Issue 5 / Oct 2013
People And Profit: You Can’t Do It all By Yourself 7connections .com
How To Waste Money On Training
Visualising 2023
How To Train Your Team
The Experience
Can you take one driving lesson and pass fisrt time?
Take a look at what UK dentistry might look like in 2023.
Without damaging your cash flow
Providing a remark-able patient EXPERIENCE
Letter From The Editor A client recently sent me details of a
practice for sale on the following terms: •
Gross turnover (mainly NHS) - £1.2m
•
Valuation of goodwill plus fixtures and fittings - £1.8m, plus a property at freehold valuation
Said prospectus arrived from independent valuers, expressing excitement at this bargain – not to be missed! So - for the first time, I’m seeing a practice valued at 144% of gross.
When is the bubble going to burst?
Contrast that with one of my first clients who happily sold a similar practice back in 1998 – at 35% of gross. It begs the questions: •
Where is the top?
•
How long can it last?
•
What happens next?
The evidence of economic history is that markets expand until they reach a critical point - then contract – and that this cycle repeats over varying time periods. Boom and bust you might say? Back in the glorious summer of 2008, we all thought that 100% gross was an all time high and then along came the August banking collapse and a gradual decline of valuations back to around 75%. By 2011, we were heading steadfastly back in the direction of 100% and many pundits thought that might be a ceiling – but the glass has now shattered again and we are heading even higher. An economist might argue that all of these “percentages of gross” are foolish and that what really matters is the price/earnings ratio. In the good old days, we argued that a good practice could generate a 25% EBITDA and so paying 4 times earnings was a reasonable proposition. The corporates played a clever game of stock market roulette – “we buy at 4 times earnings
01
but the market values our (bigger) business at 8 times earnings – so every time we make a purchase we make a 100% balance sheet asset value return.” In this particular casino banking activity, the winner is the corporate that cashes in their chips (sell to the next gambler) before the odds change and the winnings evaporate – some get it right and others very wrong. UK dentistry has examples of both. You would have thought that the lessons learned in the post-2008 environment might have promoted a change of behavior – it seems not. The corporate land-grab continues unabated, fuelling this latest round in the game. “Madame’s et Messieurs, please place your bets” By the way – it is a game of chance. Nobody ever cashed in their chips because they knew it was the right time to do it. The casino always wins. The individual punter simply got lucky. The remarkable advantage that the corporates have in playing this game is lack of accountability. If they lose their chips, some accountant walks in and changes the columns on the balance sheet. Vast amounts are “written off”, everyone goes to a City or West End wine bar that evening, drowns their sorrows, toasts the hapless shareholder or investor who foolishly entrusted them with their money – and the
written by Chris Barrow
“ a stockbroker is someone who invests your money until its all gone”. -Woody Allen
next day they return to their tables (Xmas bonuses secured) and start to play the game again with a fresh set of chips.
They compete with the corporates on price, entering the game with innocence in a room of ruthless experience.
Contents
As Woody Allen famously said: “a stockbroker is someone who invests your money until its all gone”.
Too many of them are calling people like me, a few years later, asking us to help them sort out a financial mess with no resources to invest.
04 - Visualising 2023
My concern is that in the independent sector you cannot “write off” your losses quite so easily. So – if the corporates want to pay stupid prices – let them. We can complain about casino economics and the toothless financial services regulators but it doesn’t really affect “us”. What happens though – when an inexperienced individual dentist turns up at the table with a few painfully collected chips and starts to play with the big boys? He\she “places their bet” and discovers (too late) that they own a business incapable of providing them with an adequate return on investment? As a business coach I meet these people all the time. They are frequently young and often funded by family money or a loan made by an avaricious bank trying to build market share.
When I saw this valuation a few mornings ago – I realised that we may be nearing the point at which the bubble bursts, market values contract and good folks lose their shirts. Is that an opportunity or a threat?
03 - How To Waste Money On Training
05 - People and Profit 06 - The Answer to delivering the best patient experience 07 - How to train your team 09 - The Experience 10 - A Milestone For Bridge2Aid
It depends, I suppose, whether your chips are on the table or you are just spectating and waiting for the right time to enter the game. My advice right now if you are buying? Keep your chips in your pocket – and think very carefully about whether you really are the gambling type. My advice if you are selling? Take the money and run.
