Sometimes It Feels Like The Walls Are Closing In!

We’ve mentioned the doom and gloom about, so Simon shares some thoughts on not giving in to the doom merchants and how you can prosper in 2010. Over to Simon:

20 years ago in Totnes, Devon, I opened my first dental practice. It was a squat practice in a lock-up, leased Tudor-building, on the high street, over a shoe shop. I had room for two surgeries, a loo, a back office and a reception/waiting area. The walls and ceilings were made of something like papier-mache and the floors were really rickety. If you listened carefully, you could hear the woodworm slowly munching their way through the 400 year old roof timbers. Into this quaint (cheap) and historical space, I installed state of the art dental kit and, as long as we could find a way of stopping the intra-oral x-ray arm from falling off the funny old walls, we were in business.

All I needed to add to the mix was a nurse, a receptionist (and later) a hygienist plus a little marketing and an offer of private dentistry ~ which was still unusual in Devon in the early 1990’s. The patients came in fast enough and I could make around 45% net profit. Some of the local Dentists got their knickers in a twist about my new practice, especially the marketing (anything other than a brass plate was unheard of then) and all of them got their knickers in a twist about the new (1992) NHS Contract. Sensing an opportunity, I resigned my NHS number, (no-one else did locally) and went fully private. With little in the way of competition and relatively high fees, it was a comfortable life seeing around 12 patients a day. By 1999, the building was overflowing and I bought an old warehouse beside the river, with floor to ceiling windows, and built a bigger, truly boutique practice which I sold 4 years later to focus on coaching dentists.

So, what’s my point? Well, what a difference a couple of decades makes. A lot of our clients have practices around the size of the one that I sold, (turnover at around 500k, two dentists, two hygienists, 2-3000 patients) and yet in 2009, they are struggling to make 20% profit and would die for the 45% profit we were enjoying 10 years earlier… What’s happened in the last 10 years to help suck the profit and the fun out of being a dental principal?

Here are some of the reasons that small’ish private practices are hurting:

  • Practice fixed costs have gone up.
  • Private fees haven’t kept pace with increasing practice costs, (Dental inflation has run at nearly 10% for many years and again in 2009 with the devaluation of the Pound against the Euro.)
  • Associates and Hygienists are asking for too big a share of the gross fees that they generate. This is particularly true of Associates who gross less than £1,500 a day wanting to be paid on 50% contracts and Hygienists who want in excess of £30 an hour in order to preside over chair occupancy of just 75% (or less).
  • There is far more dental competition. My practice was one of just a handful of private practices in Devon, which made it easy for us to differentiate our practice from the competition, who mostly operated NHS or mixed NHS and Private practices, which confused the hell out of their patients…
  • Ever more hurdles to jump in Employment law compliance.
  • Ever more hurdles to jump in Health and Safety compliance.
  • Clinical Compliance/Best Practice/NICE and CPD.
  • The Recession
  • ‘Pay as you go patients’ who have (even temporarily) stopped going and stopped paying.

And here’s a sample of what’s coming, just around the corner:

  1. New and radical decontamination regulations, for new practices now and for everyone from 2011.
  2. The Care Quality Commission.
  3. The Corporates, (existing and many new small ones) will relentlessly increase their market share by acquisition.
  4. Retailers entering the dental market.
  5. Revalidation in 2012.

So as we jump into 2010 (or in this weather, slip), what key attributes do small private practice owners need in order to prosper?

By far the most important attribute that will lead you to success during and after all this change is without doubt the quality of your ATTITUDE! All the moaners and doom and gloom merchants (including some Dental Consultants) are finding that they and their businesses will have a very limited shelf life! In any sector where there is a lot of change, there is also lots of opportunity. Lots of opportunity! Choosing an attitude that is relentlessly positive, flexible, innovative, and most important of all, focused on giving the market what it wants rather than what you think it should have, will ensure your continuing success.

To do this will take fantastic leadership from you, a great offer to your clients and very clear branded differentiation from your competition, enough of the right resources and a clear vision. You have to design and run a business that is resourced enough to withstand a few weeks a year of poor trading. Every year will serve up its own version of swine flu, snow & ice, strikes etc. This is NOT the time to hunker down and hide. Not if you want a business to pay you well and one day sell well…

If you would like some help staying ahead of the regulators or you would like to improve your leadership skills, contact Claire at the Breathe team on 0845 299 7209 or to register your interest in these forthcoming Breathe events:-

Don’t let them close you down! All the new regulations and compliance. Stay ahead and stay in business!

An interactive one day Clinic with Breathe Business Coaches, Dr Jon Sproson & Dr Simon Hocken to help you prepare for exactly what’s waiting around the corner. All the new regulations and compliance, 2010-2012.

Friday 12th March, 2010 – The Royal College of Physicians, London

For Principals, Associates and Practice Managers.

Places are limited.

“Lead Your Dental Team to Greater Success”

A two-day Leadership Clinic hosted by Breathe’s Coaching Director, Dr Simon Hocken

Thursday 15th – Friday 16th April, 2010 – The Royal College of Physicians, London.

For Principals, Associates and Practice Managers.

Places are limited.

This entry was posted in News, Uncategorized. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *