Author: omniadmin

In every business and in every goal that you set, you have an end in mind.  When you set your New Year’s Revolution on January 1 of getting in shape, you had in mind a fit, toned body at the end.  The same goes for a dental practice.  When a dentist first purchased or started his/her practice, he or she had visions of grandeur of helping patients achieve top oral health while making a good living.  Most dentists achieve that goal.  But then, they let the practice go, stop replacing equipment, stop marketing and watch their production and patient base dwindle down losing 20% to 50% of the value of their practice.  Money they could have put towards retirement.  They end up having to retire vs. planning to retire.

So when do you start planning for retirement?  How about now?  Especially if you’re within 5 to 10 years of retiring.  Here are a few steps to follow to help you plan for your transition:

• Meet with your financial planner to determine how much money you will need to retire.  They can help you calculate how much you will need to save in order to maintain your current standard of living while in retirement.
• Perform an assessment of your practice.  This would include an assessment of your equipment, technology, procedures, ratio analysis, hygiene, new patients, financial review, overhead, marketing, etc.  If you do not have the time or know-how on how to do this, you can either contact me or your Henry Schein representative.  Henry Schein has a great tool called the Dental Practice Assessment Tool (DPAT).  It points out all the good things and opportunities for improvement in your practice.
• Go over your practice assessment in detail with someone knowledgeable about practice management and transitions to determine your targeted sales price you are hoping to achieve when you transition your practice.
• If you need help implementing improvements in procedures or other recommended areas in your practice, hire a reputable dental practice management consultant.  They can help you get to your goals quicker.
• Implement improvements recommended as part of the assessment.  If you’re within 7 to 10 years of a transition, it’s the perfect time to update your equipment and even remodel your practice.  Having a fresh look will help your practice sell quicker.
• After you have implemented the recommended improvements and tuned up your practice, have an appraisal of your practice performed.  I would recommend having one performed every few years as a litmus test to see if you’re getting close to reaching your targeted value of your practice.

By completing these steps and putting a transition plan in place, you will have planned and optimized your transition.  You can then transition when you want to instead of when you have to.

There are approximately 150,000 dentists in the United States.  Over half of these are classified as baby boomers.  In the next 20 years, it is estimated that one-half, or 75,000, of the currently practicing dentists, will retire.  The current number of graduates coming out of dental school is on a decline.  According to the Journal of American Dental Association, there will be 500 fewer dentists coming out of school than retiring over the next 20 years.

What this means to the baby-boomer dentists will be reflected in practice values.  Currently, if you live in a desirable area, Seattle, or Portland, for example, you can sell your practice for an average of 75% of the last 12 months of production.  (Disclaimer: This is a rule of thumb; an actual valuation should be done to determine your practice’s value).  I have even seen practices selling for as high as 100% of production in certain cases.  This classifies the current market for practices as a seller’s market.  The high percentage is primarily due to the shortage of practices for sale in certain states and prime locations.

Thanks to the current poor economy, there are many baby boomer dentists who were going to retire but have decided to work a little longer while they recover their paper losses in their retirement portfolio.  Most dentists assume the sale of their practice will make up 20% of their retirement account.  While the baby-boomer dentists hold on to the practice, it is creating an adverse effect on future practice values.  Dentists who cannot find an existing practice to purchase are opening their own start-up practices.  Also, when the economy does pick up again, there will be a log-jam effect of dentists retiring.  This will drive practice values down to at least the national average of 65% of production.

So, if you are holding off on selling your practice to recoup some of your lost retirement portfolio, you may want to do some math to determine if holding on to your practice is the right thing to do.  It may be better to sell your practice and harvest the equity while the values and practice are at their peak.  You can then work as an associate to continue building your dream retirement, or better yet, retire to your dream retirement spot and live your retirement dream.

