Either Inherit or Earn
My father was a school teacher, and my mother was a homemaker. When I was still a rather young lad I realized that there were other children whose parents had more money than mine…and, there were those with less. It hardly mattered in our small town, but those on “Snob” Hill did find some things a bit easier, I guess. Still, until I became a bit older and realized that everything I needed/wanted seemed to have a price tag, I didn’t really pay much attention.
Then, at age 12 I got my first job working for a neighbor, Farmer Bassett, mowing fields, chopping corn, and other assorted farm duties. I remember he told me that he would pay me six bits an hour, and I had no idea how much that was. Well, that was about 30 dollars extra a month for only working 10 hours or so each week, and I liked him and his farm. I probably would have worked for less…maybe free. So, it was a great situation, and I had a little extra money to buy soft drinks and save for a car and college (not my idea, as I recall).
They flooded Mr. Bassett’s farm when they created Lake Ray Hubbard outside Dallas while I was in High School, but I had moved on by then to pumping gas (about 23.9 cents a gallon then) and checking oil at the County Line Service Station where the pay was a bit better and I could get a 10% discount on gas for the 292 V8 gas-guzzler in my 1955 Ford Victoria. I had come to realize that while my family had given me wonderful gifts, money would have to come from my own earnings, and I began to like having the things money could buy.
A brief venture into college football proved that my future was not in professional athletics, so I concentrated on my education. I worked throughout college where I met some incredible entrepreneurs like Ross Perot, spent time in the service, and later moved up rather swiftly into upper management including a time on Wall Street. Sadly, I got overawed by the hypnotic attraction of money, and I earned a great deal and lost a great deal…in relationships as well as money.
There is a point to this little stroll down memory lane, I promise. First, I learned that there are many, many things more important than money. That, however, is a subject for another time. And, no matter how much we want to do things simply for altruistic reasons, the mortgages must be paid, food must be purchased, colleges expect their tuition, and almost everything else has some sort of price tag. We must deal with money effectively regardless of our not wanting to be controlled by it. Tragically, in my almost 20 years in the dental industry, I have observed that this is one of the biggest problems for many dentists. Dentists make a lot of money, relatively, but they also waste a lot of money.
Dentists and Money
Some dentists have a knack for such things, so this is not meant for them. Honestly though, that is not really a large number. Others pay someone else to manage their money, and I would quarrel only that it is not that difficult to do adequate bookkeeping, and some of the prices I have seen for such things are almost criminal. Though, even with these atrocious charges, I guess it is better than not understanding…and not properly handling money.
For the vast majority of dentists, money is managed poorly by themselves, a spouse, or an employee. So much is improperly spent and wasted, that dentists as a group could provide free basic dentistry throughout Latin America (or some other worthy pursuit), if they more effectively handled the money they earn. (That is my estimate by doing some quick arithmetic, so it is subject to discussion; though the point is still valid.)
Dentists, even those not in the top tier, earn in the upper 2% of people in the world, and many are in the top ½ %. Yet, their financial management skills are rudimentary, at best. There are reasons for this, some rather valid. First, dentistry is not about money for most dentists. Most dentists are caregivers first and foremost. Pre-dental courses are almost always science-oriented rather than business-oriented. Few dentists enter dental school with a degree in business, and dental schools have a full four years of clinical education to cover. Credit is extremely easy to get for a young dentist, so he/she can get too deep really quickly. They can borrow much more than they should. Then, those who own their own practices discover that practice ownership carries with it another enormous financial management burden. It costs a great deal to begin and operate a dental practice providing the type of dental care that dentists have learned in school.
Unless there is some financial management skill introduced early in life, it must be learned along the way by dentists. Yet, along the way there is a great need for continued clinical education. And, even the training of childhood cannot really prepare anyone for being a business owner. Is there any wonder that so many dentists are not good money managers?
Dentists have problems in two areas with money. They have trouble with their personal income and they have problems with their practice income. Solutions from accounting and bookkeeping firms are oriented toward one or the other, and the companies which work with both as a unit are exceedingly expensive. Yet, this stuff is not rocket science, if a few simple steps are taken.
I am going to try to clear up some of the mystery with this short message, but I will run long, so I will have to ask the reader to click into our website for the final portion. Click this paragraph to be taken there automatically. Don’t worry, I am not trying to sell something, I just want to finish the entire subject. Thanks.
Financial Status Evaluation. Actually, you cannot decide how to get where you want to go unless you really know where you really are. Suppose I want to drive my car from our office in Tampa to our office in Minneapolis (bad idea, but bear with me). I wouldn’t have a chance of picking the right roads, planning the trip, calculating the cost, or estimating an arrival time if I simply said I am leaving from Florida. But, by starting with my address from here in Tampa, I can precisely choose the right roads, etc. Now, I don’t actually have to have the final destination until I get a bit closer, but I do have to know where I am beginning.
Admittedly, it is a bit harder to collect all the information to know where you are financially, but for proper planning it must be done, and there are easy ways to do that. I know it is a bit scary, like looking in a teenage son’s closet, but ignoring where you really are financially is a recipe for disaster. It is particularly important to prepare for downturns in the economy.
Realistic Budgeting. This idea is so odious to so many people that the word budget itself is almost a curse word. Well, if anyone is still with me, let me explain why the idea of budgeting should not send shivers down your spine. Too often a budget is used as a weapon to restrict spending with violations leading to arguments, stress, and massive guilt.
After 20 years working directly on a day-to-day basis with dentists I can attest that dentists and their spouses almost universally dislike (and delay or avoid completely) the process. Most of us do not want to face how much money we spend on a monthly basis because it exposes our waste, errors in judgment, and weaknesses. Forget all that. It is your money, and you struggled through eight years of school, accumulated student loan debt (usually), acquired even more debt to begin the practice, and have overhead that is a constant monthly pressure.
Budgeting is not about controlling realistic spending. Dentists earn a great deal normally, so they are not supposed to live like a college student or someone who has less education and reduced expectations. A budget should be crafted with reality and an understanding of human nature, so that it does not lead to marital conflicts, or a suppression of the good things in life. It is true that a dentist is not likely to own a personal jet or a villa on the Riviera. However, with earnings in the top 2%, at least, a nice home, regular vacations, club memberships, etc. are definitely allowable while still saving for the future.
A budget is not a restrictive covenant, if it is realistically prepared and regularly updated for changing conditions. It should be a document of comfort…not stress.
Continuous Tracking. Okay, let’s go back to my trip from Tampa to Minneapolis. I have planned the trip, but I still have to watch where I am at all times to make sure I have not gotten on the wrong road. Likewise, we have to keep our bookkeeping properly and professionally recorded to be sure we are on track. In addition, the IRS (or other governmental taxing agency) will shut you down, if you do not have good records.
The best way to do this is to have a close relative (like a spouse or yourself) keep the books on a software program like Quickbooks. I am a little leery of using an employee because that can lead to problems more often than not. 90% of embezzling is done by an employee who is trusted with too much knowledge of the financial situation. An attitude of entitlement seems to creep into their heads especially if they are struggling financially. It is hard to see the doctor earn hundreds of thousand a year while you earn $15 an hour. The cost of schooling, establishing the practice, monthly obligations, legal liability, etc. get conveniently forgotten when someone gets too close to the doctor’s finances. Beware of who you allow to do your bookkeeping.
The bookkeeping can be sent out to a bookkeeping service. Many local ones are reasonably priced and can provide usable reports (if properly directed). This process inevitably escalates costs and often they present themselves as accountants charging accounting fees when all they really provide is simply bookkeeping services. You need an accountant to file your taxes and provide tax advice, but you do not need an accountant to enter data into Quickbooks. Still, it is a way to keep the books current. I have seldom known a dentist who is comfortable with the reports he/she receives from these services, but that can be improved, if they are properly instructed.
Timely Updates. As the Scotsman Robert Burns said in “To a Mouse”, “The best laid schemes o’ mice an’ men / Gang aft a-gley”. So, no matter how well a financial plan is devised it must be altered appropriately along the way as unforeseen events occur. This means understanding the original plan, diligently and regularly watching its progress, and adjusting when circumstances dictate. Had I not done that in my lifetime with my career, I would be a very unhappy NFL wannabe, failed politician, bankrupt high tech entrepreneur, etc. We cannot always predict conditions for the future, and we cannot be sure we will have the same goals. We will change, circumstances will change, and our financial plans must change.
Information For Appropriate Decisions Along The Way. This is more of a catchall to include things that happen about which we must gain in-depth knowledge so that we can make decisions about them. For instance, we may need to increase insurance coverage, purchase a beach house in order to improve our quality of life and keep the family together, increase the size of our college funds for a child who wants a PhD in 18th century Scottish poetry (never going to be able to make much money), or accelerate retirement plans due to ill health or changed priorities.
We must be able to find resources for the right information and counsel for decision-making on major issues. Knowledge is power, so we need to have access to as much as possible in areas with which we may deal only once in a lifetime. We cannot be experts in all subjects, but we can know where to find the experts. That is the key.
Summary.
If you inherited $10,000,000 from a great-aunt in Buffalo, or whatever, this is not a very important discussion for you. But, if you are like the rest of us, who will have to earn every penny ourselves and preserve as much as possible, you need to be realistic here. Do not ignore good financial management and planning because it is scary. There are some “experts” out there who are predatory, I admit…and I hear about them every day it seems. But, there are good, honest, helpful resources, too.
Call or email, if you have questions. I have provided some links for a few items to help, but I am happy to discuss your personal situation with you.
Kicking the Devil out of the American League.
Okay, I am going to do it. I am going to brag on the Tampa Bay Rays.
