We’re just back from two hectic days at The NEC for The Dentistry Show. We seemed to be the only coaching company with the confidence to hire a stand (although various coaches were wandering around the aisles!).
At busy times, our small stand overflowed with both Breathe Team and Visitors into the catering area next to us and enquirers stood three deep waiting to talk to our team including: Me, Ernie, Jayne, Jon, Lucy and Tara. Maybe, some stand visitors were just after a Breathe pink cup cake or a decent coffee (our signature dishes!) however, many wanted to ask questions and take advantage of our free half-hour coaching sessions which rapidly filled-up.
Breathe Coach, Jayne Sproson gave a presentation on getting the whole dental team involved in selling, to an audience of over 150 (with many standing ~ the biggest audience of the day) and Jayne’s presentation generated lots of interest in what we can offer.
Many of the Dentists I met fell into one of these three groups. They wanted to:
- Buy a practice
- Grow the practice they already own or
- Start a new practice or a new corporate.
Many of the Dentists I talked to were wishing to buy (or already owned) practices that gross between £270 and £400k. I know that I am at risk from making some generalisations here, but I struggle to see how practices of this size will remain profitable. Although some of the owners (or sellers) of these practices claimed that they made in excess of 40% profit, I believe that this may be because:
- They are old-style practices situated on the high street over shoe shops, or in domestic properties with extremely low overheads because…
- They are doing old-style dentistry using old kit and decontaminating and sterilising within the surgeries…
- Without a hope of complying with HTM01/05 or the new CQC Compliance Regulations without making structural changes…
- On a patient base who have got used to the facilities and might soon be seduced by new (and better) owner-operated practices or Corporate Practices or even retail practices once Sainsbury’s, Boots etc really get going on opening dental practices…
- Some are owned by dentists near to retirement who want a speedy exit before change is driven by new regulations…
- And who want to cash in their goodwill for as much as they can…
- By selling to young graduates who are persuaded to buy, seemingly oblivious to the size of the investment they will have make to bring such a practice into the 21st Century and …
- * Get these practices compliant.
- * AND retain the patients who won’t need much of an excuse to leave and go somewhere better!
So the aspiring new owners of these practices need to understand that they will probably have two debts: a loan to buy the practice on a variable interest rate (which High Street Banks are testing at 7% interest for the future) and, a second loan to put back all the investment into the practice to make it compliant and ready for the 21st Century of patients and dentistry.
I’m curious about how these owners are going to survive the “tsunami of change” that is about to show up in dentistry and I believe that in order to do so, they will have to grow their practice a lot. This is the only answer to the rise in fixed costs which will inevitably follow the changes that they will have to make to stay in business. In fact, I believe that ‘small practices’ will stop being viable sooner rather than later, (so if you’ve got one to sell, better get it sold quickly!)
So, what do we advise the owners of smaller practices to do?! Well, firstly we believe they would be wise to learn as much as possible about the business of dentistry, especially in these 6 key areas:
- Business modelling and planning,
- Financial monitoring and control,
- Recruiting and retaining a great support team,
- Systemising the practice
And secondly, I believe they should judge their success over the next few years by seeing how quickly they can turn their £270-400k turnover practice into a £540-800k turnover practice. In my view, this will be the minimum size for a practice that any business-minded dentist would want to own!
If you want to learn about the 6 key areas of the business of dentistry and develop your practice for the 21st Century, then you need to join the Breathe Breakthrough programme. Please contact Ernie on 0845 299 7209 or firstname.lastname@example.org to discuss our Breakthrough programme (and quote this ezine to participate in our “Taster” event!)