Dr. Roger P. Levin brings you the most thought-provoking topics from the Dental Business Study Clubs, an organization focused on the business of successful dentistry. Each month, Dr. Levin will explore an aspect of the business of dentistry in detail.
In the business world, there are four proven and accepted ways to build any business, and these certainly apply to a dental practice. Practices that want to build their business should take advantage of one (or more) of the following options with an understanding that each poses a different set of challenges and presents a different degree of difficulty and risk.
4 options
The options range from easy and less risky to those entailing greater risk.
1. Increase existing services with existing patients
Roger P. Levin, DDS, is the executive founder of the Dental Business Study Clubs.This option is the easiest and least risky. The existing patient base knows and trusts their dentist and dental team and are the most likely to accept recommended treatment, pay for it, and appreciate the care they receive.
So, the main job here is to know what you do, do it well, and make sure every patient knows you do it. Begin by analyzing key factors, including the following:
- Which are your most frequently performed procedures?
- What is the average production per patient?
- What is your number of active patients?
- How many overdue patients are on your books?
- What is your annual patient attrition rate?
You will quickly find which performance indicators are on target and which ones are underperforming. You can then take immediate action to increase production on services you currently offer with the patients you already have.
2. Increase existing services with new patients
There are several ways to provide current services to a new patient base. This is slightly harder than the first option, but the risk here is relatively low because the doctor and team already have the expertise. It becomes a matter of determining the best route to take in offering those services to new customers.
One good way of providing current services to new patients is to create a robust marketing program to increase the number of new patients coming to the practice. Once new patients start coming in, they will expand the patient base, require more dentistry, and have an average production that is higher than that of current patients.
Another way is to open an additional practice. Many dentists are expanding the number of practices that they own in the hope that by offering current services to new patients in an additional office, they will increase overall production and have higher income. For many dentists, this has been highly successful.
Another way to adopt this growth strategy is to purchase the practice of a retiring doctor. This would add an additional patient base into an existing office, offering the opportunity to sell more of its current services to all of these new patients.
3. Increase new services with existing patients
When practices add new services, it is an excellent opportunity to increase practice production. Whether it's through continuing education, the addition of an associate, or the emergence of a brand-new service category, the practice has the opportunity to periodically offer additional services to current patients.
When properly introduced and marketed, these new services will allow the practice to realize an immediate increase in practice production. I have actually seen practices increase production 15% to 25% in the first year using this strategy, depending on the new services offered and how well they are communicated to the current patient base.
As a simple and obvious example, we have advised many practices to introduce periodontal diagnosis and initial therapy. According to the Levin Group Data Center, 71% of dental practices do not probe and record pocket depth annually. Many patients have some level of gingival or periodontal disease, so the simple introduction of periodontal diagnosis and initial therapy can have an immediate impact on practice production. The same is true for many other services, such as sleep dentistry.
Current patients trust the practice and are willing to consider having new services performed as needed. The risk with this approach is that new services come with a learning curve. The practice must have the time, and in some cases the money, to master the technique and consistently produce excellent results.
4. Increase new services with new patients
This is the most difficult and risky of all four options because the dentist must gain both a new level of experience in order to administer a new service and a new level of trust from a new patient base. The most extreme example of this would be to open an additional office that highlights a new service to a new patient base. It's like starting a brand-new business from scratch. The practice would offer all of the current services, plus a new service, to a new patient base.
Understand your options
All of these options offer dental practices great opportunities for growth and expansion. Understanding each of these options, their level of risk, and how they will affect practice production can help dentists to make choices that lead to ongoing practice success.
Roger P. Levin, DDS, is the executive founder of the Dental Business Study Clubs. To contact Dr. Levin, or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit www.levingroup.com or email [email protected].
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.