They think that “ownership” is the next step on an ego-ladder, after post-graduate education. They don’t perform detailed due diligence before making an offer. They don’t understand the economics of the business of dentistry.
02
How To Waste Money On Training
written by Chris Barrow
Can you remember the detailed content of a course that you attended 18 months ago?
Can you take ONE golf lesson, tennis lesson, driving lesson – and then win a match or pass your test first time out? Can you speed read a text book and then pass an exam? Chatting to a client a few days ago who was bemoaning the fact that: “I have invested in a number of trainers and it hasn’t made any difference – the team are still making the same mistakes” He added: “I’m beginning to think that all this training has been a waste of money.” Let’s stop and think about that for a moment. There is NO POINT in hiring a trainer, speaker, consultant or coach to come in and “entertain” your team for a day – then allow the “visitor” to ride off into the sunset with a fee and ask the team to turn up the next day and “do things right” in perpetuity. Professional sports people and entertainers train/rehearse every day. Your team development programme has to be sustainable – and that sustainability can only become achieved if you: •
Facilitate the training
Get an expert in to show everyone “how its is done”. •
03
Create the protocols
Once the expert has left, INVEST THE TIME in having the team create their own protocols or brand standards around the training received.
If you hire an expert to show your team how to: 1.
answer the phone
Make sure that those protocols are discussed, agreed, rehearsed and WRITTEN DOWN as a living document that can be adapted to future change.
2.
run the front desk
3.
provide an outstanding patient experience
4.
co-ordinate treatment
5.
sell ethically
6.
market for new patients
7.
manage social media
8.
count the beans
9.
manage the business
•
Ensure revalidation
This is the secret ingredient that most clients miss. Revalidation isn’t just about clinicians taking courses to keep the GDC happy. Revalidation is the professional and business version of rehearsal and practice. Revalidation means that you hold regular team meetings (see yesterday’s post on frequency) and make sure that EVERY team member has a chance to practice and learn (via rehearsal and constructive feedback) the essential performance and behaviour that will keep you at the top of your game.
but do nothing about CREATING PROTOCOLS and REVALIDATION, then “yes” you are wasting your money. Please don’t tell me that your team are failing as a result – to quote the late, great Stephen Covey:
“If there’s a problem with your team – the problem is you”
Visualising 2023
written by Chris Barrow
Michael Gerber defined different levels of business ownership over 20 years ago in The E-Myth Revisited:
•
•
•
Technicians – tend to focus their energy on the skill they originally learned – the dentist who wants to do dentistry at the highest level Managers – want to combine the technical work with responsibility for people and systems – the dentist who wants to do dentistry and run a multisurgery (or site) business Entrepreneurs – want to relinquish their original skills and facilitate the use of time, money and people to build corporations – the dentist who doesn’t do dentistry any more and is building the multi-site micro-corporate
Until recently I would have demonstrated that the proportions were: •
66.6% Technicians – career associates
•
33.3% Managers – Principals
•
0.1% Entrepreneurs
I believe those proportions are beginning to change, only in the sense that more “Managers” (i.e. Principals) are moving to the micro-corporate business model (hence the creation of my Top Twenty Club to reflect their special strategies and tactics).
Let’s take a look at what UK dentistry might look like in 2023. I doubt that the proportion of Dental Entrepreneurs will rise much above 0.5% but those 100 or so individuals will make a huge difference to the profession overall.
There are 10,000 “Managers” (Principals) in UK dentistry currently. My prediction is that in 10 years there will be 2000 The rest having •
retired early (Who wouldn’t sell to a macro-corporate at the moment? With goodwill values approaching 140% in the NHS it is time for a lot of frustrated 45-60 year olds to cash in their chips as the refinanced big boys continue their land grab)
•
morphed into micro-corporates
•
simply vanished
My prediction is up to 100 micro-corporates in the next 10 years, each made up of up to 100 practices (but probably averaging 25 practices) There are roughly 14,000 “Technicians” (associates) in UK dentistry currently. My prediction is less than 7,000 UK associates in 10 years, 2/3rds working for corporates and 1/3rd in independent practice We know that the supply/demand curve for Technicians (associates) is heading “south” – there are more associates than there are jobs and the advent of direct access and the new NHS contract will only accelerate this. Remuneration for associates in the NHS sector now averages 35% of gross (heavily disguised in the UDA system) and private associate remuneration is marginally heading towards 40% with the advent of the type of sliding scale contract featured in the “associate profitability spreadsheet” that we broadcast last week (over 750 requests for a copy – a 7connections record for engagement).
