Many Dentists don’t enjoy the management of their business. Others think that owning more practices builds wealth faster or that turnover is profit.
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The Dental Management Paradox
2/04/2012 11:10:03 AM
Dr Christopher Hart
We live in interesting times:

Many Dentists don’t enjoy the management of their business.

Others think that owning more practices builds wealth faster or that turnover is profit.

There are corporates buying dental practices as dental management companies then re-employing the vendor to run the practice for them.

There are dentists buying practices as an investment but then working in them as employees.

Dentists spend five years or more at university but are not taught any management skills so “management consultants” teach dentists to manage but the dentists still have to do the hard yards of management.

So what are the options if;
  1. We enjoy dentistry, have our own practice but don’t enjoy managing it
  2. We want to own a practice but don’t have the confidence to run one
  3. We want to own more practices but don’t have the skills or systems to expand
  4. We own one or more practices and the management has become a headache
  5. We want to turn our practice into a passive income investment but it does not seem possible
Ideally we would pay someone to manage for us while retaining a profit. However for there to be a management industry within the dental profession there needs to be a management profit after allowing for a professional profit (commission) and a return to the business owner.  Many times this is achieved by combining the professional profit and the return to the business owner (typical small practice with one or two operators). Many times there is only room for a professional profit at which point the owner of the business has bought a job (solo practice). A true business profit can be achieved where there is scale (usually three operators or more) however, many dentists do not want or need the hassle of employing other dentists. It can be likened to herding cats.

The theory of having someone else do the management so dentists can do the dentistry makes sense. The reality of this is much harder to achieve. If we own a practice already and enjoy the dentistry but don’t want to manage it the options to date have been to:

Expand the practice to enable the scale to allow for profitable management
  • Sell the practice and work for the purchaser
  • Sell the practice and work elsewhere
  • Engage management consultants
Growth beyond one or two operators while maintaining profitability is not always easy to come by. Furthermore many “practice managers” are dental team members we pay more for fear of losing them.  The owner is usually still in the drivers seat.

In most instances if the dentist sells to a corporate they end up managing the business for them anyway but the profit goes elsewhere (albeit after being paid for the practice). Even if a good price is realized the motives of the dentist and the purchaser are rarely aligned in the long term. If the dentist sells to another dentist the younger dentist generally only wants a hand over for a limited time and wants to do things their way. Again the motives are rarely aligned.

Dentists that wish to work elsewhere to escape management hassle generally find it difficult to find a suitable practice.

Management consultants deliver systems to help but the dentist still needs to implement them. Management consultants are great for motivated dentists wanting to manage that need the back up to achieve this, but if a dentist does not want to manage no amount of training or systems will help.

The real solution may be to remain in their practice and have it managed for them at a reasonable cost so as to enjoy the dentistry, make a real profit and have the hassle taken care of. How can it be achieved?

Thanks to the Life Style Smiles management service this is now possible. Over the last ten years running multiple practices we have developed robust and efficient management systems that allow us to make all sizes and styles of practice profitable as a managed business. We have developed systems to enable practices of any size to enjoy the benefits of scale and generate a true business profit while having the management hassle taken care of.

It is a turn key solution to practice management. It allows dentists to turn up to work with everything done, at a cost that is often no more than their existing cost base, and in many cases more profitable. From start to finish every detail is taken care of. All you have to do is the dentistry. That gives you a life style and a smile. You still own your practice but you don't have to run it. More importantly you don't have to run it for someone else. When you are ready you have a profitable, managed business to sell to the next guy.

If you are the next guy but are not confident to take the next step the Life Style Smiles management service can help with that as well. From setting up a practice from scratch to buying out another dentist we can provide the management assistance needed to take the next step without the stress or the hassle.
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