The Tampa Bay professional baseball team has been in existence for about ten years. Truthfully, I can’t remember exactly how long because they have been simply awful and forgettable…since the beginning. New teams have started and won World Series, but one thing was always consistent…the embarrassingly bad Tampa Bay Devil Rays would occupy the cellar in the AL East.
This past season they decided to change from the Devil Rays to the Rays. Now, that is a small step, if ever I saw one. Oh yeah, they finally solidified a pitching staff of great promise. It is now mid-May and the best record in the American League belongs to Tampa Bay. They are leading in a division with such storied franchises as the Yankees, Red Sox, and Orioles. I know it is highly unlikely that this will last all season. Their payroll is about as much as A Rod and Jeter combined, but last night Yankees owner Steinbrenner said his team needs to be more like the Rays.
There was a local cartoonist who drew a picture of hell freezing over, and I think that about sums it up. We’ll enjoy baseball until reality sets in, I guess. And, who knows…maybe?
Have a great week,
L. Hurston Anderson, PhD
Can Good Practices Become Great?
For about fifteen years now I have been analyzing dental practices with the ultimate goal of helping dentists to improve their businesses. In simplistic financial terms all these hundreds of dental practices could have been categorized as shaky (i.e., struggling to make ends meet, doctor inadequately compensated), good (i.e., solidly performing, doctor and staff compensated adequately), and great (outperforming 90% of comparable practices in the area, doctor has tax and investment issues). Sometimes, I am reprimanded for discussing success in these essays in terms of financial performance to the apparent exclusion of other factors such as quality of care, staff morale, contribution to the community, and personal fulfillment. I would again state that these things are not mutually exclusive. All who succeed financially will only do so over a sustained period with the acceptance of the community, a reputation for excellence in care, and a willing and eager team.
Many of our clients had been in the shaky financial category with the need to reduce the financial strain as quickly as possible. Many had even used credit cards to pay our monthly fees the first few months while the transition was taking place. Since reducing expenses is seldom an option, an all out effort to increase income while not increasing stress or expenses was necessary. The intent was to move these practices to a good financial situation.
Some of our clients are great performers already, but they are interested in making some sort of change such as adding an associate or partner, preparing for retirement, moving to a new location, or purchasing another practice. The trick here is to undergo the transition without destroying the magic that provided the greatness.
Most of the dental practices we evaluate and/or assist are already good practices that strive to be great. For years we have been working to assist them in this journey. It has often been challenging, always exciting, and extremely gratifying. Going from good to great is a rarity because it requires changing daily protocols and approaches, and it means taking risks. The reason there are so few great dental practices is that being good gets in the way, and there is a rare combination of attributes that is always in place when good practices advance to become great practices.
Empirical knowledge tells me that there are dental practices performing twice or three times as well as others under the exact same conditions. A perfect example (without violating confidentially) is a dental practice in Texas that had been producing a very good $63,000 per month with a staff consisting of one dentist, one hygienist, one assistant, one front desk specialist, and one rover from front to back. Within two months this practice moved to the great category producing close to $100,000 per month consistently while increasing staff by one hygienist and one full-time assistant. A one-dentist practice in the mid-south that was overstaffed for its production of about $70,000 per month grew to average close to $110,000 per month while actually reducing staff. Why can these dental practices make that leap to greatness while others do not? Only recently have I found an explanation that discusses this phenomenon in a way that I am convinced is correct.
The research and resulting book written by Jim Collins titled Good to Great is right on. While his book is about public corporations and my interest is dental practices, this book explains better than anything I have ever read (or wrote, unfortunately) what factors create greatness. I strongly advise anyone who is interested in the subject of excellence to get a copy and read it, probably more than once. I am sorry, we do not sell this on our website but it is available from just about any bookseller including Amazon, Barnes & Noble, etc.
For a few weeks including this week, I intend to take Collins’ analysis and apply it to dental offices. I cannot do proper justice to his book, but I think the knowledge gained about excellence in dental offices combined with his own structure of presentation should be worth the few minutes it takes to read it. Each week, I will then post that week’s essay on our website WiseDentist.com should reference to previous week’s installment be helpful. Comments are greatly appreciated.
I think it will take 6 to 10 weeks to complete the series, and I may skip a week or two to cover another subject should that seem appropriate. Very generally, Collins found that there are six characteristics that are always present in great corporations. The first three are present during the initial time he calls the buildup and the other three are present during the breakthrough phase. The six with very brief explanation are listed below.
1.) Level 5 Leadership. The leader is “a paradoxical blend of personal humility and professional will.” This does not require, and probably specifically excludes, management superstars. The leader must be a member of the team not the tsar.
2.) First Who …Then What. Despite the old adage that “People are your most important asset.” the fact is that the right people are essential. One person can spoil a team. Teams win together.
3.) Confront the Brutal Facts. You must have unwavering faith in your success while being realistic about the difficulty no matter how bad it is. Lack of conviction results in lackluster efforts.
4.) The Hedgehog Concept. To be great you must be able to be the best in the world at your core business. (This requires special discussion to adapt to dental offices, but it still applies.)
5.) A Culture of Discipline. When you have disciplined action, you do not need excessive controls. This involves well-defined internal procedures and protocols as often discussed by me.
6.) Technology Accelerators. Great companies think of technology differently. They are experts in the application of carefully selected technologies. Buying every new gadget is counter to this.
I am convinced that every shaky dental practice can become a good dental practice and that every good dental practice can become a great dental practice, if the dentist is willing to think outside the box and make some changes that will require some risk.
School is starting and it is a perfect time to contact all patients for “back to school” dental needs. Contact me by email, if you want some ideas for a patient newsletter. (Minimal charge.)
As I have written often, I am a baseball fan. For those of you outside the Americas I cannot explain our fascination with this rather slow sport and our (at least US) lack of devotion to soccer (football). Right now, though, players who average more than $3,000,000 each per eight-month season are threatening to strike just before the playoffs. Already Major League Baseball in North America has deteriorated to the point that only about one-fourth of the teams have any legitimate chance of winning the championship given the salaries and disparity of income per team. Professional baseball is ailing, and I fear it may receive a fatal blow. While fans in my native Dallas and my adopted Tampa Bay might consider a strike to be a merciful end to an abysmal season, it would be a shame for those fans in Minnesota, Seattle, St. Louis, Cincinnati, Houston, and Anaheim. Besides, this could be the year that the Red Sox curse ends. I pray that cooler heads will prevail.
Have a great week,
Hurston Anderson
813-963-7228
PS: Strongly consider our Practice Management Cookbook and Protocol Series of workbooks for internal organization in dental practices. There are specials for purchasing more than one book at a time.
Positive Motivation for Employees
I realize this is a subject that I discuss rather frequently, but it is also the area of dental office ownership that causes the most stress (and distress) for the dentist. Simply stated, most dental practices operate at less than 50% of their potential primarily because the staff and the doctor are not a cohesive team. They are just showing up and going through the motions. Their hearts, their souls, their minds, their joy, and their creativity never make it to the office. Woody Allen is quoted as saying that 90% of success is showing up. That does not apply in dentistry or any other profession with which I am acquainted.
Part of the problem is that we business owners are almost schizophrenic at times in dealing with our employees. We are in an age and a society that promotes egalitarian values, so we often try to be one of the “guys” on an even level. That is understandable from a societal perspective, I suppose, but it is too often overdone, and it is naïve to the extreme.
There are some realities that we must face as business owners and employers, if we want our businesses, our families, AND our employees to prosper. He (she) who writes the check is the boss, and that cannot be disguised or ignored no matter how uncomfortable we may be with the idea of bosses and employees. Human nature will complicate a relationship that is too close between bosses and employees no matter how much both parties seek to avoid these complications. The inescapable fact that someone is the boss and someone is the employee does not make the person who is boss superior, or better, or more worthy. It just gives them a different role to play on the stage of life as described by Shakespeare. An important key to being a good boss is being comfortable with the role.
Some bosses are too overbearing and arbitrary. Attila the Hun may have been an effective leader of barbarian warriors, but his style will not work in a dental office. There are organizations that operate best when individuals need only show up and go through the motions assigned in an acceptable way. (In fact, a lot of dentists I know would settle for that in their offices.) An army in combat, a manufacturing line, and even some parts of sports teams require absolute discipline and limited individual creativity for success. (I realize this does not apply throughout any of the organizations cited, but it does at the more basic levels.) Although I believe a lot can be done with very detailed Job Descriptions, internal protocols, and training in dental offices, there is at all positions in dentistry also a need for creativity. Steelworkers, the guys who walk girders and erect the skeletons for large buildings, call their low-level managers “Pushers” (or they did 20 years ago). That descriptive management style will not work in today’s small business. While the relationship in a dental office must recognize that all are not on exactly the same level, the days of kings and subjects is passed.
Just as the relationship between boss and employee must adjust to our modern concepts of egalitarianism, the relationship cannot be too collegial either. If you are the dentist and your best friends are your employees, there is the potential for concern. What kind of real friend can say no to someone who wants more money or more time off for good, or bad, reasons? How can the other employees be anything other than concerned when the boss has a particularly close friendship with a particular employee? And then there are the too frequent extramarital relationships that exist in dentistry. Although I would rather not, I must discuss this a bit.