All of this is good news for some – the correct response is to ask yourself the following questions”
“As a professional individual, where do I want to be in 2023? Technician, Manager or Entrepreneur?” “What do I have to do to get there?”
04
People and Profit
You can’t do it all by yourself.
written by Chris Barrow
At
£600,000 in sales you need a full-time practice manager. You handle: 1.
Overall business strategy
2.
Dentistry
Your practice manager handles: 1. Finance 2. Marketing 3.
The patient experience
4.
Treatment co-ordination and sales
5.
Operational issues
As a result, the bigger you get, the lower your profit margin – because “people” are your biggest expense. “People” includes more payroll as well as more self-employed sub-contractors. At £600,000, run it well and you will hit 3035% net profit before tax (and before your drawings). At £1.2 million, run it well and you will hit 25-30%. At £2.4 million, run it well and you will hit 20-25%. Above £3 million you will hit 15-20%.
6. Teamwork
Bigger doesn’t necessarily mean better – sometimes it just means bigger.
At £1.2 million in sales you need a full-time business manager and a full-time clinic manager.
Becoming bigger is only possible if you embrace two important skills into your armoury:
They split 1-6 above.
•
Leadership
At £2.4 million in sales you need:
•
Management
•
a part-time financial manager
•
a full-time marketing manager
•
a part-time social media manager
•
a full-time clinic manager
Understanding the difference between these two – and grasping the essentials of becoming a good leader to good managers – that’s a key skill that will differentiate the winners and losers.
They split 1-6 above.
If you are doing 1-6 (or any part of them) – you need a coach to help you recruit and train a great manager(s). If you aren’t hitting those profit margins – you need a coach to help you get there.
05
The Answer to delivering the best patient experience – from my laptop
written by Sonia Rishi
I’ve recently (and admittedly for far too long) been spending time thinking about the patient experience. Those
of you who know me, will know it’s a passion of mine. The clients we work with at 7connections are also passionate about it. All of them (and that’s not me being a tad biased) want their patients to experience the very best levels of service – not just in terms of dental treatment but also in their entire visit and all subsequent visits and connections with the practice. Our clients also all do it very well. Their clients love and rave about them. However, they all want to know how they can be even better. Which is where we get involved! I truly have the benefit of working with some excellent practice managers and their teams, so luckily for me my job is never that difficult. I am obsessed with the phone, systems and processes that make planning patient journeys even easier. At 7connections we work with front of house teams, develop TCO’s, create useful check lists, analyse data to improve the experience and motivate teams to work as teams. In our Mastermind and Twenty group meetings, we also lead leaders in their ambition and direction.
But, what is the best way to maintain this excellent patient experience? And then, I realised the answer was right in front of me. Well within the laptop in front of me. Revealed by Carmine Gallo in his research into their retail stores, ‘Apple’ stands for: Approach Customers with a Personalised Warm Welcome Probe Politely to Understand All the Customers Needs Present a Solution for the Customer to Take Home Today Listen for and Resolve Any Issues and Concern End with a fond farewell. If you substitute the word ‘customer’ to ‘patient’ you also have the answer. Simple really. If you would like to integrate this into your practice and team, let us know! Get in touch by giving me a call 07825889394 or give me an email on sonia. rishi@7connections.com
But for some time I have known that there is something else. The service that our clients deliver are lifechanging. Whether it is brides (and grooms) wanting a healthier, whiter smile in time for their wedding, replacing that embarrassing missing tooth or relieving that terrible pain, the services our clients offer are truly ‘magical’. With these fantastic services being delivered day in and day out, the patient is already the most important person at the practice, and is always at the heart of everything the practice do. 06
How to train your team (and yourself) without damaging your cash flow
In his book “To sell is human”, Dan
Pink suggests that we used to strive for “access” to information in a world of scarcity – and that now we are struggling to “curate” information in a connected world of overwhelm. Just how many web, e-commerce and m-commerce sites can we visit? How many social media channels can we follow? How many blog posts/e-books/magazines/ newspapers can we read?
How many tribes?
