Episode 24 – Deeper Dive: Optimizing Your Dental Practice

“That sense that you’ve plateaued but know that there is more…that’s what tells so many of us our practices aren’t optimized.” ~Dr. Victoria Peterson

My most recent guest Dr. Nikki Green knew her practice wasn’t optimized because of her feeling that there was more she could accomplish in her business. There was a drive for the next level, but as so many dentists find, she didn’t know how to take that next step. 

The truth is you may be resting on a plateau. This is very normal. You’ve won the race to revenue, and you can be tired and ready for a break. This is totally fine. But as so many business owners find, you may have a nagging sensation that there is something more you could be doing in your practice. Your next level is waiting…but how do you get there?

Join me today as I drive deeper into the thought processes Dr. Nikki used to optimize her practice so you can use those same strategies as you create your Investment Grade PracticeTM:

• Get super clear on your career goals
• Learn what optimization means for you
• Traps many smart entrepreneurs fall in to (and how to avoid them)

Interested in the business calculator Dr. Nikki Green and Dr. Peterson talked about? Click here to use the completely free Investment Grade PracticeTM calculator: What’s my IgP Freedom Number?

Want to have a conversation about your Investment Grade PracticeTM? Contact Brent at brent@productivedentist.com.
Never miss an episode! Subscribe to Investment Grade PracticesTM Podcast on iTunes & Spotify.

EPISODE TRANSCRIPT

Victoria Peterson
What an amazing conversation with Dr. Nikki Greene. She had so many golden pearls from the takeaway. I’m not even sure where to begin. But I think the piece that caught my ear the most was the concept of optimization and for many of us as business owners, we’re so in the weeds of day-to-day surviving the day we’re looking at our p&l is month to month, maybe we’re looking at the bank accounts and the cash flow and if cashflow feels good, we feel good. If cash flow is down, we feel down. But how often do you stop and ask the question, Am I optimized? and I love that where Nikki was at 2.5 million for a solo practitioner, I think she had a one-to-one associate in the practice as well. That is a highly functioning, highly productive dental practice and most would not even stop and say I’m at a plateau. So how do you know that you’ve plateaued in your practice, whether that’s $1,000,000.02 million dollars or $8 million, I think it comes down to this internal sense of challenge and what we believe we’re capable of. So businesses expand to our vision, they expand to our capacity to lead. They also shrink by a lack of vision and the lack of capacity to lead or proper management pieces in place. So the topic of optimization, particularly before you sell your practice. Now at the time that Nikki began working with us in 2016, so that was good six years ago, she was in her mid to late 30s. Not thinking about selling at all and I know many of you are in that boat, the mid-30s, early 40s, maybe late 40s. I’ll tell you this is the prime target for private equity in dentistry right now. Prime doctors who are in their prime, who are cash flowing well, are investable, and you’re getting a lot of unsolicited offers.

It’s really interesting in my decades in dentistry, there are always unsolicited offers, that will never change. What you’re being solicited for is what’s changing. So before this, it was SEO, your computer, your website needs to be optimized your web presence needs to be optimized. Prior to that, it was software, or you still scheduling on paper, we need to update and upgrade your software. So there are always market forces that come knocking on your door. Because dentistry is a target-rich environment because the profits are consistent and the margins are large compared to other things like retail which might have a 3% margin. So understanding where you’re optimized before you sell is the key to sometimes doubling or tripling your wealth in retirement. It’s not a step that savvy business owners skip, they ask the question, Am I doing what I’m doing? Because it’s what I’m comfortable with? Because it pays the bills because I have the lifestyle I want? Or have I fully optimized my practice in spite of myself? So if you’re working three and a half days a week and the practice is closed two days a week, then no, you’re not optimized. If you’re working six hours a day instead of eight to 10 to 12. No, you’re not optimized. Do you as a practitioner have to work all those hours? Absolutely not. But should you as a business owner, be thinking about how to optimize your facility without a doubt?

When you start looking on the next horizon, the question of how do I grow to great Victoria and we agree with you we want to optimize but how I think it really does come back to the fundamentals and I remember when I was working with Tony Robbins he would tell the story of coaching Andre Agassi and some elite athletes and he said it always comes down to the basics. When you’re off your game, you don’t worry about you know slamming the net or dunking the ball. You come back to forehands and backhands and forehands and backhands and you go to the golf course and you hit 100 balls in a bucket before you play your round. So the basics of business and optimization prior to selling is a systems audit. Where are your systems predictable? Where are they not? Where do you get mixed results? If they’re predictable? Are they predictable? Because a particular person, perhaps a long-term employee is doing that job? Or are they predictable in almost anyone’s hands? That’s what makes a system durable. When Nikki talked about having been at this crossroads, I knew that I wanted to create a self-directed team. I knew I wanted to be the leader of leaders, not the manager of people. Those are clues of a visionary who is really building durable systems and that’s the key to optimizing everything you do. So that’s a great takeaway is to go back and if you don’t know how to audit your systems, reach out, our coaches can do that for you. But get a checklist of your critical systems like scheduling, revenue cycle management, where are we leaking money? Where can we be more efficient? Where do we have redundancies or wasted time that can be tightened up? That’s a great first step in optimizing and Nikki said that I was at 2.5 million.

