maybe even employees through a share-ownership plan
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If I can take advantage of tax-allowances at the same time, I’m interested
Consider the legal and accountancy professions. It is not unusual to see junior partners in professional practices, who are forgoing part of their income each year in order to build a capital account in the practice. This capital account accumulates over a period of years and, as the years pass, the junior partner may well achieve higher ranking in the firm (with more privileges). Eventually, there comes a day when a senior partner announces his/her retirement. Capital accounts are relinquished to provide the retiring partner with funds. The once junior partners are now promoted to senior partners (with more privileges) and take the equity stake in the firm that the retiree has exchanged for cash. Imagine, if you will, partners ascending an escalator – juniors at the bottom, seniors at the top – and the escalator rolls on and on for years. It is a succession model that has worked successfully for years in the professions, including some healthcare practices. Why not in dentistry?
I want to realise some capital from the business but it doesn’t have to be an “all or nothing” process and can be spread over time
For those who wish to survive and thrive in the new marketplace, I call for innovation in ownership.
It’s all about STABILITY.
Its all about STABILITY. As a business coach, my frustration is the slowness of take-up on this idea and also my inability to do much about that. Ultimately, it is the specialty of accountants and lawyers.
Contents
I would love to see one of the dental accountancy firms create a reputation for advising on this concept and providing a packaged solution for those interested.
01 - The Stakeholder Associate 03 - The X-Woman
Is it because of the historic legal ban on incorporation?
There are some who might disagree as they have a commercial interest in practices changing hands for large lump sums.
04 - The Moment Of Truth
Or is a mind-set established back at dental school, that the Principal is almost always a Lone Ranger, keeping himself to himself, never sharing and afraid of open-ended partnerships?
My prediction is that, over the years ahead, the goodwill market will continue to be overheated as the bigger players compete against each other.
07 - Lack Of Team Trust
The territorial wars between corporates are having an unsettling effect on the market and the number of independents will further reduce.
05 - Lack Of New Patients
08 - What Michaelangelo and Slartibartfast can teach you 09 - So What Exactly Is A Dental Entrepreneur?
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The Female Principal Part 3
Written by Chris Barrow
The Quest Recognise that the reason you are doing this is that you are alive when you are on a quest. It’s the way you are wired – it’s in your DNA – and it’s incurable. There is a problem with “quest” people. As soon as they have completed the latest challenge, they get bored very quickly. The quest might be:
to purchase the first practice
to open a squat
to buy-in to an existing practice
to relocate
to win an award
to complete a post-graduate qualification
to hit a certain financial target
On the quest – you are on fire. No matter how many hours, how many arguments, how many tears – the quest is the quest – and it must be completed. Energy appears from hitherto untapped reservoirs, resilience is strong, determination is absolute. Nothing will stop you – nothing does. Then – you cut the ribbon, you open the doors, you win the award, you qualify, you cross the finish line. There is a short period of celebration, followed by the slowly accumulating feelings of emptiness. Is that it? Now that I have my practice, badge, trophy – is that it? You see the challenge for the “questers” is that when we are not on a quest we are lost.
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Until the next quest comes along.
So what is your next quest going to be?
Male questers have a very clever way of dealing with this.
Make a plan NOW for the next 3 years.
We screw up the thing that we have created – so that we can get busy repairing it – the quest becomes the recovery. Fortunately (and yet ominously), few women in business are that stupid and have that sense of “protecting the nest” that prevents them from going through regular phases of either self-harm or creative destruction. The solution here is to always have the next quest ready and waiting in the wings. DO NOT kid yourself into thinking that when you have purchased, opened, moved, won – that you will be happy to settle down into years of consolidation and growth. It’s not going to happen. Your mind will see that as stagnation and the gremlins will begin to eat away at your self-confidence.
*An excerpt from The Female Principal manuscript by Chris Barrow – to be published as an ebook later in 2014
...always have the next quest ready and waiting in the wings.
The Moment Of Truth I was reminded last Monday evening of an old definition in customer service.
“A moment of truth is a moment of delight or disappointment that has a disproportionate effect on the recipient”. Arriving at The Dawson Hotel in Dublin at 21:00 and after a 16-hour working day, I offered my name AND a booking reference for a pre-paid room, to be told that I “wasn’t listed on the computer”.
written by Chris Barrow
Multiply those numbers by 150 each and you are about there IMHO. Three questions for you to think about… •
Do you have a system to stop disappointment before it happens?
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Do you empower your team to provide a delightful antidote when disappointment does happen?
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Do you simply delight?
Had I not been so tired and already late for a client dinner, I would perhaps have seen the Little Britain funny side of this.