Times are tight – I’m at the receiving end of a steady flow of enquiries from dentists who are having to work much harder to make ends meet.
In the last few weeks I have noticed a significant increase in the number of workshops on offer in UK dentistry (me included with Cfast and various association meetings) – it seems that every week there is another broadcast to attend another great day.
This isn’t a doom and gloom post though – I also work with clients who are enjoying best ever years – and constantly looking at what the differences are between the winners and the losers (Want to know the difference? Quite often its the level of debt servicing required in the business).
The graphic design that goes into the invitations is superb (or intriguing) – the breadth of broadcast is huge across multiple channels – the subjects covered are timely, relevant and presented by masters in each footprint of the market – front desk, patient journey, marketing, social media, sales, treatment co-ordination, compliance, business building.
So the paradox is that just when you want your team to be as well trained as possible, investing the cash and the time off to get the training is at its most difficult.
How many forums can we join?
Add to that the frenzy of post-graduate courses – and then – the up-coming Autumn season of conferences, trade shows and gala award dinners. The cliche is that we could easily fill our calendars with endless educational, inspirational and B2B networking events – and never get any billable time sold.
07
I have a sneaking suspicion that ticket sales for these events will be lower than in previous years – and that’s a shame because having been in the presentation business myself for 20 years, I know just how much effort goes into event management and delivery.
That is THE challenge that faces all workshop and conference organisers – how do I get my client to down tools for a day and bring themselves and their team along, bearing in mind the loss of revenues, the wages and travel bill and the cost of the tickets? So there I was pondering that very question – if I decide to run a workshop for 7connections in the Autumn:
written by Chris Barrow
1.
what should we talk about?
Is there another way of doing this?
2.
are there any footprints available or are all the bases covered by great presenters?
A way that involves no travel, no loss of revenues, no loss of wages, no empty surgeries?
3.
will folks actually give up a billable day in the current economy?
4.
will they travel – and, if so, where to?
Yet – ensures that owners, managers, team members and clinicians can enjoy a challenging, engaging, educational, inspirational experience?
5.
and, of course, what nowadays represents a fair price – a win for the client and for the organisers?
I have to tell you that right now I’m not sure I know the answers to these questions (even though I want you ALL to attend my super-value Cfast marketing workshops in September/October!). I would welcome your feedback on these questions as market research – what would get you (and your managers/team) out of bed, tackling the traffic and holed up in a conference room for a day while the surgeries remain empty?
Help me here – because I need to know what floats your boat: •
a series of live or pre-recorded evening webinars?
•
a series of live or pre-recorded lunch and learns?
•
a straight downloadable e-learning programme that can be completed at your own pace and in your own time?
•
a simple telephone conference call?
•
a video group call (smaller numbers attending) using Skype or equivalent?
It seems to me that the challenge with
e-learning is the commitment to actually do the work as “attendance” isn’t compulsory – maybe we could devise a way to hold “delegates” accountable to complete modules by a given date – or take a test on-line by a deadline that would generate CPD? I’d love to innovate here and create learning environments that represent excellent value for money and allow clients to maintain their flow of business income uninterrupted. Please let me have your thoughts.
Or……..
08
The Experience
written by Chris Barrow
The 60′s American sales trainer, Joe Gandolfo, penned the following:
Successful business is 98% understanding people, 2% product knowledge. You need 100% of the 2% but its the 98% that makes the difference
So… Michael Gerber talks about working “on” or “in” your business – many of us have read The E-Myth material. I’ve been asking a question this week. “when was the last time you closed the practice for the day and took the WHOLE TEAM off-site to work on improving the patient experience?” Worst answer I had was “never”.
So nothing has changed.
Best answer I had was “January 2012″.
I’ve enjoyed my first week back at work so much – meeting with lovely people who are building Champions League practices.
If it makes sense for you to work “on” your business – doesn’t it make sense for the team as well?
The topic of providing a remark-able patient EXPERIENCE has been a theme throughout.
You know as well as I do that whilst you are working “in” it, you cannot think about the “on” it.
In an increasingly complex and competitive world – more dental products and more places to buy them – how is the bewildered new patient going to make their purchasing decision? The ones you don’t want will choose: •
Price – how little can I pay?
•
Time – how soon can I get the result?
