How to successfully transition into the next stage of revenue for your business.
By Emmet Scott, CEO, Community Dental Partners
Starting a practice is hard work, but it might be more difficult to grow your practice to the next stage of revenue. That $1.5 million to $5 million hurdle is particularly difficult for any young dental practice – a phase of growth that many refer to as the “emerging entrepreneur.” The idea with this transition is that you are moving into the role of a business owner, which is never an easy transition.
After working with Community Dental Partners for over a decade, I have developed three principles that you can leverage to help you over that $1.5 million to $5 million hurdle. These are ideas that are meant to inspire you to take that next step in growing your business and developing yourself further as a leader. Here are the three major principles that will help you to elevate your practice from $1.5 million to $5 million.
Understanding your patient avatar drives your decision making
A critical component to the success of any dental practice is focusing your initiatives on your customer base. Who do you want to serve? What’s important to them? What do they care about? It’s easy to get bogged down on things like having the right DSO documents and how to make certain structures work, but I think this is the foundation for any good dental practice. Understanding the patient avatar from the beginning will make that jump from $1.5 million to $5 million much easier.
When we started, Dr. Chad Evans, Co-Founder and Clinical Chair of Community Dental Partners, hadn’t even opened a dental practice yet. He was working as an associate at another practice, but he had a vision for what he wanted to build. We had to map the patient avatar out on a whiteboard, based around his experience as an associate. A lot of dentists these days have the tools to sort of cheat this system. Using your practice management system data, you can look at the details of who is walking through your front door and laser focus your services on that majority demographic. Offering general services for everyone is never a bad thing, but you could be much more effective by homing in on the services that your customers are constantly coming in for.
A lot of people treat entrepreneurship as a sort of mission to Mars. Pushing for innovation is ambitious and not the wrong approach, but you will have more success with focusing on the consistency of the experience for the customer. Consistency with your customer service is critical. Remember, the customer is the boss, and you are there to meet their needs.
Decide what your growth path is
When it comes to the growth path of your practice, you have a few choices to make. Each of these choices comes with their own separate choices down the road. But starting off, you need to decide how exactly you want to grow. Do you want to do acquisitions? Or do you want to do a de novo strategy?
No one path is wrong, it just necessitates different strategies. With the de novo strategy, you will likely already know your patient avatar type. For an acquisition approach, you might be better at growing a practice and supporting that practice as the customer
It’s also important to remember that “hero” culture is only going to take you so far. You cannot sustain being the sole driver of your business long-term, and you shouldn’t want to. Building a dental practice takes a ton of work, and you are going to need the help of your team to pull it off successfully. Build your team and grow revenue for the practice through them. Find ways to double down on what’s working and totally shed what isn’t.
Maybe you have a different skillset when it comes to the growth path. Some dentists decide “I can work on getting funding” which can be your own growth path. Whatever it is, you need to decide how you are going to bring value to the table. The most important thing to remember is that your growth path doesn’t have to be linear. There are seasons to growth, and it isn’t always going to be easy. You get to decide the vision.
Prioritize standard operating procedures over new technologies
Our CTO at Community Dental Partners, Michael Irvine, will often say that all technology does is accelerate whatever system you have in place. If you have a bad system and you buy some technology to throw on top of that, you are just going to exacerbate the problem. Before you try to solve all your problems with new technology, finalize some standard operating procedures that you think are really meaningful. Technology can be an incredible tool, but much of it is not designed to solve everything. People solve problems, software automates the solutions.
Instead, focus on creating a consistent experience for your patients and your team. Introduce standardizations to your practice to ensure consistency at every touchpoint, from the front desk to the hygienists. Standard operating procedures will last longer than any piece of technology or equipment you can buy. They are also highly malleable – if one isn’t working, throw it out and find one that will. You won’t get that same flexibility with technology.