A dental office contains all the elements necessary to foment romantic liaisons. Young, attractive, females who are often financially struggling are working in uniquely close proximity to more financially established males who sometimes become bored with their jobs and lives. Typically, women seek security while men seek proof of their manhood. Even if neither is particularly evil or predatory, our culture encourages promiscuity and no longer condemns those who stray. Unfortunately, anyone who has fallen prey to this temptation knows the downside or will soon. The pain is usually so great as to completely negate the original attraction. In as kind a way as I can, I want to suggest to those who may be tempted or have already succumbed to temptation, “Rectify this immediately. This is a practice corrupter that will cause even greater problems than you already have.” If there is a boss taking advantage of his position with a vulnerable employee, you have the potential for blackmail and even legal action brought against you. If there is a boss who is beguiled by an inveigling employee, I would ask the employee how secure a future relationship might be with this dentist? If you were able to take him from his family, could he be tempted by another version of you in a few years? It goes back to the best advice I ever received from my father. “Don’t do things you know are stupid. We have too many things we can’t control to deal with already.”
Sorry about that sermon, but so many innocent lives are involved, and it is an issue of some significance in dentistry. Actually, my real interest is discussing positive motivating factors in dental offices. The first is where money fits as a motivator because that is the area that gets the most attention from both management and employees.
First, it is important to understand the psychology of why people act and react as they do especially as that relates to salaries and bonuses.
People perform at their absolute maximum when they are working cheerfully with their heart, not just their body. You cannot capture the heart and soul of an employee with an increased salary. Salary and wages feed the body, not the heart. Most employers, especially in small businesses, think the relationship between boss and employee is improved as salaries increase. Salary and wages are for work already completed, and they are NEVER responsible for improved employee productivity. Salaries can be a de-motivator, but they are NEVER a motivator. You cannot pay enough to gain loyalty and hard work from employees. How else can we explain professional athletes who make millions a year and still under-perform and are disgruntled? Leadership captures the heart. Salary only captures the physical presence. Money motivation has a place, but it can only be used for short-term objectives. While salaries must be competitive, to get the best from employees requires more than money.
Part of the confusion some have is confusing compensation with incentives.
Compensation is paid for work that has already been done. Incentives are offered for future excellence.
If effort has been consistently excellent in the recent past, a bonus as compensation for that effort is appropriate so long as it still fits in the basic overhead limits. Certainly, if this compensation is a result of a properly outlined bonus/incentive plan, it can encourage future excellent effort, also. However, unless there is a clear, fair and easily understood bonus/incentive plan already established future excellence will not be encouraged by past compensation. While I heartily endorse one-time rewards for extraordinary performance as fair and farsighted, this should not be the only type of incentive plan in the office. A good bonus/incentive plan can be effective as a motivator, but most are so poorly conceived and explained that they actually have the opposite effect.
No matter what the approach the practice must be kept healthy financially, or everyone loses. Part of the problem we often face with new clients is that salaries already exceed acceptable standards while greater effort is required. When salaries are already out of line (20% of gross production) there are only two options available. Either salaries must be reduced or production must be increased.
Although I am going to discuss forced personnel changes, because there are times when that is necessary, this is almost never an option for bringing salary overhead within acceptable standards. For reasons beyond our control there are people on this planet who are simply just too negative, too damaged, too immature, or too lazy to be a member of an effective team, and dentistry is a team effort. If you have an individual who is holding the entire office back, you need to solve that problem immediately and humanely. While not all people were blessed with a positive upbringing and outlook on life, they must learn to leave that at home. There is no acceptable excuse for souring the entire office or fomenting discontent. A negative person can be employed so long as she/he is not in a position of leadership. Negative leaders will spoil the entire team’s efforts. (If the negative element is the dentist, that is a particularly difficult situation. Often we find that the dentist’s negativity can be resolved if the surrounding team and/or financial circumstances are improved. Sometimes, though the doctor needs to undertake deep personal or professional analysis. This is very important and should not be ignored.)
In most cases the best way to bring salary overhead into an acceptable range is to raise the production to the level that the salaries are no more than one-fifth of the gross. In more than 9 out of 10 cases when we go into an office that is the issue we face. Then, the great challenge is how to effectively motivate this team to the degree that they can raise production while salaries remain the same. A combination of techniques is used, and the approach varies from dental office to dental office, but there is always an answer.
I have reread this several times in order to shorten it so that I can get into more specifics, but I think it is going to have to spill over into the next essay, which I promise to complete by week’s end. I have overstayed my welcome this time, I fear.
These few weeks since Memorial Day have been challenging on a personal level. Thursday after Memorial Day our eighteen-year-old graduated from High School with all that attendant excitement and angst. There were visitors from out of town to be picked up and delivered, graduation parties, college issues to settle, etc. all that week. When our twenty-one-year-old came home from college for her graduation, he reported that he wants to transfer to a school nearer home rather than complete his fourth year at in Texas. Although he has valid reasons for the move, there are a lot of things that have to be done in order to get that move completed by second summer session here. One was getting a Florida driver’s license. As he was driving my Lincoln to the drivers’ license office he was rear-ended by one of our elderly citizens giving him a sore neck and me a smashed car to be repaired. Both will recover, but both required special attention. When I got back from the clinic where he was checked that evening, I discovered that we now have a new grandson (Nicholas Richard Gebhart) some two weeks early.
Everyone has gone home, the car is in the shop for repairs, our son is back in Texas temporarily, my wife is in Minneapolis being a helpful grandmother for the newborn (as well as his eighteen-month-old sister and her beleaguered mother, of course), and things are beginning to settle down a little so that I have a bit of time to think and to jot down these few notes. As I sit here catching my breath with dozens of unanswered emails, faxes out my ears, and a stack of paperwork that overflows the in basket, I think, “ When will life ever settle down?” Then, I think how lucky I am and have always been. We can choose how we deal with life. This like all life’s challenges will pass and contribute to the continuing tapestry that is a full and happy lifetime. To quote the incomparable Jackie Gleason, “How sweet it is!”
Have a great week,
Hurston Anderson
813-963-7228
In Memory of War Heroes
Memorial Day is a time to remember our war casualties, and it coincides with high school graduation in many places as well.
I grew up 20 miles east of Dallas in a small town (then anyway) called Sunnyvale. The town was so small that there was no high school, so we were bussed everyday to the larger town of Forney across the Trinity River in the next county where there was a high school. My graduating class contained only 37 students, so obviously neither town was very large those thirty plus years ago. Now, the area is just part of the Dallas suburbs.
Of the 37 students in our class, 17 were male. Of those 17 males, 2 died in Vietnam. Others from our school were lost in that war in the class before and after ours. Did Billy and Fred give their lives in vain? It seems like a lot of people believe that they did. I do not think so. I think they were heroes whose sacrifice has finally been proved despite the thoughtless rhetoric of the past thirty years by individuals with questionable objectives. There was much discussion about that war, and I will be swamped with disagreements to my previous statement, but I want to point out one salient fact. Ultimately, the west defeated communism, which has been responsible for more deaths, repression, destruction, and inhumanity than any other movement in the history of mankind. Estimates are that Nazism killed upwards of 10,000,000 individuals. Yet, estimates are that Stalin alone murdered 60,000,000 of his own citizens in his maniacal paranoia. Had America backed down some forty years ago in the face of overt invasion by a communist country supported by both the USSR and Communist China of a neighbor, it is possible that communism might not have ultimately failed. It was important for the totalitarians who called themselves Communists to realize that the west was not soft, nor softheaded. The shine is definitely off the great intellectual (sic) concept of Socialism and the repression wrought by socialism’s political brother, Communism. No, I believe my classmates, my cousin from CA, and the thousands of others who died in Vietnam are heroes who died for the ultimate freedom of hundreds of millions of people around the world, and after some thirty years historians are begrudgingly admitting the same thing. Forget the historians, though, ask those walking the streets of Vilnius or Tbilisi or Kiev or Moscow, if you want to know what the collapse of Communism has done for mankind.
Of course, soldiers are dying right now for their country and for the ideals we hold that are so odious to those who despise freedom. Personally, I did not have to raise my flag for this holiday weekend. I have displayed it night and day since September 11 and will continue until no American soldiers are under fire by the enemy. That may be longer than my allotted time here on Earth. I hope not. For some strange reason patriotism has somehow been translated by some as dangerous, unfettered, exclusionary jingoism. What a hurtful misrepresentation that is. Luckily, that was not the case in 1776 or 1945, or those critics would not now have the freedom to criticize so smugly.
I suggest that the Memorial Day weekend is a special time not only for remembering but for living our lives as fully and wholly as those who sacrificed theirs for us would have wanted us to. We owe a great deal to those who paid the ultimate price for freedom, and one way we can make their sacrifice more worthwhile is to try every day to make this a better society for all. That is why they gave their lives. This may mean pausing a few seconds before snapping back at our children or spouse, waving another car ahead that is trying to enter the highway (even if they are pushy), smiling at the staff in the dental office the first thing in the morning and the last thing at night. Give others the benefit of the doubt even if we are sometimes disappointed. Francis Hutchinson, the Scottish philosopher, maintained that God gave mankind the basic precepts of knowing the right thing to do, and that we knowingly violate those when we act selfishly, meanly, etc. Well obviously, I am seriously condensing his life’s work, but the basic concept is that we know how to do the right thing, if we choose to do it.
Memorial Day is not only the day we pause to remember those who died for their country, but it is the traditional start of summer in the US. Just as their lives gave us life celebrating their sacrifices is followed by the liveliest time of the year. I like that, and I think they would, too.
Tuesday morning let’s all decide to smile just a few seconds more and soften our tongues with our staffs and coworkers. Let’s not violate that inner voice that is telling us to do the right thing, and our businesses will benefit enormously, not to mention our lives.