MOTs are taking place in your organisation every day.
I didn’t.
Don’t give people the opportunity to share disappointment, create episodes of delight.
This is where my years of personal coaching kicked in, as I called Phillippa on my mobile and handed the iPhone to the receptionist. My trusty personal assistant solved the problem, the booking was found and the room allocated. But the damage was done. Tired, irritated and late. Then, a moment of delight, as the receptionist informed me that she would offer me a complimentary upgrade to a junior suite as an apology for the delay. She used her initiative in a positive way and, on opening the door to the suite, I actually uttered a wow! (Some of you will have seen the room photo on Facebook). So, in the space of a few minutes, two MOTs, one positive, one negative.
...a moment of delight, as the receptionist informed me that she would offer me a complimentary upgrade to a junior suite as an apology.
I suggest that our businesses can deliver MOTs all day and that we often have no idea which variety they are. By the way, research suggests that a delightful MOT will be shared less frequently than a disappointing one. In the good old days it was thought that delight was shared with 4 others and disappointment with 11. That was before social media and the connected economy.
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Pain Points In Dentistry – #4 Lack of New Patients
Written by Chris Barrow
Across
the 40-50 practices I work with every year, the average new patient spend is £1,500 – £1,750 (remember that is an average). The average spend per existing patient in the same practices is between £250 – £400 per annum. Every now and then an existing patient may need or want some more expensive treatment. There may be some event in their life that triggers a conversation on smile enhancement, or, as they grow older, they simply need more functional repair. To rely on those existing patients to make up the numbers is a dangerous tactic. Commonly, I see the following problems: •
no systematic approach to identifying existing patient emotional triggers, thus losing the opportunity to up-sell;
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poor new patient marketing, resulting in lower numbers then necessary to thrive;
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new patients diverted to associates (who, on average, have less welldeveloped communication skills and so achieve a much lower new patient average spend);
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a Principal who is drowning in checkups, doesn’t have the time to see new patients – and when she does, doesn’t have the time to identify the emotional triggers, establish the desire and demonstrate the outcome.
Your practice cannot grow without new patients – the benchmarks to prosper are: 20 new patient consultations per month PER FULL-TIME DENTAL SURGERY; •
20 new patient consultations per month PER FULL-TIME DENTAL SURGERY;
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a 66% conversion rate on telephone enquiries to free assessments with a TCO;
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a 66% conversion rate on free TCO assessments to paid dental consults;
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•
a 66% conversion rate on paid dental consults to treatment taken up.
So, for every 100 new patient enquiries by telephone: •
66 attend a 45-minute free assessment with a TCO (including a dentist pop-in);
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43 proceed to a paid dental consult;
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28 proceed to treatment (over a period of time)
And with an average spend of £1,500 per patient, that represents an extra £42,000 of gross revenue per month into your business. You can pro-rate the numbers according to the number of surgeries you operate. Think of it another way….. Every new patient enquiry at the telephony stage generates £42,000/100 = £420.00 of gross revenue. That’s the average value of EVERY call (in this example) no matter if the call succeeds or not.
Question 1 – If I could guarantee you £420.00 for every potential new patient who called your practice, whether or not they came to see you – how much would you pay me for each of those calls? Question 2 – If you knew that every call was worth £420.00, how many calls would you buy?
Question 3 – how well would you train, coach and mentor your telephony team to hit their 66% target? Question 4 – how well would you train your TCO to hit her 66% target? Question 5 – how well would you invest in your own communication skills to hit your 66% target? Trying to survive on a long-standing patient base is like standing around and doing nothing, even though you know you have progressive renal failure. New patients are a daily blood transfusion into your business, highly oxygenated new blood that will stimulate every other function in the body of your business. A business coach will show you how to answer every one of the 5 questions above, facilitate the training – and help you to make sure that the initial enquiries occur as a result of your marketing plan. To read our previous blog, “Pain Points In Dentistry – #3 Lack of Growth”, click here.
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Pain Points In Dentistry – #5 Lack of Team Trust
written by Chris Barrow
When
we trust another person or an organisation, we RELY on them to: •
show up on time
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finish what they start
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say “please” and “thank you”
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come through on their promises and
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follow The Golden Rule and do unto others as they would have others do unto themselves
Its about knowing that they are watching your back and that you don’t have to watch yours. Trust exists in three incarnations: 1.
by following all of the above rules over a long time period;
2.
by “third-party trust” – I am recommending this person to you because they have followed the rules with me for a long time
3.
