Building a Multi-Million Dollar Dental Practice: Proven Strategies for Success (E.222)

“If you want to be a top-performing dentist, you have to have a top-performing team.” ~Dr. Bruce B. Baird

In this episode of The Productive Dentist Podcast, Dr. Bruce B. Baird dives into one of the most common aspirations among dentists: growing their practice into a multi-million-dollar operation. If you’ve ever found yourself thinking, “I want to be like that successful dentist down the street,” then this episode is for you. Dr. Baird reveals the key strategies that can rapidly transform your practice, starting with the power of comprehensive exams and the importance of a healthy new patient flow.

But that’s just the beginning. Dr. Baird tackles the tough questions every ambitious dentist faces—how to break free from the constraints of PPOs, the secrets behind net zero marketing, and the steps to creating a brand that allows you to do the dentistry you love on your terms. Whether you’re aiming to cut down your working days while maintaining or even increasing your income, or you’re looking to build a $4 million practice, Dr. Baird shares the proven methods that have helped countless dentists achieve these goals.
This episode is packed with actionable advice, from optimizing your overhead costs to making the transition to a fee-for-service practice. If you’re ready to take control of your practice’s growth, reduce stress, and achieve a work-life balance that truly satisfies you, you won’t want to miss this episode. Tune in now to learn how to build a thriving practice that gives you both financial success and personal fulfillment.

As you listen to this episode, we invite you to think about the following questions:

• How well is my current team functioning, and what steps can I take to improve our overall performance?
• Am I prioritizing sustainability in my practice, or am I overly focused on short-term profitability?
• What opportunities for growth and adaptation exist within my practice?

EPISODE TRANSCRIPT

[00:00:00] The Productive Dentist Academy Podcast Network.

[00:00:03] Regan: Doctor, are you living the dream or just dreaming of living? It is my honor to announce the PDA 20th anniversary special conference this September 12th to the 14th in Frisco, Texas, the nation’s leading course on dental practice growth. If you feel isolated as a leader who is frustrated that your schedule is unproductive, maybe your team is disjointed or your systems are inefficient, this is the conference for you. The PDA 20th anniversary conference has all new features, including Keynote speaker, Emmett Smith, who is a pro football hall of fame, running back, and entrepreneur. You can choose your own educational track to customize your learning experience, go to www.productivedentist.com and click the pop-up or select Productive Dentist Academy Conference under the Dental CE and Events tab. That’s www.productivedentist.com. Seating is limited. Register today and we look forward to helping you make your dreams become reality.

[00:01:06] Dr. Bruce Baird: What you’re gonna find is growth happens. Satisfaction happens. Now you’re going from four and a half days a week to four. Hello everyone, this is Dr. Bruce B. Baird and you’re listening to the Productive Dentist Podcast. In this podcast, I will give you everything that I’ve learned over the last 40 years in dentistry, working with thousands of dentists. I’ll tell you, it’s not that my way is the only way, it’s just one that has worked extremely well for me and, and I’d love to share that with you so you too can enjoy the choices and lifestyle. The productivity allows more time for things you love, increased pay, better team relationships, and lowered stress. Let’s get into it with this week’s episode of the Productive Dentist Podcast. Hi, this is Dr. Bruce Baird with the Productive Dentist Podcast. Um, what we’re going to talk about today is I hear from a lot of dentists that I want to grow my practice. I want to have a 2 million. practice. I want to have a 3 million practice like my buddy over here or somebody else. I want to be like Mike. I want to be like so and so. The bottom line is what I’m going to share with you are the things that will make that happen and make that happen very, very rapidly. First of all, you need to, in my opinion, do comprehensive exams. That doesn’t mean that you can’t do bread-and-butter dentistry.

[00:02:26] Dr. Bruce Baird: You know, a lot of dentists who don’t have a big service mix still do quite a bit of dentistry because of their new patient flow. Healthy new patient flow is, is important. Now, you can have two types of new patient flow. Part of it comes from if you’re signed up with a lot of PPOs and that type of, in that type of an environment. Those patients basically are coming in for cleanings and for fillings when they need them, maybe a crown here and there, and they’re going to send you 50, 100 people, and you’re going to take a discount on your fees. Now, when you first came out of dental school, and you opened up a practice, on your own, then new patient flow is great. I don’t care what they need. I’ll just, I just need cash and I need it now but that philosophy needs to change and it can change very rapidly. If you’re in a situation where you’re going into a high growth area, you know, having a nice facility, and, you know, setting up, you know, setting up marketing for your business is critical. I would say, and we talk about net zero marketing. Net zero marketing is marketing where you literally are spending 8 percent of your previous month’s collections on marketing every month. Now, the average dentist in the country is marketing at about 1%, one and a half. They’re signed up with, you know, 15, 20, 30 different plans and their fees are being reduced by 40 percent plus and all you have to do to figure out is look at your adjustments. That’s now the largest overhead item in dentistry is PPO adjustments. That is a figure that you are reducing your fee in order for them to send you patients and those patients are costing you 40 percent or plus.