You have several options to choose from:

• One of the best ways to boost morale is to implement an incentive-based system in your practice.  This gives the staff incentive to work together to improve production.  Staff incentives mean more money for the staff.  They say money cannot buy happiness, but it sure helps.
• Another tip is to keep lines of communication open.  Hold your morning staff meetings and let them know what is going on with the practice.  If you have exceeded your goals, let them know how well they are doing and that they are appreciated.
• Show your appreciation with a staff lunch, an afternoon at a Mariner game, or a $50 gift card to Nordstrom.  It will make them feel good and not cost too much.
• Have quarterly or semi-annual one-on-ones with each staff member.  Give them positive feedback along with areas they can improve.  If one of your staff members is known as the one who gossips too much, you can carefully give them that feedback.  At the same time, you can tell them how good they are doing.  Remember to give positive feedback with negative and make it constructive negative feedback so they can improve their performance.

These simple 4 items can be the difference between a gossipy staff with an attitude and a staff signing from the same book.

A hot topic these past few months that we have been getting a lot of inquiries on is Practice Management Software.  There are over 30 different Practice Management Software companies, so it is not surprising that you may be solicited every few months by these companies.

From our experience and research, there are three levels of Practice Management Software.  We will call these levels coach, business, and first-class.  If you choose the coach class such as Genesis or Easy Dental, you’ll get where you need to go, but there are no-frills (not even a bag of pretzels).   The business class, like Practice Works or Mogo has a few more frills than the coach class at a slightly higher price.  The First Class level of software, Dentrix, and Eaglesoft, will get you there with all the additional perks, but it will cost you much more.So, which one do you choose?  The answer is…..it depends.  It depends on your level of technical expertise, what types of treatment your practice will be performing, and the technical capabilities of your staff.  A good way to determine if you need the bells and whistles of a first-class practice management software is to put together a list of requirements for your practice.  You can begin by looking at treatments you spend 80% of your time on.  If you’re spending 80% of your time doing general dentistry such as crowns and bridges, you can get by with a coach or business class software.  You will also want the input of the staff.  Certain software is much more user-friendly than others.  Your staff will want to be in on the selection process since they will be the ones using the software.

Our recommendation when you are first starting in the practice is to begin with a coach or business class software package.  You can generally get into Genesis, Mogo, or Easy Dental for under $5,000.  After you have been in the practice for a while, you can then evaluate whether your needs are being met by the software program.

As one of the benefits of being part of Doctor’s Mentor Network, we have negotiated favorable pricing with a number of Practice Management Software vendors.  To discuss your needs, you can contact us anytime!

Thought is the sculptor who can create the person you want to be.  — Henry David Thoreau

Our thoughts and our attitude determine who we are and what others think of us.  Those “others” include your patients, your staff, and your peers.

Your attitude towards yourself, your staff, and your practice resonate through your pores like you just ate a big bowl of spaghetti with extra garlic.  It is so important to carry an appropriate attitude as you work in your practice.  Your attitude creates you and your practice.

As patients come in, you should have an attitude that you’re happy to see them and that you’re going to help them with their dental health.  If you have an attitude that you’re going to make a boat payment off of this next patient, the patient will feel that attitude.  They will probably only help you make one boat payment as they’ll be short time patients from the feeling and “vibe” they get from you.

Your staff also senses your attitude.  I know of several dentists who have an attitude that they want to make as much money as quickly as they can.   They care little about the staff or the patient.  This is fun for the staff for the first few months.  Then, they get bored and burn out very quickly.

One book I have read at least four times is a book by Napoleon Hill called “Think and Grow Rich”.  The title is more than what it seems.  Napoleon Hill researched many wealthy individuals in the early 1900s.  One of the biggest revelations Napoleon Hill found was that what differentiated many wealthy people from others was their attitude.  It wasn’t just an attitude towards making money, it was an attitude towards life, family, church, and themselves.  Controlling your attitude and keeping positive is important for your practice and for your personal life.

An exercise that Napoleon Hill recommended was choosing one area of your life, it could be your practice, that you would like to change.  Take one half-hour each day and sit back and relax.  Envision that one thing you want to change with a vision of what you would like that one thing to be.  If you’re focusing on your practice, envision the perfect practice that is perfect for you.  Do this exercise for thirty days and your attitude towards your item to change will look much different.