There are several ways to expand your practice and no one size fits all. When we get this question from clients, we ask about their reason for thinking about expansion. Do they want to grow their income? Work less in the future? Plan for retirement? Build a bigger future practice? Have a “partner” to share the business with? Each reason for expansion will lead to a different growth path. As with any plan to grow, you need to be able to measure where you are now and where you want to get to in the future. Lots of people see growth in a dental practice as just adding in another dentist. However, we’ve seen dentists add an associate and end up worse off than they were before.
As a starting point to determining the pathway for growth in a practice, we want answers to the following questions about your practice. It shows you where you are now. If you can’t answer them, then you need to start with a review of the practice systems and work from there.
- How many patients do you have? 1,800 to 2,000 is good.
- How many active patients do you have? An active patient is one you see on a 12-18 month recall. How many inactive patients can you re-activate?
- What type of work do you do? Regular check ups vs more extensive work.
- How far ahead are you booked? More than 4-6 weeks fully booked is a problem.
- How many new patients do you get each month? 25 per month would be good.
- What is your referral rate for new patients? Ideally 40% plus.
- How much per month do you generate in profit per chair? Do you work across two chairs?
- What is your treatment plan acceptance rate? More than 70% is good.
- Do you have enough space in the practice to add more chairs/treatment rooms?
- Does the practice administration and scheduling run smoothly?
- How does your fee schedule compare to other practices?
- Are your own patient fees over $800,000 each year?
Once you know the answers to how your practice is performing, you can make a decision about the best way to achieve your growth plans. You don’t have to do it all yourself either. You can employ the help of experienced advisors to get you going on the right path and achieve results quickly. Your team of advisors might look like:
- Marketing advisors to help with strategies for attracting new patients and generating referrals.
- Practice management advisors to help with organising the smooth running of the practice for better performance and financial outcomes.
- Dental business coaches to train the dentist to be more productive in service delivery.
- Accountants to help you know your numbers and track performance.
- Lawyers to help with HR issues, contracts etc.
Here are some scenarios we’ve seen that will grow your practice.
Work on Practice Performance
Getting your existing practice to perform at its best, is the starting point for growth. Often, we see practices that have been going for years and with some changes to practice administration, marketing or non-clinical training, the income can increase significantly. You can drive new patient numbers with a change in marketing. Look at scheduling your day to be more productive. Do some soft skills training to get a better take up of treatment plans. Are there new services or products that you could be offering? Can you work more efficiently by adding another chair? Work on your practice systems and performance will produce results quickly and usually go straight to the bottom line.
Add a Hygienist
If you’re looking to grow your income, free up time and reduce stress, you should consider adding a hygienist to the practice. If you are doing continuing care on 7 to 8 + patients a week, you could add in a hygienist and free up a day of your time. You can then see patients with more complex work, charging higher hourly fees. You need to know you can keep the hygienist busy, so good recall systems are essential and you also need good practice systems to introduce patients to the idea and move them away from the dentist. Along these lines adding a dental therapist could also be considered depending on your patient mix.
Add a Dentist
Usually this is the solution people jump to first. If you’re too busy, want to reduce stress or your hours, thinking of retirement or planning a multi-dentist practice, you might add in an associate dentist. You need to make sure that you have challenging work to keep them busy and earning a satisfactory income. To work this out you would look at the indicators in the practice. The number of patients you have, how many inactive patients you can reactivate, new patient numbers, referring patients, income per chair, space constraints and if your practice administration processes will cope with a new producer.
We’ve seen problems happen if the principal does not hand over patients and the associate is under-utilised. They also happen if all the “good” work goes to the principal and they don’t share with an associate. You also need to plan for the introduction of the associate to the team and patients.
The old adage of “Fail to Plan, Plan to Fail” is so true in business, and you’re wearing the business owner hat when you make decisions on expanding your practice. Start with a good look at where you are now, why you’re chasing growth and who you need to get to help you achieve it. You need to plan all the stages to get a great end result. Remember, you’re not alone. We’re here to help.
By Alison Lacey, Chartered Accountant and Director