I realize there is not much here about dentistry, and I usually try to segue in some way into dentistry even on the holidays. Unfortunately, not a single one of my classmates became a dentist. That would have been a great transition. However, of the 37 who graduated in my high school class four earned PhD’s, two became MD’s, and two are CPA’s. So far as I know not a single criminal or reprehensible individual has come from the group, although I did hear that Mike Swindell became a trial lawyer, so we did have our blemishes. (For those with lawyers in the family, sorry about the cheap shot, but all that advertising to create lawsuits that goes on here in Florida leaves a bad taste in one’s mouth for the profession in general. Their professional association really should clamp down on that stuff, but I suspect it is much too successful).
Have a great holiday weekend,
Hurston Anderson
Forney High School
Class of 1965
(813) 963-7228
PS: Our website www.WiseDentist.com contains many of the Weekly Tidbit essays that have been sent over the past five plus years. In addition, there is info about our practice management workbooks and lots of other free stuff.
Yo! What’s the Plan?
There is a rather large audience for these Weekly Tidbits. At present the count is about 30,000 dentists and other dental professionals in eighteen countries spread across six of our seven continents. If anyone is forwarding his or her copy on to Antarctica, please let me know. That would give us a clean sweep of the continents. I have never quite been able to reconcile my thoughts on Greenland, but we do not seem to have a dentist there either, although there are a few in Iceland. (Incidentally, why are there only five rings in the Olympic emblem?) Since the vast majority of readers are the result of direct referrals, I thank you.
Amazingly, of these 30,000 at least 75% are not happy with their practices at present, or at least that is my estimate from my correspondence. To some extent that is a healthy statistic because complacency can result in lethargy and ultimately indifference. To stay current and vibrant as individuals and in our businesses we need a healthy amount of uneasiness. Standing still while the world is moving, if possible, would result in falling behind.
The key is not to worry but to act, though. One of our themes of our website is “Wise is he who thinks before acting, then acts decisively.” The corollary to that would have to be, “Dumber than a rock is he who needs to act and sits around worrying instead.”
A dentist should receive as compensation for his/her education, knowledge, experience, and practice-ownership risk 40%-50% of the practice income. The % is generally lower when the production is lower and higher when production is higher. For instance, it would be about normal to see a practice producing $40,000 per month return to the dentist/owner $16,000 per month ($192,000 per year) while a practice producing $100,000 per month should return closer to $50,000 per month to the dentist/owner per month ($600,000 per year). Do not believe that I am exaggerating. I see hundreds of dental office results each year.
If your return is falling below 40% of practice income, it is time to be concerned, and if your return is falling below 30% of practice income, it is time to consider panicking. In either case, it is definitely time to act.
In the business world every successful business has a plan of action for what it expects to do for the short-term, mid-term, and long-term to reach its objectives. First, though, it has to have some objectives. Some dentists go from year to year not happy with the progress of their practices but never putting on paper what their goals and objectives are for the practice. Instead of “ready, aim, fire” the approach is “ready, fire, complain”.
Every dental practice should have a statement of why the practice exists. It should next have a list of goals and objectives termed not just financially but also clinically and in humanitarian terms. How does one know if one is succeeding, if the terms are not defined?
After setting goals it is next important to create a plan of action for how to get from here to there. It is like looking at a map when you are going to take a trip and plotting the course. Well, it is a little harder, but it is also worth a little more time considering what is at stake. In general, list steps to be taken to reach the goal in measurable time periods. For instance, write down realistic expectations for the first year, the second year, and the third year. Longer periods of time should be included for more long-term goals like retirement, etc., but for practice improvement and growth, for building a new office, for hiring an associate or taking on a partner, for reducing work hours, etc. action plans should be for no more than three years. For a real world example, look on our website at a sample Action Plan we actually produced for a client. (The name was changed and numbers slightly modified to protect anonymity, but this is a real situation.). Click here for ACTION PLAN SAMPLE.
If you don’t like it, change it, but don’t go off on tangents. Investigate, cogitate, and “act decisively”.
I think this NBA Championship Series and the Stanley Cup Series have some of their leagues’ best “floppers”. I am reminded of the incredible blow that Cassius Clay (maybe already Ali) delivered to floor the mighty Sonny Liston some forty years ago. It was so hard a swing that just the wind from his fist carried enough power to knock Liston out cold. You have to give these athletes some credit for their power too, but then, I see why so many are moving into films and television, too.
Have a great day,
Hurston
813-963-7228
www.WiseDentist.com
PS: It might be useful for those who are not happy with their practices to have us do one of our free evaluations to see where you are. Click her for FREE EVALUATION. From that you can set some realistic goals and create a solid Action Plan, or we can help, if you like.
Eliminate Cancellations in the Doctor’s Schedule, Too!
As I wrote a few days ago, this time around I want to talk about techniques for eliminating cancellations and no-shows for the dentists’ schedules. Generally, the theme is similar. That is, it all begins with knowing your patients. This is critical for so many reasons that it should speak for itself, but, in particular you want to know their habits when it comes to honoring appointments with your office. Also, the best internal marketing practice builder is for everyone in the office to treat patients like friends and family. You must know them first, of course.
Here are a few rules about scheduling patients for the doctors’ schedules, which will effectively solve the problem. They also can in many cases be applied to the hygiene schedule.
1. Never schedule patients with a past history of CA/NS. (Three strikes, you’re out)
2. Always schedule AAA (most trustworthy) type patients for Monday mornings.
3. Always record the CA/NS in computer for future reference.
4. Always ask for the “#1 phone number”!. The number you can use to reach the patient between 8am and 5pm. (Then, other numbers - cell, car, beeper, home, work, relatives, etc.)
5. Always ask permission to call patient at work! (Record in computer comments)
6. Always confirm (1) week prior for 1 or more hours of scheduled time
7. Always confirm (2) days in advance for hygiene appointments and less than 1 hour of scheduled time
8. Always confirm (1) week after hygiene cards are mailed
9. Always explain when appointing the importance of 48 hours notice if they need to cancel
10. Always place CA / NS patients on a "Very Special Call List" for " Our Very Busy Patients" (Ask for the best time, day, and # of days needed before calling to appoint)
11. Always schedule " chronically late “ patients "15 minutes" earlier than their appointed time
12. Always ask "New" patients to come in "15 minutes" early to fill out their paper work
(Never schedule “New” patients at 8am or first hour after lunch, unless paperwork is done.)
Note: Confirming by leaving a message and general rules:
1. Include our work number for them to call us back to confirm the appointed time
2. Be sure to follow up with any left messages on schedule
3. RULE: No one is confirmed unless we speak to them personally
4. Know your patient and their past history in your practice (see #3)
5. Always have your call list nearby to call " Our Very Busy Patients"
6. Pre-plan your schedule with the entire team present each week to make certain all members are able to contribute intelligence about the patients on the schedule and to be able to treat them like friends.
7. When a patient cancels we need to know the reason!!! Always record in computer! If a cancellation letter is appropriate mail it the same day. If not make sure we have everything recorded in the computer as to why the patient canceled.
Truthfully, I just pasted most of the above from our Practice Management Cookbook, Hygiene Protocol, and Scheduling Protocol. If you have one of these you can go directly there. One of the first things we do in a practice when we are asked to assist is to instill, train, and monitor this cancellation/no show protocol along with several others.
One of our clients wrote me after last week’s Weekly Tidbit and offered the following. He is a rather well-known clinician and management expert from the ArkLaTex area. Besides building and managing one of the largest single dentist practices in the country, he has written and spoken extensively on these and other subjects to dental groups.
Hurston
Liked your letter this week. I think you might have made your point a little bit better if you would have gone ahead and multiplied 30 "no shows" per month by let's say $100 (average hyg visit). That is $3000 per mo and $36,000 per year, AND that is 99.9% pure PROFIT that is flying out the
window !!!!!!!!
Also, when asking the patient to call to confirm their own appointment, I feel strongly that we should be in the habit of making bold requests. I use the following while looking them in the eyes, "Mrs. Jones, can we count on you to call us yourself to confirm this appointment when you receive it in the mail?" This is slightly confrontational but it gets a firm "yes" or "no" from the patient and lets them know that this is probably a bigger deal than they had been thinking.
Montie
There is another major element of this continuing subject, which should be discussed at length, but I’ll save it for next time. Most dentists do not like to even think about pre-planning for many reasons, but I know the results, which come from these weekly Pre-Plan Meetings, and I’ll go into that later.
Have a great day,
Hurston
813 963-7228
PS: Many of you have the Practice Management Cookbook by now. There is a discussion of this week’s subject in Section V, as well as the Hygiene and Scheduling Protocols. The methodology for establishing an efficient hygiene protocol is in the Protocol Series workbook, Increasing Productivity in Hygiene. Cookbook is $249.95 plus 19.95 shipping/handling and each Protocol Series member is $199.95 plus s/h. Fax 813 963-5974 with Visa/MC#, exp. date, and address…or call above #.
For a FREE Production Potential Analysis and Evaluation, contact me. Order on line at our store.
Living With Cancellations And No-Shows Is Not Necessary
I am noticing as I read the analyses we are doing free for dentists that there are indications of high cancellations and no-shows. What a waste this is. We work very hard with our clients to eliminate these, and we know exactly how to be effective. Candidly, it is not that difficult, if a protocol is followed precisely, no exceptions. I am going to rewrite some general comments I made about this subject several years ago. Today, I will discuss hygiene, and in a few days I will discuss doctor’s appointments, too.
This first quarter was excellent for all of the dental practices with which we are associated nationwide. Hopefully, it was for your practice as well. The first quarter is an excellent time to stop to assess your progress this New Year. Multiply your production and collections by four. That is about what you will have at the end of 2002, if you stay on the same course. That will be one thing to consider, but there are other critical areas.