Intuitively – in the first nanosecond when you meet a person – and your instinct tells you that you like them (or otherwise)
Men, by the way, are absolutely crap at the 3rd – their instinct says “no” and then they are bedazzled by money, status, power, greed, desperation, impatience into associating with people who bring them down (let me tell about it). Women are much better at the intuition thing – but women in business sometimes think they have to act like a man – and screw up.
Its about knowing that they are watching your back and that you don’t have to watch yours.
Building trust in a dental team is essential – because the absence of trust between any of the people in the team can be a serious virus in the machine – it has been a constant source of trial and tribulation for practice owners over my years in the profession.
They are all symptomatic of the same malaise: •
People who don’t trust you because you are not trustworthy – in which case you are not fit to own a business or
Having said that, how often does the presence of an untrustworthy team member go on for long periods of time, left to fester through apathy or fear of the consequences?
•
People who you don’t trust and who shouldn’t be working for you
Problems in dental teams are almost always caused by people whose performance and behaviour is tolerated by the owner and colleagues – often through fear of employment law consequences if any action is taken. •
The associate who believes that BDS spells God
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The travelling specialist who never follows your brand standards
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The practice manager who will not embrace change
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The staff room gossip who shares secrets with one person at a time
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The well-poisoner who attends meetings, contributes nothing and disses the meeting at the pub
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The receptionist who doesn’t believe in private dentistry
Numerous other examples abound of course.
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In the first case – sort yourself out. In the second case – get rid. You cannot teach trust, run training courses on trust, manage people into trustworthiness. But you can decide never to tolerate untrustworthiness in the people around you. A business coach can help you take a look in the mirror and decide whether you need to work on yourself or execute a cull.
What Michaelangelo and Slartibartfast can teach you Did Michaelangelo paint the Sistine Chapel on his own?
Here’s what a Google search reveals: “He absolutely did not work on the Sistine Chapel alone. He had a team, probably of students and/or lesser local painters (yet whose craftsmanship Michelangelo trusted) and he most likely designed the entire concept, and then farmed out the smaller work parts (e.g. the animals, or the angels’ feathers or the monsters, or certain aspects of the flora and fauna etc etc) to these artists. That would explain why all the parts fit into one design but within the painting you can see more than one painting technique at work. For example, the angels’ eyes are all done differently, almost like a different technique was applied to a different cluster or group. There’s a lot of that going on in the Sistine Chapel painting. In fact, many great works of art were not done completely alone. There are music scores from the great composers where, for example, a background chorus in an opera is simply written out with the soprano and bass, and the alto and tenor are filled in using standard counterpoint and voice leading rules by copyists and/or students. Sometimes the menial work in a great work of art is done by the accredited artist, but often it is assigned to students who warrant the artist’s trust. (Ed: my caps) That is almost certainly the case with the Sistine Chapel painting. However, none of this is to diminish the greatness of Michelangelo’s work. You can think of it as ‘team Michelangelo’ if you prefer. He still gets the credit.” Who is Slartibartfast – and what has he to do with this? Arthur Dent: The Earth! Slartibartfast: Well, the Earth Mark II, in fact. We’re making a copy from our original blueprints. Arthur Dent: Are you telling me you originally made the Earth? Slartibartfast: Oh, yes. Did you ever go to a place – I think it was called Norway?
Arthur Dent: No. No, I didn’t. Slartibartfast: Pity. That was one of mine. Won an award, you know. Lovely crinkly edges. The Hitchhikers Guide to the Galaxy 1981 – Douglas Adams As I travel around the UK, Ireland and Luxembourg (soon to add Romania to that list) I observe that the most profitable dental Principals (and some of the most fulfilled) are those who have adopted a similar approach to their clinical work. Those who struggle are usually drowning in a world of check ups. “I’ve always looked after the patients and they expect to see me when they visit. If I tell them they have been demoted to another dentist or a therapist, they will walk.” Those who thrive are usually: •
seeing all the new patients and triaging them (sometime with the help of a TCO)
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focusing their own clinical activity of higher value and more complex treatment
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working with some of their associates as para-dentists to complete treatment plans
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working on a “pop-in” basis with their hygiene/therapy team to provide ongoing care and preventative maintenance
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ensuring that existing patients are introduced to a new brand standard for the practice over a couple of recall cycles, encouraging the patients to see the benefits of working with other professional in the practice
written by Chris Barrow
Guess what? It doesn’t work all the time – there are those who will stand their ground in the patient list. But the majority do – when the language you use to explain the change has been carefully crafted. The benefit to you as owner is a more profitable day, seeing far fewer patients but engaging in more interesting dentistry. The benefits to the patient can include lower costs for maintenance, shorter waiting lists and the chance to be on the receiving end of your best work. Wether you are pairing a chapel, making a planet of creating a beautiful new smile – you need to focus on the bits that you are uniquely good at. You will need to create your own “Team Michaelangelo” to do that.
