By DR SIMON HOCKEN
It seemed that around half of the many conversations I had on the Breathe stand at Showcase were with earnest young men, two to seven years out of dental school, who were disappointed with the reality of being an associate.
Working a couple of days here and a couple of days there for £50k a year or less fell short of their aspirations.
Their plans to improve their lot seemed to fall into two strategies: either go off and get post graduate qualifications (in restorative dentistry or implantology) in order to become a more attractive associate to those greedy principals, or start (or buy) a practice.
Many of those wanting a practice of their own were unable or unwilling to find the money to buy at current goodwill values and so they wanted to talk to us about opening a squat practice.
Most of these conversations went a bit like this:
“Where are you thinking of doing this?”
“Where I live now.”
“Oh really, is it a good place to open a squat dental practice?”
“Well I like it there”
“And what will you be offering?”
“Well, you can’t get an NHS contract, so private dentistry…”
Some of them brought floor plans with them of properties they’d found, some had got planning permission, some had persuaded one of the high street banks to lend them several hundred thousand pounds and yet they had little in the way of a proposition other than “private dentistry” and little idea of how they would succeed and make some money.
Of course, we’re happy to help them but, like everyone, I like to back a winner and at Showcase I don’t think I spotted anything that looked like a good idea…
One major problem for these budding principals is that all squat practices are essentially single surgery, single dentist practices until they have enough patients to fill their second surgery.
Some never get to that stage, and owning a single surgery practice is incredibly hard work and as a business it really doesn’t work at any level other than being your own boss!
Among the many problems with running a small practice are:
- It usually takes two to three years to grow big enough to make a profit
- It’s hard to get past the costs and so profits are low, somewhere between £40k and £60k
- Small practices can’t afford to hire enough help/people and so the owner has to do a lot of stuff that in bigger practices the management and clinical teams take care of
- It’s professionally lonely
- It’s hard to stop working, ever (because the money coming in stops immediately)
Few of these new practices are confident enough to spend enough money on effective marketing in order to grow fast enough to rescue the owner from this particular entrepreneurial misery.
And few owners have the communication skills or confidence to present big treatment plans to rescue the practice from a low gross.
However, if you are still set on doing this, and to be fair many squat practices do succeed (including my own), here’s five things you must get right in order to succeed:
- Decide what you want to offer (your proposition) and make it more compelling than the practices around you (seven day opening, for example)
- Open it in the right place, somewhere where it’s easy to find and park. And somewhere where other businesses bring in customers
- Create an effective marketing plan and spend enough money. Most of these practices fail or grow slowly because they don’t spend enough on good marketing, not because they spend too much
- Learn how to diagnose, treatment plan and sell all the treatments the patients need
- Understand you won’t earn any money for at least two years and so make sure you have sufficient funds to pay for your lifestyle while this practice isn’t earning you anything. Get the practice to two full-time surgeries, circa £500k turnover as quickly as possible and keep going!
If you are the owner of an established practice and one or more of these squat practices arrives on your patch don’t be complacent; they might not succeed very quickly but they will disrupt your cosy market and a proportion of your new enquirers will be diverted to the new practice(s), impressed by their proposition and promises.
Of course, the market will be the final arbiter on who wins and who loses, just be careful to pick the winning side!
If you would like help planning a squat practice call me on 07770 430576.