For instance, how bad were cancellations and no shows for hygiene, as well as the doctor, this first quarter. If they were about like last year, you are following the same procedures as last year. In many average-sized dental practices there may be 20 to 30 cancellations and/or no shows per month. The problem is that the more we take it for granted as a practice, the worse it gets. A sort of “resigned acceptance” attitude spreads throughout the entire office. Cancellations and no shows are a chronic problem in dentistry that CAN be solved. However, it does mean that we have to pay attention, and we have to be proactive. We have to be proactive in time to make the difference.
First, hygiene no shows and cancellations result from inconsistent following of the hygiene protocol…or, an ineffective hygiene protocol. Pre-booking is important and effective, but it must be done properly. It starts with a good Hygiene Card (samples in our Cookbook and Hygiene Protocol) clearly stating that the patient should call the office upon receiving the card. The patient while in the chair should address the card. The Hygienist should remind the patient that they are to call upon receiving the card by pointing to that portion of the card upon handing it to the patient. The Front Desk person should highlight that sentence on the card in front of the patient, so that when the patient receives it in the mail, he/she will be reminded.
Why should patients write the address on their own Hygiene Card? Because when patients see their own handwriting it is like an implied contract they make. Most people are honorable and do not break contracts. Why do we want them to call us? Two reasons. First, action by the patient will again substantiate the implied contract and make them less likely to forget. Also, it saves a lot of phone calls. Assume 1500 recare patients per year. That means about 5,000 calls, recalls, etc. to reach the patients. At even two minutes per call we can save as much as 167 hours per year. At ten dollars per hour that is $1,670.
The cards are to be sent the first of the month for appointments in the last half of the month and at mid-month for patients in the first half of next month. When the patient calls we mark that call on our recare schedule. If they have not called within a week of the card’s being sent, then we must call. This is critical because this is the step that is most often missed and most often leads to cancellations and no shows in the hygiene schedule. At this juncture we have enough time to become proactive in filling the schedule from our lists of patients who are due. (Always call those with the most outstanding treatment first. Then the next, etc. Every Hygienist’s schedule should have at least three patients with treatment outstanding per day.) We still confirm patients the day before their appointment too, but we have fewer surprises. Leaving a message is not confirming. Only speaking with the patient of patient’s guardian is a confirmation. No confirmation, no appointment.
Still, there will be patients who cannot make their appointment at the last minute. For this we have the “Special Consideration Patient List”, or “VIP List”, or whatever you like, so long as it makes those patients feel they are getting extra service, should they ever see it. Never put someone you want on a list that would insult him or her, if they heard about it. Actually, this is the list of patients who are good patients but who are chronic cancel-ers or no show-ers. Of course, it is essential to KNOW YOUR PATIENTS.
Just because a patient has problems making appointments does not make them a bad patient. Some times the office forgets that they are not the most important thing in the world. I personally am always on the list by choice. For years I was in a highly demanding position as the CEO of a company with worldwide offices. No matter how much I wanted to have my teeth cleaned, if I got into the office and we had a crisis in Moscow, or wherever, I had to deal with it, immediately. If a large stockholder or important customer wanted to drop by to say hello, I had to be there. Many, many patients nowadays are in similar situations. Yet, they also usually have the flexibility to leave on a moment’s notice, if an opening comes at a time that is convenient. You may have to call many times before it works, but they are still good patients. Luckily, this is a small percentage of the practice, but it is an important one. Think of these patients as a gold mine with potential to produce on a short notice.
Don’t even consider charging for missed appointments unless you want to run the patient, all his family, all his co-workers, etc. out of your practice forever. It takes hard work and following a good hygiene protocol precisely, but there is no reason for the hygiene schedule to fall apart at the last moment. Someone is not properly executing the protocol, or the protocol is not complete, or the protocol is not understood, if this is a chronic problem. Just because someone tells you they are doing everything I stated does not mean it is actually being done. Again, a left message is not a confirmation.
This has run a bit long, so I will send another in a few days to discuss the doctor’s cancellations and no shows.
I guess no matter how long I am away from my home town of Dallas I will always feel a closeness. Now honestly, I know and the experts all know that the Lakers are going to win another NBA Championship short of disaster to either Shaq or Kobe. Still, several other teams have an outside chance including the Dallas Mavericks.
Have a great week,
Hurston Anderson
813 963-7228
PS: Many of you have the Practice Management Cookbook by now. There is a discussion of this week’s subject in Section V. The methodology for establishing an efficient hygiene protocol is in the Protocol Series workbook, Increasing Productivity in Hygiene. Cookbook is $249.95 plus 19.95 shipping/handling and each Protocol Series member is $199.95 plus s/h. Fax 813 963-5974 with Visa/MC#, exp. date, and address; call above #, or buy online at http://www.wisedentist.com/.
For a FREE Production Potential Analysis and Evaluation, http://www.wisedentist.com/.
This is a sample of an actual evaluation we performed recently. To submit form click here.
Wisdom Management Group
Practice Production Potential Analysis
For
Dr. H
Thursday, April 11, 2002
Dear Dr. H
Type Practice
General
Age of Practice
26
Years Present Management
26
New Fee For Service Patients
4
Other New Patients
1
Active Patients
1680
Hygiene Hours
200
Hygiene Assistant Hours
0
Dentist Hours
160
Dental Asst. Hours
292
Administrative Hours
168
Treatment Rooms
4
% Fee for Service
78
Gross Production $
$56,750
Hygiene Production $
$19,760
Collected $
$52,270
I realize that it took a great deal of effort to fill in this form so precisely. Actually, only about one-third of the evaluation forms we receive are properly completed, as is yours. That indicates a great deal about you and your practice already. Congratulations, you have a great practice. Assuming a healthy overhead of 60% (hopefully a little lower), the doctor’s personal income should be in the $225,000 to $250,000 per year range. Probably, you have deductions that reduce that to a more attractive taxable amount, but you are definitely in the top 15% in dentistry. This analysis hones in on areas for improvement, but that should not detract from a great accomplish over the past 26 years.
Typically, a dental practice will produce about 50% to 80% of potential. Your practice appears to be producing about 55% of your potential of $102,789 per month. While I realize that looks ridiculous, I hope you will bear with me and read my further explanation below. Ultimate potential is based upon a perfect situation given your patient base, staff size, experience level, and facility size. While we do have a few clients who have reached 100% of their potential, that is extremely rare and 80% achievement of potential is in the top 5% of all dentists. In your case, that would be just a little below $1,000,000 per year, and that is reasonably achievable within two to three years, if the right steps are taken.
Patients. I have some concerns about shutting down the new patient flow, and I think I know how that can be solved. As you are aware, it is new patients, which bring in new treatment, and it is difficult to change your image back to welcoming new patients once the word is out in the community. For now, I recognize your concern about not properly treating your existing patients of record, but I think there are other solutions. I would like to see the new patients limited to only full-fee patients, if that does not violate your personal commitment to community. I do not know what percentage write off is necessary for your reduced-fee patients, but it seems that limiting to full-fee patients as a way to stem new patient flow is a feasible and a financially advantageous approach. This doctor will approach retirement in 10 to 15 years (or less, maybe). We need to have the practice at its peak when it is time to sell or reduce hours giving way to a partner/buyer. By natural attrition the patients of record will dwindle faster than 5 per month, so the goodwill value of the practice is diminishing as well. At present the practice would normally be worth about $350,000 to $375,000, but that would be reduced somewhat due to the meager new patient flow. Although shutting that “spigot” was probably a good solution at the time, we need to find other ways to solve the problem and slowly open up for new patients. It will take time for that flow to return to a healthy 20 to 25 per month.
Staff. Your staffing looks about right for the volume you are producing. If you are in an area of high salaries, you may be having a hard time keeping total staff compensation within the 20% range ($11,350 per month for you). In particular, you could be paying your hygienists rather well. I would advise that you keep them happy by any reasonable means, because they are producing very well (see below). I do want to be clear, though, that while this staff is probably necessary for the present volume, there is significant unused capacity to reach much higher production without increasing staff. If you remember the essay I wrote a couple of months ago on Parkinson’s Law, you will get a feel for my thoughts in your situation, as well. The staff may not think there is any way possible to grow without hiring additional staff, but statistics from thousands of dental practices do not agree. Internal protocols must be closely analyzed and fine-tuned to provide an efficiency that probably seems impossible at present, but that is based on the current paradigms. Those must be changed, too.
Hygiene. I am impressed with the production per hour from your hygiene department. While we expect our clients’ hygienists to produce $1,000 per day (some are reaching $1,250+ per day), we would equate that to $956 in your practice, which is only 78% full-fee. Your hygiene department is producing $790.40 per day, an impressive 82.7% of weighted potential. Still, this leaves us with $4,140+ per month in unrealized potential based upon present staffing, which is almost $50,000 per year that could be applied to hygienists’ income, doctor’s portion, etc. Also, your 1,680 patients should all be recare/recall patients, if we are restricting new patients. Certainly, some will be 12-month recare/recall, but an equal number will be 3-month, perio-maintenance patients. We find that on average using 6-months as an average is appropriate. That means you should have 3,360 hygiene appointments per year. For one-hour hygiene appointments, which seems likely in a practice like yours, you would need 280 hours of hygiene per month. That is 40% more hygiene per month (at your hourly rate that is $7,904 per month or $94,848 lost in hygiene). It is possible that you have hygienists who use 45-minute appointments. The rather high production per hour could be due to shorter appointments. If you have judged that 45-minute hygiene appointments properly serve your patients, you would need to increase only 5% to 210 hours per month of hygiene. While there is potential to do better in hygiene, this hygiene department is well above average in per hour production in the general dental community, and it is even more than 80% of our clients’ objectives. It is possible to do better in hygiene, but you should tread lightly here, because this is already an excellent area of your practice.