So – if you don’t see the new patients yourself, if you don’t have a TCO to partner with and if you don’t have para-dentists as well as associates and therapists in your team – the chances are you will not be as profitable as the more modern practice owner. At &connections we have worked with many practices in training the team and educating the patients to accept new methods of delivery. 08
So What Exactly Is A Dental Entrepreneur?
Michael Gerber would have us
believe that:
- A “technician”is a dentist who wants to focus 100% on clinical expertise - A “manager”is a dentist who wants to do dentistry and manage other dentists - An “entrepreneur”is a dentist who has stopped all clinical work and focused on business building The reality is almost always an overlap of these three areas, part of each during the week. In fact, many of my clients are simultaneously “technicians”, “managers”, ‘entrepreneurs”, “landlords”and “investors”in their own business – no wonder they are stressed.
And nowadays, some of the most active entrepreneurs in dentistry are not dentists: - Sam Waley-Cohen – Portman Healthcare - Emmet O’Neill – Smiles Dental (now Oasis) - Lisa Riley – Centre for Dentistry (Sainsbury) - Mustafa Mohamed – Genix Healthcare Frequently, I work with clients who tell me that past of their vision of a “bigger future”is to own additional practices. To build a little empire that has satellite practices, possibly feeding internal referrals to a “centre of excellence”(i.e. their existing practice). However, I think I’ve spotted a flaw in their thinking (and, previously, in mine) – on which I want to elaborate here.
There have been very few true dental entrepreneurs (by the above definition) in my 21 years:
You see, the perceived thinking in business is that to launch a venture, you need three assets:
- Malcolm Williams – Oasis
The Time
- James Hull – JHA
The Money
- David Hudaly – IDH
The People
- Amrik Bhandal – Bhandal Group
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...many of my clients are simultaneously “technicians”, “managers”, ‘entrepreneurs”, “landlords”and “investors” in their own business – no wonder they are stressed.
written by Chris Barrow
But when I am approached by clients and contacts who are keen to expand, they always present to me A LOCATION.
You don’t get to find the cupboard full of skeletons until after you have completed the purchase.
“Chris – here is a practice for sale/location that might be suitable for a squat – what do
I’m suggesting a real reversal of thinking here.
you think?”
And what usually happens next is a detailed conversation about: - The existing financials - The building - The overall location - The parking - The existing team - The number of patients on plan - The state of the equipment and general areas - The likelihood of supervised neglect - The existing fee-earners - The existing NHS contract and so it goes on. But – a big but – I never seem to get a good answer to the question: “Who is going to run this satellite on a day to day basis?” Without exception: - The Principal is up to his or her neck in being a “technician”, “manager”and “entrepreneur”in their own practice - They are already working too many hours - The management team (or individual practice manager) in your existing practice are maxed out and don’t know how to turnaround a new/old business - Inadequate investment is planned for branding and marketing – all the money is going in the purchase and clinical refurbishment And the biggest problem of all when you buy an existing practice?
I want to re-introduce a concept we have touched on before. The stake-holder associate. Here’s my belief. Don’t ask me to help you find a practice to open or buy. Ask me to find a young dentist who has the X-factor for ownership and would be prepared to raise the capital to part-purchase/open the satellite with you and work there 5 days a week – so that the cat is always in the building and the mice can never play.
- Route 4 – broadcast on social media (yours, mine, anyone else we know in dentistry) Looking for people is much harder then looking for locations – but if you find the right people, the locations, the time and the money will follow – and you get to keep your life in balance.
I believe it’s worth the hardship in the short term, for the long term payback.
I know – finding associates with the X-factor is all haystacks and needles – or, to put it another way – you are going to have to kiss a lot of frogs. But I believe it’s worth the hardship in the short term, for the long term payback. Imagine owning a centre of excellence, fed by 10 satellites owned by up to 10 stakeholder associates, who each own up to 49% of the practice they work in. That way – you both have skin in the game and things will get done. So I’m going to suggest that the definition of a dental entrepreneur is a a “technician”who is looking for the right PEOPLE, not the right PRACTICE. You can’t call a sales agent and ask for a list of right people, so: - Route 1 – identify a candidate via local market intelligence and networking – and approach to head hunt - Route 2 – advertise locally via Gumtree and local jobs boards - Route 3 – engage local dental reps to feed you with knowledge for head hunting
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