When you made the decision to take the first steps toward earning your DDS or DMD degree, the world was a decidedly different place than today. Whether you graduated just a few years ago or have been practicing for several decades, a lot has changed. You’ve changed, too.
For example, you are probably now married, own a home, and may have several dependents. All of this means your monthly overhead has increased significantly from your carefree college days. Consequently, your need for a substantial income may have become a primary driver in your life.
Also, as your practice grows and revenues follow suit, it’s more vital than ever that you effectively protect your assets. The accumulation of wealth for your family’s security and your retirement should be a concern for the here and now and not simply an abstract notion to worry about tomorrow.
Against that backdrop is the reality that everything in our lives has grown more expensive. Since the 1990s, the cost of living has risen by close to 100%, a considerable jump in a single generation. According to US Census Bureau figures, the average price of a new home in 1994 was $144,400 compared to $309,200 today.
Recent data from the Small Business Administration, an independent federal agency, shows that the nation’s 28.2 million businesses (the highest number ever) are contributing mightily to the economy and creating serious wealth for their owners. For example, fully a third of individuals with investable assets of $1 million to $5 million are business owners. Even more telling, business owners account for roughly 75% of people with $5 million to $25 million and 90% of those with $25 million or more.
The fact is, business ownership is responsible for more wealth in the nation than any other form of wealth creation. Most importantly, due to the connected world we all live in and the wide availability of productivity-enhancing resources and direct-to-consumer marketing solutions, now is a great time to own a business.
As a dentist, you have a unique (and one might say enviable) opportunity to participate in this wealth creation. As a sole proprietorship or family-owned business, your practice provides you with an instrument to furnish income and accumulate a portfolio of assets. Being a dentist ultimately means that you are in the wealth creation business.
So, regardless of the status of your practice, now is the time to rededicate yourself to making the future meet your expectations. You may be just starting out, have an already established office, or are well on the way creating your own regional multi-location empire. Whatever the case, the ground rules for success are the same: a dedication to excellence, a growth strategy, and strong organizational abilities. Here are 6 drivers of business success to consider as you reassess where you are and where you want to be in the years ahead.
You Have to Nail It
To be successful and accomplish your goals, there’s no way around that the fact that you and your team must be committed to excellence. Look at your friends who are standouts in their professions. What traits do they have in common? Whether they’re attorneys, doctors, engineers, CPAs, or consultants of one kind or another, those earning the respect of their peers and realizing their ambitions are typically the hardest working and most dedicated people you know. The same is true in building a dental practice that outperforms the rest. It requires a commitment to delivering a world-class find experience for your patients every single day. Nailing it means being “on top of your game” all the time.
You Have to Scale It
Remember when you first opened your practice? It was probably a small team. You worked shoulder to shoulder with each other ensuring both superior patient outcomes and the success of the practice. Today you likely have a team of associates, and running a smooth operation is more complicated and challenging.
In this line of work, the foundation for expansion is simple. You need to track a steady stream of prequalified patients to your door every single day. Although virtually all business owners desire growth, maintaining quality of service and keeping everyone “on the same page” becomes a job all by itself.
This is exactly why an office manager or business administrator becomes a necessity, as do other support roles. Taking growth on involves a larger payroll, investing time in training and perhaps even increasing risk. It also means that you must master the art of scaling your practice to grow your practice.
Great Organizational Skills Are Key
You need systems and processes in place so you can deliver a world-class experience and attract a steady stream of prequalified patients every day. As a dentist running a practice, well established or not, today you have more resources at your disposal than ever before, including tools to attract new patients, build loyalty, manage your time, schedule employees, and grow your practice.
Most importantly, you can’t do it all yourself or depend on others following your lead. Great organizations don’t just happen. They’re the result of excellence in hiring, training, and managing. Once you’ve built the team, learn to let go by delegating responsibility and allowing your associates to perform to their highest ability. Read some of the classic business books on teambuilding, time management, productivity, and organizational strategies for some ideas and specific techniques.
You Must Monetize It
Having defined some of the key ingredients of success in the previous 3 topics, it’s timely to discuss margins. Not only must you develop and nurture an ideal environment for recruiting patients, delivering high quality treatment and earning their loyalty (all while maintaining a content and productive workforce), you must do all of this profitably.
The only effective way to do so is to analyze your practice’s expenses (salaries, wages, benefits, equipment, supplies, rent, marketing) within the content of an income statement. When you view all operating expenses as a percentage of revenues, you gain insight into where your income is being eroded and perspective on where improvement can be made. Successful businesses make solid accounting practices central to their managerial style. It’s also the best way for you to maximize the financial benefits of owning and running your own practice.
You Must Live It Every Day
It’s almost unimaginable for someone to be in business for the sake of business alone, especially in dentistry. Most dentists and healthcare professionals I know are passionate about what they do. Providing services that directly improve the quality of life of others is a high calling from any perspective.
As I discuss the concerns of my clients on a one-on-one basis, it’s striking to me how universal these human needs are. They became dentists and opened a practice because they want to build a better life for the people around them, starting with their spouses and children and extending out to every new patient they greet.
However, be sure to balance your love for what you do with a sense of pragmatism. Among the many homilies attributed to founding father, inventor, scientist, and statesman Benjamin Franklin is this favorite of mine: “If passion drives you, let reason hold the reins.”
You Have to Hang on to Your Gains
If life is a journey, then your career serves as the milestones that measure your progress. While success comes in many forms—to many, it’s much more about achievement than a large bank account—keeping score is useful in determining both how well you’re doing in addition to how much good you’re accomplishing.
Yet missed opportunities, wasted resources, and squandered money should concern everyone, which is perhaps why each can sting with disappointment. If you make all the money in the world but you don’t manage to keep any, how successful have you really been? When doubt creeps in that you may not be making the best choices, or are struggling with income disbursement, wealth management, and retirement planning, look outside of your own experience for answers. When it comes to your finances, seeking out the expertise of a professional is not just helpful, but essential.
Of course, this short list of ideas is just a jumping-off point in your journey. I’m always interested in hearing what strategies are working well for practices anywhere. If you have strategies you’d like to share, or other questions or comments, please contact me. Now is a great time to become seriously wealthy. So, get out there and make it a great day!
Mr. McNeely, CFP, CIMA, is CEO of the LifeStone Companies. Using a consultative approach, he helps practice owners make smart decisions about their money by addressing their 5 biggest concerns: preserving their wealth, tax mitigation, taking care of their heirs, ensuring their assets are not unjustly taken, and charitable gifting. He has helped hundreds of busy dentists and entrepreneurs make informed decisions about their money so they can spend more time focusing on what they love to do and less time worrying about their business. He can be reached via e-mail at email@example.com or on twitter @timmcneely. Or, schedule a 15-minute call with him to ask him anything at (818) 534-4940 or asktim.thelifestonecompanies.com.