If you haven’t already taken a look at the Savvy Dentist Value Model, you’ll need to be familiar with it to understand the concept of the leverage line. Taking a look at the diagram of the Savvy Dentist Value Model, you’ll see a dotted line which we refer to as (you guessed it) the leverage line.
If you’re operating below the leverage line, you’ll find that you have a very key-person dependent practice that’s almost a self-employment situation.
Above the leverage line is where true business ownership exists, and it’s dependent on systems and teams as opposed to dependent on you.
The reason this diagram is really important is because if you operate a practice within the profitable level, what happens is your revenue and your cash flow will increase. And it can increase quite sharply and you’ll hit at some point a plateau.
As you hit the edge of the business model, you will definitely hit a plateau because you run out of hands, you run out of time, the business doesn’t have scalability built into it. And what happens is when you hit that plateau a couple of things occur. You’re then faced with a choice of either trying to sustain that and continue working, or trying to grow beyond that.
When you hit that plateau it’s a bit like driving your car in second gear and it’s really whining. You either need to change gears and leverage, or you need to take your foot off the accelerator.
The reason I bring this up is that changing gear requires a shift in focus.
It means a shift in providing dentistry all day, a shift to building and leading a great team, and shift to a systemised practice.
Shifting up a gear is like moving up a level in the Savvy Dentist Value model. When you find yourself in between gears, it can create a bit of an emotional response.
We like to stay doing what we know – even when we might have outgrown it.
You’ve spent years training to be a dentist, and maybe another 10-15 years honing that skill. It’s comfortable, you know how to do it, and it’s a bit of a security blanket. But that isn’t going to push you above the leverage line.
It takes a different mindset and a different skillset to cross the leverage line, and requires you to get a bit uncomfortable at times.
So, the lesson here is to not let that stagnant inertia get the best of you. Growth can be scary and intimidating at times, but it’s necessary to take things to the next level.
