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It’s exciting watching your practice grow but it does demand some vigilance from you and not just leaving the process of expansion to chance. By John Burfitt
Sometimes it happens as part of a bigger business plan, other times it’s the natural result of an increase in demand from patients. Either way, a growing practice requires significant attention to keep everything on track for success.
As a practice grows, different issues can arise that demand solutions to avoid bigger problems later on. It is during this time, advises practice management specialist Ameena Basile, that the business owner cannot afford to take their eye off the game.
“This is when you must monitor everything and know what is going on in every part of the business,” Basile, founder of Dental Management Expertise, says.
“Doing this will quickly identify what are the strengths and weaknesses emerging as you’re going through a period of growth. When you do find weaknesses, then you can act upon them swiftly before they get out of hand.”
Of the many dental clients Basile has worked with, she reveals the biggest problem she’s observed in a practice that’s having a growth spurt is that the owner does not have adequate advice or direction.
“It’s usually the ones who have the best technical and clinical issues but little real business knowledge, and they simply wing it as they expand the business as they really don’t know what they’re doing,” she says.
“They would have been in a far better position with the process if they had the right advice from a consultant or a trainer or a coach to help monitor each step along the way.”
She says essential areas that must be monitored are cashflow and expenses. “Some people get too excited when more money starts coming in, and then spend up big only to find there’s nothing in reserve to pay the expenses when things slow down later on. All those extra dollars don’t necessarily mean a bigger profit margin unless it’s closely managed.”
Making sure the house is in order from the very outset creates a firm foundation for the business to expand upon, says Aspect Legal lawyer Joanna Oakey, the author of the new book Buy, Grow, Exit.
“Too often I hear from people that the one thing that tripped them up was they didn’t keep on top of understanding their legal exposure as they grew,” she says. She cites as one example not securing the lease of the business location before putting any resources into growth.
“The premises need to be locked in, because it’s going to be a major issue that will possibly cost hundreds of thousands if you have worked hard to expand the business, only to have the landlord one day pull the lease on you. And yet I know business owners who have had this happen to them and it’s caught them off guard.”
“Some people get too excited when more money starts coming in, and then spend up big only to find there’s nothing in reserve to pay the expenses when things slow down later on. All those extra dollars don’t necessarily mean a bigger profit margin unless it’s closely managed.”
Ameena Basile, founder, Dental Management Expertise
The importance of keeping a happy team should also never be underestimated. Oakey says there is truth in the business adage that a strong team is the most valuable asset of a business.
“Value starts with the staff, and staff attraction and retention ultimately becomes one of the most important aspects when it comes to growth,” she says. “If the practice is growing, the staff need a clear idea of what that means for their role and ultimately any rewards. It might be a pay rise, it might be a bonus scheme or it could even be equity in the business. To keep everyone happy, and clear, this must be established well before you have an increase in new people—staff as well as patients—coming through the doors.”
Australian Dental Association vice-president Dr Stephen Liew is a partner in Melbourne’s Camberwell Dental Group, which has expanded from three to six chairs across two locations over the past few years. That growth period, Dr Liew admits, was made far easier as most of the right policies and processes were in place from day one.
“You need to have established systems and policies that are clearly disseminated to new staff through a solid induction process,” he says.
“You also need a culture statement clearly outlining the standards expected from everyone within the practice, and finally, a good oversight assessment process that reviews the adherence of all this across the business.
“Not all these systems existed when we first started to expand, and we now realise some of them were essential and would have made everything far easier.”
Maintaining the quality of care and patient experience—the very qualities that made the practice a success in the first place—cannot get lost in the growth process, Dr Liew adds.
“This is non-negotiable and patients should not feel disrupted or that their experience has been diminished as a result of your growth. That is a sure-fire way to lose their loyalty if, when they come in for a visit, they feel the standard of service they once relied on is no longer present in the expanded business.
“Growth should not come at the expense of quality of patient care or retention of them as repeat patients.”
Most importantly, putting a focus on patient demand is crucial before one cent is spent on growing the business. Dr Liew warns any grand ambitions of wanting to expand the business need to be balanced with a clear analysis of whether there is actually a need for a bigger practice.
“Simply, you need to know the demand is there in the first place and you are catering to what your patients and the market wants, rather than your own big dreams,” he says. “During a period of growth, keep a check on your plans. There’s no point in dropping $150,000 on multiple new rooms when one extra chair is all you ever really needed.”