[00:04:15] Dr. Bruce Baird: Uh, so just figure that number out and for them to bring you patients, you’re spending whatever your PPO adjustment is. Now, what I would prefer is to charge my full and customary fee to people who want to pay for it at a full fee and how do you do that? Well, part of that is branding. Part of that is creating your brand of your business and your practice, which that’s what marketing can help you with and net zero marketing is a philosophy where if you’re marketing 8 percent and you used to market at one, one and a half percent. You would say, “Oh my gosh, that’s another on a hundred thousand dollar practice. That’s another 6, 000 a month. I’m going to spend on marketing. Where am I going to get that money?” Well, which comes first, the chicken or the egg? Well, first of all, you have to begin doing the marketing. So plan that in your budget, put it in your budget as you do. What you’re going to find is your variable expenses go up. Uh, if you’re doing 100, 000, you’re spending 8, 000 a month on marketing, and your supply costs are going to be, say, 5, 000, 5%. Now you’re doing 200, 000. Well, your supply costs are going to go up to 10, 000. Your marketing has got to go to 16, 000 and your lab bills, you’re doing more crown and bridge, you’re doing more comprehensive cases. So you’re growing that variable expense. It goes up based on what you collect and how much you produce. It actually goes up based on what you produce, not what you collect. So the more you produce, the more those variable expenses go up. Now, some people say, and we have people that come to Productive Dentist Academy that have been, that have 30 percent team overhead, 32%, 33 percent team overhead. Uh, and.and they wonder, “Should I fire somebody, or what do I do?”

[00:06:03] Dr. Bruce Baird: I can look at them straight in the eyes and say, “Well, we need to produce more. We need to produce more dentistry,” and that drives those costs down. Uh, well, how do I do that? Well, comprehensive exams. Use of risk factors when you’re doing your examinations. You know, you can do a lot of dentistry without a lot of technology, so it’s not really technology-based but when you have a healthy new patient flow and you do something called authentic marketing, which means you’re marketing to things that you actually want to do, not the things that a PPO just happens to send you, then all of a sudden you begin to see your fixed expenses, for instance, You’re building, you’re building costs. Let’s say you’re spending 10, 000 a month. When you first start out, your building costs are going to be much higher and your equipment, your building and equipment costs are going to be much higher. So when you’re doing 100, 000, let’s just say that’s at 10, 000. That’s 10% but as you begin to market your 8 percent marketing budget, all of a sudden you begin to grow and now you’ve grown to 200, 000. But guess what? Your equipment and your facility expense are still the same 10, 000. So it’s gone from 10 percent to 5%. When you get to 300, 000 a month, which can be done very easily in today’s environment, 300, 000 a month, which is almost a 4, 000, 000 practice, guess what? Your facility expense and your equipment expense goes still around 10, 000. Now it’s at 3%. Well, remember you went from either not marketing or 1. 5%, which is the national average, to 8%, which is about a 6. 5 percent difference. Your fixed expense is just on facility expense alone, um, covers the cost of your marketing and really interesting because your team overhead now has gone from 31 percent down to 20%.