I try, I threw everything at it, I threw coaching, I threw associates, I threw partnerships, I did marketing, I did everything couldn’t get off 2.5 million, came and learned how to reorganize my schedule, and massively improved productivity. That one change took her from 2.5 million to 3 million, that one change. So it doesn’t have to be a lot to have a great big improvement. One of the things that Bruce and I have learned over 18 years of working with doctors is that your game is not anybody else’s game. So optimizing also has to do with life balance, particularly, you know, as you’re looking at seller readiness, is this the time why or why not Nikki’s 44 years old, and she said I love running my practice, I love being in charge and this is an opportunity to take some equity off the table. It’s the right time, because of where I’m at, in my marriage, my relationship, my husband’s a dentist, we work in two different towns, it would be nice to be together and so she had a very specific lifestyle choice that she made. She also chose a buyer that allowed her to stay in control of a lot of the management decisions because that is high on her core values and her skill sets. Now you may be looking for a buyer persona that is quite different. You may say I don’t like the management, I want somebody to take this off my hands. So your buyer persona may have to include a younger doctor who wants to come in and buy you out, they want to build that same lifestyle that you have and they’ll take over the management, or a private equity group that will bring in structured management, or a private group that has structure and oversight in it. So your buyer persona really does determine a lot of when and to whom you’ll sell your practice and getting those in place. Now having multiple

buyer personas that you would be willing to sell to helps broaden the scope of the sale and can really make a big difference in the end. The other piece that Nikki really brought to light was value. So optimizing onto the top end, we always think about optimizing systems or productivity collections, minimizing PPO, write-offs, those kinds of things when we think about optimizing, but the number one thing she did was she optimized the bottom line of her practice, she focused on peeing on the p&l she paid attention to, as my ROI hygenist fully booked Am I overstaffed, she paid attention to where my supply budget is going. She paid attention to the continuing education that she went to I made sure that whatever they invested in, they implemented. You’ll also note in her story that she grew a million dollars over a year during the pandemic. That was not the story of every practitioner. So her team was poised to quickly pivot and say absolutely we’re open for emergencies if you’re in pain, calm and while you’re in the office, boy, I don’t know when you can get out again if you want we can do a quadrant or a whole mouth or half mouth. So I know state-by-state regulations. We were Different during the pandemic. But when you’re focused on how do I drive revenue? and how do I drive revenue to the bottom line, here’s, here’s a formula that you can use.

And I know this be a little difficult to visualize if you’re a visual person, and you’re listening to an audio podcast is a little difficult, but I want you to check this out. If you raised your revenues by 10% You would automatically increase your take-home pay by 20% if you decreased your overhead by 10%, you would raise your take-home pay, if you do both, if you grew 10% on the top, and you shrank 10% In your expenses, you would net doctor in your personal take-home pay an additional 40%. So play that game. If you’re currently taking home 200,000 You could easily take home 280,000 just by pushing those two levers. How do I incrementally grow 10% while simultaneously decreasing my cost by 10%? small incremental changes over time are really what win the game when it comes to building an investment grade practice. Warren Buffett talks about this a lot in value investing, you want to become that company that is profitable, in spite of the economic trends around you. You want systems that are durable and predictable people that are engaged, and on your team. These are the things that build an investment great practice. I’m so grateful to Dr. Nikki green for coming on and sharing her story. Vision, her story of enthusiasm for her team, her patients, and her business. She is passionate about what she does and so I hope that you’re as inspired as I was to have her on the show. If you’re looking to build your investment grade practice, thank you so much for listening in, you can reach out to Victoria at productive dentist.com I would love to speak with you and help you build your investment grade practice.

I have a question for you. It’s the end of March your CPAs preparing your first quarter financials? Are you excited to see the result? Or do you have a little bit of hesitancy wondering if you’re profitable enough to sustain the business and move it forward? You see a productive dentist Academy we know that looking at a profit loss statement and looking at budget versus actual can be daunting and that’s why 18 years ago, my partner, Dr. Bruce Baird, and I created the Productivity Workshop. If you’re wondering, what are the benchmarks for my practice? and how do I move my practice forward? How do I clearly articulate my vision and the passion that I have? So that my team wants to join me? In this endeavor? How do I elevate patient care so that I’m not at the mercy of insurance limitations? These are all things that we cover at our signature productivity workshop. Our next one is September 22, through the 24th in Frisco, Texas and I certainly hope that you and your team can come and learn the exact tools that we not only have shared with 1000s of dental practices across the country, to help them be successful. But they’re the exact tools that I used in my own network of five dental practices. That helped me create a sustainable legacy company that is thriving today. So to make things a little bit easier, as you’re looking at your p&l and wondering, is this a great time to invest in myself and my team, if you sign up during the month of April, this gives us plenty of time to work with you between now in the September workshop.

You won’t have to wait another few more months to get the benefits of signing up. So sign up in the month of April, and we will open up our PDA online program. It’s a recording of a previous PDA workshop, you’ll have access to a full year following our workshop. You will also have a complimentary to our business session with some of my top business coaches every day of the week. They are helping doctors build investment grade practices, building the value of their business, securing the system so that they are durable and it’s our gift to you to work with one of these high-level coaches to identify opportunities before you come to the workshop. We did this in February and I will have to say that the doctors who took advantage of it, we’re sharing stories that they were already up to $50 an hour $100 an hour $200 an hour. So here’s the challenge right now. Pick up a pencil right On the number of hours that you work per month, let’s say 114. Multiply that by 100. Now, what could you do with an extra $11,000 per month? If you’re ready to get started on the journey, I encourage you to check out productivedentist.com You can reserve your spot by going to productivedentist.com/workshop and get in touch with our team and see what we can do to help move you forward.

Narrator
Thank you for tuning in to this episode of Investment Grade Practices podcast. If you find value in this episode, help us spread the word by passing it along to a dental friend. Subscribe and give us a Like on iTunes or Spotify. Learn more about building your Investment Grade Practice at productivedentist.com today.