The Savvy Dentist Value model™ is a framework we developed to show the progression of a practice as it grows and scales. All of our courses, training, and resources are designed to help you identify where your practice sits on this model and how you can progress to the most profitable practice you can be.

The Savvy Dentist Value Model Pyramid

Unviable Practice

An unviable practice is one of those practices where, frankly, cash flow is a bit tight.

The revenue of the business may be covering the operational expenses or breaking even, and the business owner may even have to supplement their income by working elsewhere.

Usually, this type of practice is a start-up practice. And of course, most practices will grow through this – but some don’t. We see that from time-to-time businesses do fold, and it’s usually because they don’t have cash flow.

At this particular level, it’s a lack of cash flow (not revenue) that means the business is unviable. Cashflow is the oxygen that keeps the business alive. In times like this, the practice owner can feel like they’re running a charity, working hard and not getting ahead.

Profitable Practice

A profitable practice has solid foundations; a good team in place, patient flow, and some basic systems. There’s a huge amount of variation at this level, you might have a lot of profit or a little bit of profit.

You can be doing quite well financially at this point, but the big thing here is that people often fall into a self-employment situation. That happens when the owner or the principal of the practice is also the person who’s largely generating the revenue, in some cases, it’s upwards of 50% or 60%. The risk here is that if the practice owner stops working or they want to go on holiday or they fall sick, then the revenue of the practice takes a major hit.

Apart from the revenue dependency, it also means that the owner will spend their whole day working in the business and seeing patients and then trying to work on the business out of hours. And it makes sense because most people want to maximize their clinical productivity.

However, there’s a saying that “making money is killing your business,” and it does sound counterintuitive. A lot of people get addicted to the free cash flow or EBOC and don’t want to take their foot off the accelerator to change gears – which is what’s required to move beyond this level.

Scalable Practice

Beyond the profitable practice is the scalable practice, and that’s where we talk about having a true business. And a true business is one where the principal is no longer the primary revenue producer, they’ve been unshackled from that responsibility.

It means that if they’re not there for whatever reason, the revenues continue, the cash flow continues, and the business survives.

It means you’ve got a team that delivers great care on your behalf. That means that you’ve spent time building and leading a team.

You’ve developed the systems and the processes to allow the team to execute on the promise of the practice.

Valuable Practice

Finally, we have this level called valuable practice. We refer to it as that, because practice at this level has so much value that if you chose to sell it, you could sell it quickly, easily, and for a great price.

At this level, your practice has generated wealth, and legacy, and is truly set to stand the test of time.