[00:07:59] Dr. Bruce Baird: That’s 11 percent reduction in your overhead. You wonder, “How do I become profitable?” You become profitable by doing procedures you love to do by having a healthy new patient flow that needs procedures that you love to do and all your other costs start to come into line. You know, your lab, if you’re doing high end implants or, you know, really full mouth reconstruction, your lab bill’s going to be a little bit higher than somebody who’s just doing a crown of the month clip. Uh, and so that’s okay but as you follow what you’re going to find, and as you follow the philosophy of net zero marketing, you’re going to grow this business, uh, you’re going to find your expenses drop, they don’t go up. You’re going to find you’re doing dentistry on your term, the dentistry you love to do and people always say, “Bruce, how do you, how did you go from four and a half days a week during 2 million to two days a week doing two million dollars?” Authentic marketing. It was specific to the things that I really wanted to do now I didn’t want to do just implants and I didn’t want to do just cosmetics I wanted to do and I’ve told talked about this in marketing before I wanted to do train wrecks I wanted to be able to help people that really needed dentistry. So my marketing budget focused on that. Not a hundred percent, but by the time we got to 400, 000 or 500, 000 a month in revenue, I mean, we’re spending 40, 000 marketing. That gives me the opportunity to do pretty much whatever kind of dentistry I want to do. Also the thought process that if you’re a family dentist, okay, if you like doing ortho, Great. You like seeing kids? Great. These are all things that you can have a 4 million practice doing and so you’re going to authentically market towards those things that you love to do. I personally like seeing patients over 55. Why? Because, I don’t know, most of them need more dentistry than a 25-year-old. Uh, they have more money than a 25-year-old and they have an understanding of dentistry a little bit more because they’ve been around for a while and most importantly, they don’t have insurance. “Why is that good? They don’t have insurance, Bruce.” I don’t care if they have insurance. Insurance is just a method of payment. Insurance is simply 1, 500 they happen to have in their pocket we can use. That’s it. I don’t count insurance as anything else. Now, if you’ve started your business and you’re growing it and you’re in 20 PPO’s, that’s fine. You still can convert to a fee for service. type practice, it’s going to take you three to five years. That’s okay. You’re going to be practicing probably for 35 or 40.

[00:10:43] Dr. Bruce Baird: So the sooner you can transition, the better. You start with the least valuable plans, the ones that you’re not using the most, getting out of those and then finally, this is happening more and more now in dentistry. Finally, you are moving towards, uh, a fee-for-service practice. That doesn’t mean we don’t take insurance. We take regular indemnity insurance all the time. I’ll file it for him. You know, we’ll take assignment on it. I don’t care, but what I’m not going to do is reduce my fees by 40%. to do dentistry for a marketing company that’s going out and signing up other patients. I’m just not going to do it and would I do it early in my career? Possibly. Might need to. So, you know, the question, “Bruce, how do I build a three, four or 5 million practice?” It comes down to doing a comprehensive exam. It comes down to doing, doing what the patient needs. It comes down to having the verbal skills to be able to request of the patient that can I take a look at all your teeth. Uh, and having a philosophy that, you know, “Bob, this is what I’d do if it was me in my own mouth.” As you do this, and as you began marketing at your 8%, your net zero marketing budget, what you’re going to find is growth happens, satisfaction happens. Now you’re going from four and a half days a week to four. You might go to three and a half days. You might go to three. You’re now bringing in revenue-based, uh, great procedures that are high profit and now you’re thinking to yourself, “Gosh, I’m getting to spend time with family. I’m getting to spend, I need an associate now.” I’ve seen this happen over and over and over again in dentistry and the docs that we’ve helped and we’ve coached at Productive Dentist Academy have routinely gone from 800, 000 to a million and a half to two and a half to having a new facility, to bringing in an associate, to bringing in a second associate. Less, less time worrying about, uh, less time worrying about the business. When the business becomes successful, and that’s what we coach, the more successful you become, the less stress you have. The more time you have to spend with family, the more satisfaction you have and I just see so many dentists that are unsatisfied, but they don’t really have a plan and they’re not willing to move forward with advice from others and that’s always the sad, that’s the saddest stage when some, when a dentist just is working and working and working. Five days a week, six days a week, I see it posted online all the time.  I thought dentistry was going to be easy. Dentistry can be extremely satisfying. It can be very, I’m not going to say it’s easy, you know, nothing worthwhile is easy, but it can be something where you’re spending more time with family, making more money than you ever thought you could make. Um, having a team that’s, that’s more like a family than anything else. That’s how you grow a business and so hopefully this has hit, hit home in a few areas for you, but, uh, I’m looking forward to our next podcast.

[00:13:51] Dr. Bruce Baird:  Thanks again for voting us number one podcast in dentistry this past year and look forward to the next one. Thank you for joining me for this episode of the Productive Dentist Podcast. If you found this episode helpful, make sure you subscribe, pass it along to a friend, give us a like on iTunes and Spotify, or drop me an email. at podcast at productive dentist. com. Don’t forget to check out other podcasts from the Productive Dentist Academy at productivedentistpodcast.com. Join me again next week for another episode of the Productive Dentist Podcast.