Most dental practices fit the model of an entrepreneurial business. There is a start-up level and a growth level (both of which can plateau) and then, if everything goes well, a maximum potential level where revenue is increasing every year. Each of these levels has progressively higher production and profitability, as well as income. The challenge for most dentists is learning the classic entrepreneurial pathway and the steps that must be taken to move from one level to the next. Top-producing dental practices have figured out, one way or another, how to move from a purely entrepreneurial endeavor to a well-run, highly systemized practice.
Level 1
Many dentists begin their journey at level 1. This is frequently referred to as the “start-up phase,” but it also includes the “reboot” that occurs when a dentist purchases a small practice from a retiring doctor with a desire to reengineer how the practice operates and prepare it for growth. This first level is characterized by the doctor having high energy, great passion, and a willingness to do whatever it takes to get the practice off the ground. One of the characteristics of this first level includes the absence of systems to operate the practice. However, since production is relatively low at this point and things are growing slowly, the doctor and team have enough available time in the schedule to compensate for a lack of systems. But as growth continues, that won’t last. As the practice begins to develop, it becomes more chaotic, frustrating, and fatigue inducing. Production and profit may be growing, but the stress level is also rising proportionately. The dentist, who was putting in extra hours to help the practice operate and move through this first level, is now spending more and more time in direct patient care, which is good for production but not good for daily operations and efficiency. As the practice continues to grow, the chaos will increase and either the doctor or staff members (or both) will begin to fatigue or even burn out.
Level 2
When a practice in level 1 becomes too stressful and things are operating in a way that is not sustainable or desirable, doctors will naturally search for ways to improve the situation. They may not recognize it, but they are now moving into level 2—the growth phase. The best idea is to intentionally move into level 2, not simply just “let it happen.” Without proper planning, the production growth that comes with level 2 won’t be maximized and could waste away, leaving the practice stuck in level 2 with all the stress of level 1. Most practices begin to add additional staff during this time. Whether it’s for part-time or full-time roles, dentists recognize the need for more labor to handle the overwhelming amount of work. Gradually the practice will hire enough people to carry out day-to-day operations effectively. The biggest challenge of level 2 is staff training. Simply hiring people, as many practices do in this level, without providing explicit step-by-step training means that everyone will be operating below their capacity. Staff members often don’t have documented systems to help them understand how the practice should truly operate. Major systems need to be implemented with documentation for staff training in key areas such as scheduling, finance, insurance, case presentation, case acceptance, customer service, and hygiene productivity. As each of these areas is defined and step-by-step systems are in place, the practice will be prepared to move to the third level. However, the truth is that most practices don’t ever move beyond the second level. They end up with a full staff, doing a reasonable job, but they don’t have the systems and training for the practice to sustain growth after a certain point. This is the proverbial “plateau,” and it is common for practices to stay in this state or even decline a bit. But dentists who want to reach the true potential of their practice while enjoying a highly rewarding and satisfying career will be motivated to move to the third level.
Level 3
The third level is all about reaching maximum revenue potential. This is achieved through intense delegation, which allows doctors to do what doctors enjoy and do best: dentistry. In level 3, the team has become extremely well trained. Documented systems are in place with full scripting to help team members contribute to the practice achieving its maximum potential and their own personal potential. At the third level, dentists begin to delegate almost everything other than patient care and strategic responsibilities. For example, the dentist comes into the office, goes through a morning routine, attends the morning meeting, and spends the rest of the day directly involved in patient care. This creates an enjoyable and low-fatigue day where doctors can concentrate on clinical quality and patient relations, while staff members take care of everything else. Day-to-day operations should be carried out by the dental team. Doctors should not have to be involved in operational decision-making throughout the day, even to the point of allowing their assistants to guide them as to which treatment room and procedures come next. Learning to delegate is a key element of the third level. Practices can only move into this space if they have documented systems, a motivated team, and, most likely, an office manager. An office manager will run the day-to-day operations and act as a buffer between the doctor and team. Keep in mind that the doctor still leads the practice, providing mentoring, motivation, and inspiration to the team. The doctor also makes all strategic decisions, such as when to add an associate or partner, whether to invest in new technologies or physically expand the practice, or other factors that help sustain growth. It is this type of fully systemized practice, with team members who are trusted to make operational decisions, that results in increased revenue year after year. These revenue increases can be reinvested in the practice or taken as income at the discretion of the practice owners. The third level is the most enjoyable way to practice dentistry and is often characterized by a very happy dental team. They understand their roles, what is expected of them, how success is measured, and what they can do to contribute. Team members in third-level practices often stay in the same practice longer because they enjoy their jobs, colleagues, and environment.
Summary
The truth is that most new entrepreneurial businesses don’t last five years. Fortunately, dental practices are different, and most will last many years as they achieve a relative level of success. The question is not if a dental practice will last, but how far it will go. In each level, it is essential to take deliberate steps to move on to the next level; otherwise, the practice may be stuck in a place short of its maximum potential. Any dental practice can move up from one level to the next, but one mistake to avoid is trying to jump from the first level straight to the third level without the documented systems, team training, or doctor leadership that is developed in the second level.
Editor's note: This article appeared in the October 2021 print edition of Dental Economics.
Roger P. Levin, DDS, is the CEO and founder of Levin Group, a leading practice management consulting firm that has worked with more than 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 he regularly presents seminars in the US 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 protected].
