Running a Practice as a Business

John Grant talks about embracing the changes to the dental industry and the importance of running a practice as a business.

People don’t like change, but the fact is, change occurs all the time and the pace of change itself is happening more quickly than ever before. If changes aren’t addressed in your practice, you could end up so far behind that you may never catch up. One of the most significant changes is the rise of the power of the consumer. If they don’t get what they want, people will start to vote with their feet and owners need to start recognising that their practice is a business.

There are a lot of parallels between the dental industry and the legal industry. To me, it appears that what happens to the legal industry tends to happen between 5 and 10 years later, to the dental industry. In the mid nineties, for example the government introduced Legal Aid Franchising with payments for certain contracts being divided up into 12 equal monthly payments. Sound familiar?

In the 90’s I would say in the region of 80% of the law firms in Leeds offered legal aid to some extent or another, but now there are probably only half a dozen, if that. Similarly, around the turn of the century, the solicitors who were “switched on” started to realise that they could not simply continue operating as they had previously, otherwise they would eventually run into trouble.

Over the last few years, thousands of law firms have gone out of business. The primary reason for this was that they did not appreciate that they had a business and continued to run as a professional service entity. And I see a lot of dentists falling into the same trap.

To avoid this, there are six essential elements, which are required to run a successful business. The skills needed to deal with each of these areas are required by the owner/practitioner or if they do not have them personally, by a member of their team or an outside consultant:

Strategy

Strategic planning is vital; practitioners need to consider their Vision for their business; where do they want the practice be in the in 12, 24 and 36 months time (in todays ever changing world, to plan beyond that is something of a waste of time). Although things will certainly alter, it is a good idea to think about where you want the practice to be and how it can be achieved.

Finance

It is essential to be able to understand a balance sheet and profit and loss account. There are now some forward thinking practices that are able to use ‘real time’ management information, which enable them to see exactly how the finances are at any given minute. For many, their eyes will glaze over when faced with a page full of figures – so it is imperative that those people engage someone who does understand. Alternatively they can approach their accountant as many will offer financial consultancy services to interpret data and advise you of any steps you need to take in order to take another step on the road to financial heaven – or what to do to avoid financial ruin!

IT

IT is such a big part of everything these days and again, if the dentist is not an IT expert, someone working at the practice needs these skills. Most practices with bespoke dental software only use a fraction of its capabilities and are therefore missing out on all manner of useful information and assistance that could streamline the running of the practice. Dentists should also remain responsive to technical advances on the clinical front and by investing in IT they can ensure that they remain progressive in this competitive market.

Marketing

Research reveals that between 70 and 80% of new patients come from recommendations from existing patients. Any practice relies on its existing patients coming back, so practices should primarily focus their efforts on their existing patients. Making sure your receptionist greets patients by name as they enter the surgery will pay far more dividends than spending a fortune on an expensive website!

It is a good idea to conduct some market research: Consider the demographics of the area and what kind of dentistry is most appropriate to those people. Marketing is about finding out what people really want and delivering it to them in a positive and memorable fashion.

Regulatory:

Regulations cannot be ignored even if we don’t like them. I am loathed to use the letters GDC but they exist and many practitioners, are finding themselves appearing before them – whether justified or not. Practitioners can choose whether to view regulations as a necessary evil to be reluctantly tolerated or whether to embrace regulations as an opportunity to provide a framework to better run their practices.

HR

Simply put, happy staff means happy patients.

It would be fair to say that there are a number of practice owners whose HR skills are perhaps somewhat lacking. Knowing how to get the very best out of your team can make a huge difference to how a practice performs as well as the patient experience.

Those that are business minded and innovative will flourish but many will suffer and fall behind the changes over the coming years. Practice owners need to recognise the need for change and make the necessary adjustments to their practices.

 

John Grant of Goodman Grant Lawyers for Dentists – a Past Chairman of ASPD

For more information call John Grant on 0113 834 3705 or email [email protected]

www.goodmangrant.co.uk
 

ASPD Member

 

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