Facility. Four treatment rooms are adequate to reach the $1,000,000 per year goal, but it would require precise timing and scheduling. Just one more room for overflow during the times that there are two hygienists working would be helpful, and it would allow the scheduler some leeway. If this requires moving, that is a very big decision, and considerably more analysis would be necessary. If, however, there is a room that can be outfitted for about $10,000, that should be considered when the practice is consistently producing in excess of $60,000 per month.
Summary. SCHEDULING. Plainly and simply, you should be able to grow significantly by fine-tuning the scheduling approach. At present, you have a great practice, and the only thing that appears different from practices already producing $60,000+ per year is doctor’s production. A healthy ratio of hygiene to doctor’s production in a dental practice with a great hygiene department is 1:2 to 1:3. Your ratio is 1:1.87. That is pretty close, and your hygiene department is near great. At $119.50 per hour hygiene would be great. That means your production needs to be from $239 per hour to $359 per hour. At present your production is $231 per hour. If there are patients in your schedule (and in your dental chairs) who require treatment that will average more per hour, you will treat them. Therefore, it is the schedule which must be improved.
If I were advising your practice, I would suggest that you begin a growth phase with the ultimate goal of reaching 80% of your potential. I would expect to do that in three years’ time. The first year we should grow to $65,291 per month, which is 15% growth. The second year we should grow another 12.5% to $73,453 per month, and by the end of the third year we would have grown another 10% to $80,797 per month, just under 80% and almost $1,000,000 per year. Depending upon the team attitude this could be done much more quickly. We have clients who have grown more than $30,000 per month in a single year, but yours is an excellent practice already. Your team is justifiably rather proud of their accomplishments, probably. The task of changing paradigms and changing habits to the degree that the same staff can produce $1,000,000 per year may take some gentle persuasion over time.
Incidentally, collections are below our normal acceptable rate by 6% of gross production. If that is because of write-offs for reduced-fee patients, the only solution is to make the transition to 100% full-fee patients. If a good part of the $40,860 per year loss in collections is for staff, family, or professional-courtesy dentistry, that is less likely to be reduced without an examination of policies that you probably would not want to alter. If neither of these explanations accounts for the shortfall, then we need to look at the collections protocol because it is not working effectively.
Again, I find myself apologizing for being so critical of a practice that is already doing so well. However, there is unrealized potential that could increase the production to $1,000,000 per year while lowering stress, but I fear that all this discussion of growth sounds like more hard work for the doctor and the team. That should not be the case.
I am reminded of a story my father told me about the first job he had after college. He was to be a schoolteacher in the fall, but he found a summer job working on a road crew in the late 1930’s. When he started work the supervisor asked him to go help a couple of guys who were using sledgehammers to remove a large flat rock that was in the way. They had been alternately banging at the edges of the rock for two days to reduce it little by little. It was going to work ultimately, but dad suggested another approach. With the help of the two others he used a long pole as a lever, and wedged a smaller round boulder under the large one. Then, with one swing he broke the rock into. Sometimes, it takes new ideas and new approaches to help people accomplish things that are unimaginable based upon their existing experience.
Your practice should work toward your seeing patients only 128 hours per month. That can still include some large cases on Friday mornings, but that should be because you have stopped seeing patients my midday one day a week. You need that time to think and plan for your practice, and 128 hours per month is a lot for any dentist to work in the highly stressful clinical portion of the practice. I know this is possible, because I have seen it happen many times. You can produce $1,000,000 per year (which is probably irrelevant to you as a goal), while working fewer hours and with much less stress. Accomplishing this will not only increase your personal cash flow to around $400,000 to $500,000 per year, but it will increase the value of the practice to more than $500,000. This three-year plan could probably reduce the time until retirement is possible (whether desired or not) by as much as ten years.
Have a great day,
L. Hurston Anderson, PhD
The Value of an Appointment.
Sometimes, it is just a bad day, and it seems that everything is going wrong, and sometimes it is time to make changes. The email below is from a new client with whom we will be starting March 25th . I suspect, though, that there are thousands of dentists every day who have the exact same feelings. My response to the Midwestern dentist is below.
Subject: not doing so well....
I am not sure if this is salvageable. For the 2nd time this week the hygiene 8 am has not shown . We average 2 hygiene no shows per day. The staff acts like it is the luck of the draw. They seem to feel they have been given absolutely no direction. I hate coming to work and I feel that I am wasting my life. Yesterday the schedule was non-productive. I have been more productive when I am here alone!!! The assistant just left at 2pm to pick up her child. She can't get here before 9am so I work alone until then. It is a free for all and I pick up the tab…….I would honestly gladly hand the keys to this office to anyone who would accept them. I can't manage people, I don't feel anyone wants to work, but they all want to be paid. I hate the one way street. I pay for education, hep shots, uniforms on and on and then get excuses for everything that goes wrong. We lost money last year and I am funding my life with credit cards. I feel sick from stress and haven't slept well for months. I have been lied to, cheated, and ignored by my employees, and I don't have any faith in myself as a manager or CEO. I have tried writing things down for them. The paper gets lost, "I forgot. Yatta yatta…”. I am just busy enough not to be able to monitor every transaction, conversation etc. that goes on here.
So how is your day? Are you sure you guys are still interested?
Hi Dr. A,
Not a good day, I would say. Your situation is salvageable, but it will take many different steps to make permanent changes. We can release the pressure with some quick fix methods, but it sounds as if there may be some reorientation and retraining necessary for long-term change. It may be that all the staff is not salvageable, but it may be that setting a detailed and clear direction will bring them along.
Most dentists feel they are not good managers. It is particularly difficult, I think, because dentists are so smart, IQ-wise. Throughout most of childhood, the teens, and young adulthood most dentists were among the smartest people in their groups. Admittedly, entering dental school and meeting a room full of people who are equally smart is a bit sobering. Still, the experiences of our early lives mold our attitudes and reactions including our approach to problem solving. Smart people are accustomed to out thinking problems, and it works in many areas of life. However, effective personnel management is not about intelligence, and it is critical for success in any business.
Your example of herding cats is appropriate. Unfortunately, few employees are dedicated to their jobs anymore, anywhere. I do not want to denigrate all who work in dental offices because that is not fair, nor accurate, but in most cases it seems that dental office employees are there for the pay check, period. Our consultants all spent years working and managing in dental offices, and they are incredibly talented, so there are ambitious creative thinkers in the industry. However, the harsh reality is that most dental office positions are not high paying, and do not have a great future potential. That is why a dental office that has a management philosophy which relies on the staff to be self motivated, creative problem solvers will be dangerously dependent upon key individuals. Sometimes, the practice will sail along with few morale problems and healthy growth. Then, someone’s husband is transferred, or someone is going through a difficult personal problem, or a new staff member is added who is a strong personality with a negative attitude. Almost immediately, stress increases, the staff is unhappy, the patients start canceling more or simply just not showing at all, and eventually the finances suffer. Written, understood, and followed structure and internal systems must become the "Supervisor" that a dentist cannot be during the day. We use the word protocols because the internal organization cannot be based upon guidelines, but rules to be followed precisely. Too many dental offices have general guidelines as the only structure. That is not enough.
Also, give yourself a break. If you were able to oversee everything all the time like most managers of small businesses you could easily get it under control. That added "evil" twist with dentistry is that you must spend your day in the treatment rooms or there is no income. This leaves the staff to their own devices. If they are trained and motivated they can easily follow protocols and perform miracles. Of course, some cannot be trained and some cannot be motivated. If you have any of those employees, they will not be able to help us, and they should be asked to "shine their lights elsewhere". But, that is not the majority of employees. We and you will be discussing each and every person in detail, and we will make quick judgments if anyone is just never going to be able to contribute. Don't worry about that, though. It is unlikely that you would have hired anyone that incompetent.
Probably, we will be able to get the ship righted by first cleaning up the schedule. A first appointment cancellation/no show is inexcusable. We must treat our appointment times as treasures, with some are more important than others. Each hygiene hour is worth $100+. Losing that hour is like losing a one hundred dollar bill. It is essential that we know our patients. We must never allow our treasured first appointment to be occupied by someone who has any potential for canceling...based upon their history in the practice. No patient with a bad history or from a family with a bad history can be appointed for Monday, either. It is important for the first day of each week to go smoothly, and that is also true for the first appointment of each day. A cancellation or no show is not the patient's fault only. It is the fault of the dental office, especially the scheduler/confirmer. Now, we do not gain anything by coming down on her like a ton of bricks. She must be educated, motivated, and trained, if she is capable. If she is not, we must have someone there who is. If the attitude has become so negative that it is beyond help, we must find the ringleader, and replace that problem. You do not have a huge staff, so it will be a breeze to discover upon whom you can depend. It is better to hire employees who have a positive outlook on life, but if that is not possible, they must not be assertive. A negative dominating personality will ruin a dental practice more quickly than anything else.
For the doctor the key person for his/her psyche is the assistant. If the assistant does not assist well, the doctor will always have a heightened stress level. You must have an assistant who lightens your burden. If this assistant cannot be depended upon, you would be better taking an inexperienced person with a good attitude and training her to assist. A replacement trained assistant would be preferable, but you cannot allow anyone to throw you off first thing in the morning. The attitude and momentum build or collapse based upon the first appointment each day. If you have an assistant who cannot be there until 9 you must either not see patients yourself until 9 and use the time for office work, lab work, etc. or you must get someone who is available when the practice needs her. A practice is bigger than the unique needs of one person. Everyone there could be affected if this practice fails. How can you give raises, increase benefits, etc., if you are losing money? You owe it to yourself and them to see that this practice prospers.
