By Jay Geier
If you are a dentist and you own your practice, you are also an entrepreneur. You can't ever forget you wear the entrepreneur hat, and are therefore subject to one of the most fundamental principles of a profitable business -- you have to make smart investments and stay away from bad investments.
There's no question that every practice owner has made investment mistakes. Mistakes are the ultimate learning opportunities. Unfortunately, most people resent mistakes, which keeps them from taking risks and trying new things, and ultimately this holds them back from growing their businesses.
In my 25 years of working with dental practices of all types and sizes, I've identified five areas where you should be making investments of time and money. These are the highest payback areas. I call them "The Big Five."
They are 1) human capital 2) space and equipment 3) marketing, 4) finances, and 5) clinical. I'm going to talk a little about each of these this month, and then I'll flesh them out in my column.
Human capital
Every single person you employ and pay is part of your human capital. The reason I call it capital is because it is an investment. Each time you add someone to your payroll and give him or her an opportunity to work in your practice, you must understand that person is an investment who should produce a fantastic return for you. Before you hire someone, be very clear about how that position will contribute to the growth of the practice and actually return their wage to you in value and/or profit.
Space and equipment
The physical space of your dental practice is your vehicle to growth and it has certain capabilities. The appearance of your office, the number of operatories, your location, equipment, and technology are all part of your space and equipment. When a part of your business (new patients, production) is stagnant or declining, there's a very good chance the capabilities of your current space and equipment are holding you back and stunting your growth.
Marketing
How much time do you actually spend on creating and executing marketing for your practice? Most dentists I meet spend the majority of their time delivering the service (treating patients). Yet the delivery of services is not a marketing function. You must spend more of your time on marketing and innovation so you can realize the big increase in revenue and profit.
Finance
Your finances should drive your practice. Don't make the mistake of letting your practice drive your finances. Set revenue goals and back your plans out of that. If you don't have goals and understand where you want to go, you'll never get there. It would be like getting in the car for a trip to a place where you've never been and not using a map or GPS. How would you ever get there?
Your finances should also be your daily scorecard for how your practice is doing and it should dictate your behavior every day. If you're not on track to meet your financial goals, you must have a strategy to get back on track. I also find that many dentists are turning the responsibility of managing finances to their accountant. This is dangerous because accountants are trained to set budgets and cut costs. Stay focused on making investments and growing, and you'll spend less time worrying about cost cutting.
Clinical
You went to school to be a dentist. Not an entrepreneur, not a business owner. You may possess the best clinical skills and know all the greatest techniques, but if you don't know how to leverage them you'll miss huge opportunities for growth. You must always be sharpening your clinical skills while at the same time mastering how to leverage those skills to reach more people, provide better care, and add to your bottom line.
Now get your head fully in the practice-building game and don't be distracted by things that fall outside of "The Big Five." Focus on putting in your time, effort, energy, and money. I look forward to fleshing these out over the course of this year in this column.
Jay Geier is a speaker, consultant, and president and founder of the Scheduling Institute. SI offers trainings in your office as well as trainings, workshops, and events at the SI training centers in Atlanta and Phoenix. For more information on SI's programs, call (855) 589-2919, email [email protected], or go to www.schedulinginstitute.com.
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