Dental practices will never be the same following COVID-19. Even if a vaccine were to appear in the next 12 or 24 months, the underlying fundamentals of practices will be changed because patients as consumers have changed. Failure to recognize and address these changes will make the recovery from the COVID-19 crisis much more challenging and difficult.
Every dental practice is now facing a business turnaround. When a business faces a turnaround, it typically brings in a new CEO armed with a background in helping businesses recover and a playbook to follow. And this playbook usually has three significant areas that must be dealt with as quickly as possible—expenses, employees, and revenue. As the CEO of your practice, you must make it your business to address each of these areas to help guide your practice toward a faster, better, and deeper recovery.
It might be your first instinct to immediately reduce all expenses that you feel are unnecessary. You feel like you’re drowning, right? So to ensure your survival, you’ll start throwing everything out of the lifeboat, so to speak. It may be hard, but you must resist this temptation.
If you throw out too much, the practice won’t have the resources it needs to recover. Yes, it’s important to eliminate all unnecessary expenses. And you must also work to renegotiate every possible relationship (ie, vendors, labs, landlord, etc) for the best financial positioning. However, you must be careful not to cut expenses to the bone.
No job is sacred. Dentists must evaluate every team member objectively and determine whether they would hire that person today and if changes in the labor allocation can be made. Your staff selection not only will have a direct effect on expenses, but it also can make or break the success of your practice turnaround. Team members who did an acceptable job before the COVID-19 crisis may or may not be the same people who help your practice through the recovery.
If practice revenue exceeds expenses, the practice has survived and is moving into profitability. If not, the recovery becomes increasingly difficult. Dentists need to revamp all major systems and scripting to focus on one thing every single day—the recovery.
In a business turnaround, survival and success depend on the actions taken, and revenue is the key factor to the recovery. Practices with revenue will build cash that will help the practice now and protect it in the future. The systems and scripting that are now created must be simple, efficient, and followed every single day no matter what.
Practices must also track and evaluate certain key performance indicators every day instead of monthly to make any necessary adjustments. Quick modifications and alterations are the essence of a successful business turnaround.
When in a recovery, you don’t need to focus on a lot, but you do need to focus on the right things. As the CEO of your practice, you should concentrate all your efforts on expenses, employees, and revenue to help ensure your practice’s survival and success.
Dr. Levin is the CEO and founder of Levin Group, a leading practice management consulting firm that has worked with over 30,000 practices to increase production. A recognized expert on dental practice management and marketing, he has written 67 books and more than 4,000 articles and regularly presents seminars in the United States and around the world. To contact Dr. Levin or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit levingroup.com or email email@example.com.