When we arrive Monday it will be 100% business. We will first try to find ways to get your income increased, even if it is through means that are temporary. By that I mean, we will be watching that the schedule contains enough treatment and patients with good history for keeping appointments and paying their bills. Really, scheduling is about three days only...today, tomorrow, and the next day. Nothing beyond that is relevant right now. We must always try to fill today, tomorrow, and the next day before looking at anything else. If we do that today, then tomorrow we will be adding the following day, etc. If there is good production next week and tomorrow is a bust, we must see if there is any way to bring some of that forward, or we must dig through charts looking for production. In dentistry, the schedule is the thing. You will hear us emphasize this ad nauseum, and we will have the schedules faxed to us each day, if we think there is a chance that our message is not being taken seriously. We are very much positive in our approach, but we are firm about what will work and what will not. I do not mean to brag, but we know what will work, and we can detect quickly who will work.
Obviously, everything is filtered through your sensitivities first, but we will help you turn this practice around. Usually, when there is a staff just looking for direction the impact is immediate, and the income jumps the first month. Sometimes, we run into a bit more difficult group to inspire. It is just as the President says about foreign countries and terrorism. They are either with us or against us, ultimately. It is important to find out which as soon as possible, because this is a team effort, and the entire team must be contributing. Whatever the difficulties, we have seen them before, and we have a way to overcome any difficulty. The analysis I did on your practice is based upon our experience, and we expect to be held to that standard. As I said before, just hang in there. Help is on the way, and we have a 100% record of achievement for more than ten years. In 99% of the cases everything can be resolved, and the existing team pulls together, joyfully. That is what we expect to find, but if we do not, we still have the solution you require.
Continue to keep me informed. Very often I get out of the loop when the consultants gets involved, but I do stay informed and I am available to you at any time.
Have a better day,
Hurston
For anyone who has purchased the Practice Management Cookbook whether the first or second edition, we are now releasing the 3rd edition, the first update in 5 years. There is a good deal of new material and updated material contained in this version. While your previous editions are still quite useful, you might want to consider the new 2002 version. For a few weeks only we will send this new version to those who have purchased an earlier edition for half price, and the price has not increased yet. It will be another week at least before we will be able to accept credit card purchases on our website, but you secure your new version by following the instructions on our website http://wisedentist.com/workbooks.htm#costs .
If help is needed to establish effective and efficient internal protocols consider the Protocol Series as described at http://wisedentist.com/workbooks.htm#BooksAvailable. Also, we provide in-office assistance to expedite the establishment of essential protocols and to provide growth, help with transitions, etc. That is discussed at http://wisedentist.com/consulting.htm
Internal Disorganization is Curable
More than any other type of business, it is important for a dental office to be self-managing.
This is not a statement made by someone who has spent his life in dentistry. In fact, only for half of the last fourteen years of a 30+-year business career have I been involved with dental offices in any way other than as a cringing, reluctant patient. Having begun my business career working for Ross Perot soon after he founded EDS while I was still going to college (and then several years after military service), I was exposed to one of the fastest-paced companies in the world. In fact, EDS and Perot were in the Guinness Book of World Records as the fastest growing company ever as late as the early 80’s. In addition, I have founded or been CEO of a half dozen other firms in various technical and finance businesses. Sorry for quoting from my resume, but I am attempting to make the point that I do not have a biased opinion toward the difficulties of dentistry. I have a rather wide general business background plus advanced degrees in business management.
Yet, I have experienced conditions in dental offices that are unique to the industry, conditions that other businesses do not face.. The reasons for this uniqueness are:
Pace. With the exception of a handful of dental practices that are highly specialized in cosmetic and/or restorative cases, dental offices are almost non-stop activity. Patients are greeted, seated (front), re-seated (back), treated, unseated, re-appointed (ideas for a rhyme here?), completed (pay at front), and de-greeted. Maybe, I took the attempt at rhyming too far, but the point is that dozens of patients daily must be taken through many stages in a dental office.
Small Staff. There is not enough income per patient to hire a huge staff to accomplish this task, as is the case in most medical practices. Therefore, in most dental offices a staff of half a dozen, or fewer, will perform each and every one of these steps for each patient as well as all other activities like cleaning, sharpening, researching, developing, scheduling, collecting, reassuring, instructing, answering phones, buying supplies, etc.
No Direct Supervision. This small-ish staff cannot afford the luxury of a full-time supervisor, so most tasks and sequence of tasks are performed by the individuals without supervision, detailed guidelines, and often without much training in the area of their responsibility. Each individual employee learns to perform her (usually) tasks based upon some slight training from the doctor or another employee who has almost no time to do this training. Experienced employees bring with them methods, which were used in other offices because that is what they know. Yet, each dental office has a unique personality as do individual dentists. What often results behind the scenes in a dental practice is a type of chaos that cannot be defined in English as well as by the Russian word “Bezobratsia”. (somewhere between bedlam and a four-year-old’s soccer match). Then, there are pediatric dental offices.
Patient Tension. Since I know I am “preaching to the choir” here, I will add simply that not all patients are happy to be in a dental office. Their attitudes are not always understanding of even the slightest miscue.
Managerial Inexperience. In fact, there are many dentists who are excellent managers. However, that is not the majority. There is little management training provided for dentists during their required schooling. Unless they learn from family, outside reading, seminars, or the pain of “trial and error”, dentists are generally not possessed with the best, most effective management expertise. Good dentists (at least the type I want to patronize) are caregivers by instinct. That is almost a completely different instinct from what is required for effective and efficient managers/supervisors.
The picture painted looks pretty dismal, but there are a number of highly effectively operated dental offices. How can this ever be? Each dental office I have seen which is efficient, effective, profitable, and still calm has one thing in common. The entire team knows precisely what to do under any set of circumstances and does not waver nor require instruction throughout the day’s activities. Watching from afar one gets the impression that they are watching a well-rehearsed play being performed. There are no wasted actions, not bickering, and no indecision. From a professional businessman’s perspective it is a joy to behold.
Usually, this type of practice is a result of people who get along well and whose personalities complement each other. They are typically a fairly mature team having been together for some time. There is mutual respect and very little gossiping or backbiting, if any. Amazingly, there is seldom a lot of daily oversight from the doctor who is busy seeing patients while this team is handling everything else. Unfortunately, even these excellent practices can slip back into “bezobratsia” when a key employee leaves. Most often, the entire structure and organization is in the minds of the individual staff members themselves. A new person comes on board with a different personality and different experience, and the office stress level increases dramatically.
The only way to initiate order and guarantee its continuity is for the office itself to be the repository of the effective procedures, systems, and protocols. There are five basic areas of a dental office that must be organized into protocols for an assurance of smooth internal operations in a dental practice effectively competing in the free world. These can broadly be defined as scheduling, hygiene (not all specialties, of course), finance, personnel management, and marketing.
If a dental practice has these five protocols customized to fit that practice’s personality, written in clear understandable language, understood and followed religiously by each member of the team, and updated regularly for changes in staff and/or business conditions, that practice can operate smoothly. Admittedly, there is still a need to employ the right people, but there is more leeway in this area even, if they have a script to follow in any and all situations. There are many really great employees who leave dental practices, or are asked to “shine their lights elsewhere”, but who could have been highly effective had there been a real structure.
We seem to forget how difficult it is to get a handful of people to agree on a restaurant. Yet, in many dental offices there is the expectation that these people will work together smoothly and pull in complete unison without either a full-time supervisor to work out the kinks, or a common set of instructions to guide them. Many people love improvisational theatre, and I can handle a little of it myself, but the vast majority of successful plays have a script, which in detail tells the actors every little move to make. That way different actors can be cast without the play suffering immeasurably. While the actors may be good or bad, good theatre is created where, as Shakespeare wrote, “The play is the thing.”
Having lived about half my life in and around Dallas, I still have a fondness for the local sports teams, and I endure their trials and enjoy their successes. With the Cowboys, Rangers, Mavericks, and Stars this has been a rather serious roller coaster ride at times. Now, the Mavericks (a basketball team with an owner that Dallasites would call eccentric, but others generally find obnoxious) have the best record in the NBA, and they even seem to have a chance to compete for the championship. Bear in mind, this is Texas where basketball is that sport you use to fill the time between football season and spring football practice. I can’t really believe these guys could actually beat the major elite teams like the Lakers, Jazz, Sun, Pistons, Celtics, etc. in the playoffs. Somehow, I suspect that Lakers are just lurking in the background until the playoffs, and Shaq will put about half the Mavs in traction, but who knows? The Stars did win a Stanley Cup several years ago. Miracles do happen.
Have a great week,
Hurston Anderson
813-963-7228
PS: Internal organization can be accomplished either through the managerial expertise of the doctor or other manager. However, it is also possible to get help from others. We have a range of workbooks, which are designed just for the purpose of providing internal organization. This is the Protocol Series. In addition, there is a special discount right now for those who are interested in the getting the latest (2002 Edition) Practice Management Cookbook, which is the most widely used dental office reference book in the world.
Our website now contains information on these books, as well as other services we offer, past issues of Weekly Tidbits essays, an on-line form for a Free Practice Production Potential Analysis, and a place to sell and buy through bid surplus dental supplies and equipment. We are just getting deeply into using our website, so comments and suggestions are welcomed.
Your Hygiene Department & Our Website.
Just this last week we made major additions to our website http://www.WiseDentist.com One of these additions was adding an on-line version of our Practice Production Potential Evaluation Form, which allows dentists rather discreetly to ask us to analyze the progress of their practices based upon the answers they supply as compared to our data collected from thousands of dental offices throughout North America. Many dentists have availed themselves of this free service, and we are happy to complete these analyses, which not only give a numeric goal but ideas (broad, admittedly) of actions that should help, if change is suggested.