The ones you want will choose: •
09
A TCO told me this week about how many new patients tell her that they have shopped around, visited practices who charge less – but didn’t like the ATTITUDE of the people they met in the other practices – especially the clinicians.
Quality – what experience will the practice deliver?
So how do you expect the team to maintain standards and adapt to change if they never get any time out to talk about it? 98% of your future success will dependent on understanding people – not products – the people you work with and the people you serve. Systems and products don’t create long-term relationships – people do.
A Milestone For Bridge2Aid Dental charity Bridge2Aid celebrates a milestone as it simultaneously hosts 2 dental volunteer programmes (DVP) in TWO East African countries! Previously only working
in Tanzania, June saw the first ever DVP outside of the country – a pilot programme in Rwanda. It is reported that there are currently only 11 Dentists living and working in Rwanda – equating to approximately 1 Dentist for every 800,000 people. Excitingly, the pilot programme in Rwanda ran alongside a DVP taking place in Dodoma, Tanzania, making the event a real milestone for the charity. 4 healthcare workers participated in the training in Rwanda, whilst 6 healthcare workers successfully completed the dental training in Tanzania. Bridge2Aid Founder, Dr Ian Wilson, and Operations Manager Jo Topley both attended the pilot programme. Commenting on the programme, Ops Manager Jo commented: “We’re just so excited to be hosting a pilot programme in a second country. The team has worked exceptionally hard to make this happen and we hope it leads to many more in the future.” In the next 3 years, Bridge2Aid aims to train another 366 healthcare workers in East Africa which will ultimately provide over three and a half million people with safe access to emergency dental care, where otherwise there is none.
The charity is currently recruiting dental professionals to volunteer two weeks of their time during 2014 in East Africa, treating patients whilst training healthcare workers. For more information about taking part in DVP please contact Bridge2Aid’s Visits Team via email: visits@bridge2aid.org or by telephone: 0845 8509877 Editor’s notes Dental charity Bridge2Aid provide emergency dentistry to those who need it most and make a lasting change through training. Founded in Tanzania, Africa, and now working in other East African countries, Bridge2Aid’s Dental Volunteer Programme allows dental professionals to pass on their skills to local healthcare workers in East Arica’s rural communities, providing safe and sustainable access to dental pain relief where otherwise there is none. Bridge2Aid has trained over 250 local healthcare workers, providing access to safe emergency dental care to over 2.5million people in East Africa’s rural communities. More information at www. bridge2aid.org | Tweet @Bridge2aid | Facebook.com/Bridge2Aid
10
Connect With thanks to: Matt Cox - Graphic Design mattcoxmail@yahoo.co.uk Photography:
www.7connections.com
Cover
Pierre Guinoiseau - Flickr
03
ST33VO - Flickr
04
Dru Bloomfield - Flickr
05
Pierre Guinoiseau - Flickr
07
Paola Camera - Flickr
09
University Unions - Flickr
www.facebook.com/7connections twitter.com/7connections www.linkedin.com/company/7connections www.youtube.com/sevenconnections plus.google.com/115983402488165162996/posts
UGANDA
For every £500 raised, 2500 people in East Africa’s rural communities will be provided with ongoing access to dental pain relief
75%
of the world’s population has no access to a dentist
Kampala
Is your practice ready for the
Vic-Tri Challenge? 1 team • 4828km • 4 months
Jinja
UGANDA
KENYA
LAKE VICTORIA
Ruma National Park
KENYA
LAKE VICTORIA
Bukoba Musoma
Rubondo Island National Park
TANZANIA
Mwanza
TANZANIA
Are you ready for the Challenge?
Ask patients, clients and colleagues to sponsor your team!
This summer you can help us make a real difference to the lives of thousands of people living in dental pain with our all new challenge app! Your team is challenged to run, walk, cycle or swim 4828km around a virtual Lake Victoria, crossing the boundaries of Uganda, Kenya and Tanzania using the app to track your miles as you exercise. Challenge other teams and with the help of our live app map, track teams’ real-time positioning around the lake!
AFRICA
Register your team and download fundraising resources here or visit www.victrichallenge.co.uk
For details please contact our Fundraising Coordinator: fundraising@bridge2aid.org | 0845 8509877 | www.victrichallenge.co.uk @Bridge2Aid
facebook.com/bridge2aid www.bridge2aid.org
Bridge2Aid is a UK registered charity No. 1092481