I want to share a story with you.
In the early 2000’s, I owned a dental practice and I was doing the traditional practice management thing. We made good money. But I found myself overwhelmed. The money only came when I was working so I felt like I needed to be always working. I was stretched to the max, stressed, and wanted a change.
In short, I was burn out. I threw up my hands. I thought, “I don’t want to do this for the next 30 years. Something’s gotta give.” So we sold the practice and moved back to my hometown, Brisbane.
I decided I wanted to be an associate for a while and get back to my roots. And my apologies to all of my bosses at the time – but it quickly became apparent I was not made to be an associate. I needed to be in business for myself.
I turned to the Internet. It was the Wild West. It was an exciting time where anything felt possible. I started building websites and building a digital agency for dentists.
That business taught me scaling and what a true business looks like. I learned I needed to look beyond dentistry to find the answers to running a business.
The 4 Types of Dental Practices
These practices fall along a hierarchy. It starts at the bottom and scales upwards.
- The Ground-Level Practice
This first practice is typically a new practice or a startup. This is a business that may be generating enough revenue to cover costs, but it might be struggling to pay the owner/dentist a living wage. In any event, it feels like the business owner is running a charity – they’re working really, really hard, but not seeing a return on their time and effort. What a business craves most at this stage is cash flow. They need money.
- The Lady Gaga Practice
Unlike the ground-level practice, this one generates revenue. It might fluctuate from business to business, but there is profit. The point to note in the Lady Gaga practice is that the profit is driven by a key person. You’re like Lady Gaga. If there is no Lady Gaga, there is no show.
The key person still needs to show up on a daily basis to rake in that cash. The business lives and breathes by the key person.
What this means is that the key person feels compelled to work. A lot. They worry if they take a holiday, revenues might dip. Things will be a mess. They worry that things won’t be done as well as they could do them. Their fingerprints are on every aspect of the business. This generally presents as lots of overseeing and micromanaging.
The uniting feature between these first two practices is that they are key person driven.
- The Gearshift Practice
This is a practice where there is no key person. The business owner is not shackled to the day-to-day operations of the practice. There is a team supporting the business, with each team member working toward a shared goal.
In this practice, we see a shift in priorities for the business owner. Instead of being the person that provides great service to your patients, you become the person that can build and lead a great team. This is what I like to call the gearshift. And this is also where a lot of dentists get stuck.
I did. I didn’t know how to make that change from dentist to business owner. I didn’t know how to make that leap. How to run a business is not a skillset taught at university. For most dentists, it’s something we have to learn through trial and error, which means it can be really easy to get stuck in a Lady Gaga practice and burn out.
- The End Goal Practice
This is the Holy Grail of dental practices. It’s a practice divorced from a Lady Gaga-like key person operation, but one that shows repeatable and sustainable earnings and a low degree of risk.
These practices have created value over and above a revenue stream by maximizing the multiple. An end goal practice is really about legacy. You have a strong team, a powerful culture, and streamlined operating systems. It’s the kind of practice that is going to survive through disasters and downturns. It has the systems in place to do so. You can step away. You can leave it to your kids. You can sell it. You have created freedom for yourself in terms of both revenue and time.
Scaling is changing gears.
When you’re in a ground-level or Lady Gaga practice, trying to scale is like driving from Sydney to Melbourne in second gear. You can only goes so fast in second gear. What happens is you accelerate, the engine revs, and then it gets hot and begins to burn out.
To stop this from happening, you need to switch into third gear. It feels counter intuitive, but you take your foot off the gas, engage the clutch, put the car into third, and then you can finally accelerate without burning out.
A lot of people will take their foot off the accelerator and then panic as the speed drops. They feel like they’re in no-man’s land. Instead of committing to the gearshift, they stay in second gear. There’s a bit of faith you need to have in yourself and your business to really make that leap. You need to be brave enough to let go of control (just a little bit).
Scaling a business is really all about building teams and working toward that legacy practice that can sustain itself.
I’m really passionate about helping dentists make that gearshift into true business ownership. All of this coaching is really to help you unchain yourself from your practice and generate not only wealth but the most precious resource – time. Stay tuned for the next part in the series about scaling your practice.
A little bit of housekeeping – I’m excited to tell you that we have launched a Savvy Dentist App that’s available for both iPhones and Androids. You can download it (for free!) in the Google Play Store or the Apple App Store and access all of our past blogs, podcasts, and more.
Next, if you haven’t already, please join the Savvy Dentist Facebook Group. We’ve got tools and resources, as well as a community of dentists, to help support you.
P.S. Whenever you’re ready …. here are 4 ways I can help you grow your dental practice:
1. Grab a free chapter from my book “Retention – How to Plug the #1 Profit Leak in Your Dental Practice” The book is the definitive guide to patient retention and how to use internal marketing to grow your practice – Click Here
2. Join the Savvy Dentist community and connect with dentists who are scaling their practice too
It’s our Facebook group where clever dentists learn to become commercially smart so that they have more patients, more profit and less stress. – Click Here
3. Download The Savvy Dentist App
The Savvy Dentist iPhone and Android App is a great way to keep up to date with the latest Savvy Dentist Podcasts, Blogs, Events and so much more. – Download Now
4. Work with me and my team privately
If you’d like to work directly with me and my team to take your profit from 6 figures to 7 figures …. just send me a message with the word “Private”… tell me a little about your practice and what you would like to work on together, and I’ll get you all the details! – Click here