I have personally looked at about three dozens of the forms, and there are some great dental practices out there. Also, of course, there are some dental practices that are in pain. There is one thing that is true for all I have seen, and that is that none are maximizing the potential of their hygiene department.
Possibly, some might think that we are using the wrong base data in our model. Maybe we are like the mother who was watching her son, a new member of a high school’s marching band, performing during halftime of a football game. She was the picture of a proud mother as she watched her beloved child carry his trombone that Friday evening. When she noticed that not everyone was marching together, she nudged her husband and exclaimed, “Look there. Everyone is out of step but our Joey.” We are not out of step, and we are not using the wrong base data. We are using data collected from actual dental practices with which we have been working. My expectations for hygiene departments are based upon exactly what is being accomplished daily in numerous dental practices.
Why do the vast majority of dental practices under-produce in hygiene? Part of the problem is that dentists expect too little from hygiene. Oddly, there are voices out there that keep lowering this already low level of expectation. Most of them are respected “experts” who speak on the circuit or write articles for magazines (printed and internet). They say that hygiene is simply a “loss leader” in a dental office. It is a required service you have to expect to lose money performing. Yet, simple arithmetic would retort that opinion.
It would seem that too many dentists do not really believe in preventive dental care. It is as if the whole idea of frequent and comprehensive prophy’s and exams are just a vast conspiracy to get patients to come into the dental office twice a year. I have not attended dental school myself, so maybe that is one of those secrets that all dentists know, but those of us who are not dentists haven’t been told. Yet, given human nature, somehow I doubt that any group could keep that big a secret. I rather assume that good dental care, care that is designed to keep patients healthy and eating with their own teeth all their lives includes professionally cleaned teeth, frequent exams, and in cases of early gum disease specific attention to that disease. These treatments fall primarily within the purview of the hygienists, however. Hygienists don’t own dental practices. Most dentists can get a lot more excited about a root canal and crown than they can about two quadrants of root planing.
Another problem is that an entire dental practice has to be perfectly coordinated and in complete agreement on the importance of hygiene treatment, or the patient will not believe either. Unless we are convinced they will not be convinced, and you cannot fake sincerity. In most offices only the hygienists themselves are true believers, and sometimes even they are just going through the motions. It takes a great deal of concentrated, coordinated effort to keep the hygiene schedule full without cancellations and no-shows, and the hygienist is just one cog in the wheel.
A hygienist anywhere in North America can produce at least $1,000 per day from 750 active patients and an appropriate number of new patients. I include in this total all revenue generated from the hygiene appointment including exams and x-rays. Are there any patients in any practice who should not be appointed for regular cleanings and exams? Is a dental office properly serving patients who are allowed to skip these appointments without reminders? Is there a potential legal liability when a patient is not at least reminded of the importance of regular cleanings and exams? Certainly, there might be patients who could remain healthy while extending there re-care (recall) periods to a year, but is longer than that good dental care? Be assured for every 12-month hygiene patient there is at least one with periodontal issues requiring 3-month hygiene. We have discovered that these balance out over 750 patients in every practice.
750 patients who have two hygiene appointments per year represent 1,500 hygiene appointments. A hygienist who works 8 hours per day for 4 days per week will be available to see patients about 1,536 hours per year. By including an appropriate mixture of new patient prophy’s and periodontal maintenance, plus essential exams and x-rays, it is easy to see how a hygienist can produce $125 per hour. Okay, it seems high when you have a situation where the hygiene schedule is pre-booked with healthy mouths. Eureka! We have seen one of the problems. I believe staunchly in pre-appointing, and I plan to write extensively on that subject with hopes of quelling the movement the other direction. It is not pre-appointing that is the problem. It is doing it lackadaisically. It is not leaving enough room for more productive treatments in the hygiene schedule. Sometimes, that is because the hygienist would rather see “her patients”. Put her on an incentive plan, and you can see that attitude change quickly. There is a technique to this that can satisfy both needs. Trust me.
I believe that there is an unnecessary loss of an enormous amount of income throughout dentistry due to under-production in hygiene departments. The sad thing is that dentists could see their practices grow and prosper greatly from better attention to this area. I believe hygienists should be paid 1/3 of their production. That means that if a hygienist produces $1,000 per day for 16 days a month, I believe that hygienist should earn about $50,000 per year. That may seem awfully high to some dentists, but which is better; paying $150 per day for $450 per day in production, or paying $333 per day for $1,000 per day in production? Stinginess in hygiene compensation is its own reward.
I saw the data from a great dental practice this week, exemplary, top 10% for sure. One dentist, five chairs, one hygienist, 2 assistants, and 1.5 administrative specialists are producing $80,000 per month from 1,800 patients with 25 new patients per month. My guess is that this dentist is doing very well financially, too, probably about $350,000 to $400,000 per year. Unfortunately, hygiene is only producing $10,000 per month or $555.55 per day (18 days for them). This means that more than half the patients are not receiving adequate hygiene care. Actually, this should be a two-hygienist office at least, but even if this single hygienist’s time could be effectively used, this practice would increase monthly production by $72,000 per year, and most of this would be net income, less only the additional supplies and hygienist’s compensation. Still, there is the issue of the untreated patients, but that can be step 2.
I am not finished with this subject, but I am beginning to exceed the time most of you have to read this type material, I fear. I will revisit this soon because it is so important. I do want to re-emphasize that passively ignoring the shortcomings in most hygiene departments or simply blaming it on the hygienist are like flushing money down the toilet and ignoring the genuine dental care needs of many patients. Don’t let it fester. Fix it.
I am getting to be a hockey fan, more and more. Although a native Texan where the only ice we had during my childhood was used in our tea glasses, I am married to a Minnesotan who with all her relatives actually understands things like “red lines” and “icing”. So, I watched some hockey these past few weeks. It was too bad that so much controversy surrounded these Olympics. I am especially sorry for the Russians whose grip on the Olympic games has been harder and harder to maintain as so many of the old USSR provinces have split away and as spending for sports has been forced more into the private sector due to their financial crisis. In my personal opinion, against great odds they still performed remarkably well, but it is difficult to accept a reduced position no matter who you are. Most of all, today, I want to tell a secret to all my Canadian friends. “Don’t tell my American countrymen, but I couldn’t help but be proud for you as you took home both Gold Medals for your national sport, hockey. Go, Canada!” Curling is really from Scotland, anyway, I hear.
Have a great week,
Hurston Anderson
813-963-7228
Visit http://www.WiseDentist.com and let me know what you think. There are viable solutions to difficulties in hygiene in the workbooks and consulting sections. Also, you will notice that we have completed the third edition of our Practice Management Cookbook, which we are offering at a substantial discount to previous cookbook purchasers, as well as to new purchasers. This website is still, obviously, a work in progress, and I have spent much too much personal time with my involvement. I wanted to delegate, I tried to delegate, but in the end I lost my patience (after losing a substantial amount of money, first). I will be less critical of others who fall into the same trap in their dental offices.
Happiness, Success, and Love in Dentistry
It was his first visit to this county seat just one county west, and things were certainly bustling due to the construction of the new dam. His parents and younger siblings had recently moved here because his father was supplying cedar charcoal for the WPA project. The Depression had devastated the family forcing the loss of the family farm originally acquired by his great-grandfather for service in the Texas Revolution, as well as the bank, grocery store, garage, produce company, and the big house in town. These setbacks had delayed college, so at 28 he had been teaching for just two years.
Fortunately, the past few years had been much kinder to all. This reunion was just a week before the school was to reopen and immediately after his three-month trip to Mexico visiting college friends and boxing for small purses along the way. At 6’3” and about 190, he was in the best condition of his life, and the tan he had gotten in Mexico along with the brand new shiny riding boots, white shirt, and tan jodhpurs (actually in fashion at the time he insisted much later) earned him extra long glances from the young ladies in the bus station. He pretended not to notice.
She had moved one county east from her original home with her parents and younger siblings because her father had lost his welding shop in the Depression, and there was always work for welders on the new dam. At 22 she was beginning to be considered an “Old Maid” by some in her family. Almost 5’10”, reed thin, bespectacled, and a bit bookish she was a definite challenge for most of the fellows around town. Her younger sister had already presented their parents with a grandchild while she was toiling away at the dry cleaners in town not even remotely interested in anyone romantically. But now was the best time of the day. The supper dishes were dried, and she had just settled on the front porch swing with a glass of lemonade to read while there was still enough light.
As he rounded the corner just two blocks from his parent’s home carrying his beat-up suitcase with hat pulled down low to keep the sun out, he glanced toward the porch of the house across the street. Their eyes met a little longer than normal, and he tipped his hat while smiling broadly. Later, he said she was the prettiest girl he had ever seen. Later, she said that he was fresh, obviously full of himself, and dressed oddly, but he was somehow interesting.
54 years later almost to the day she departed after several months of suffering. He really never got over her death, and when he died a little over five years later at Thanksgiving he had just been talking about how anxious he was to see “Mama”, his nickname for her. Times had not always been great for them and their five children, but there was always love. Love for each other, love for their children, love for their country, love for God, and love for humanity in general. It is the most powerful force on earth, the key to happiness, and it costs nothing but the courage to take a risk. If you want to be happy, find reasons to love.
Francis Hutcheson, the early eighteenth century Scottish philosopher who along with contemporary Englishman John Locke is often credited as the father of the modern democratic movement taught that “The desire to be moral and virtuous, and treat others with kindness and compassion; the desire to be free including political freedom; and the desire to enjoy our natural rights in society, as civil rights, are universal desires. Human beings want these rights because these are the things that lead to human happiness.” We in the West who live in the most powerful, most prosperous society in the history of mankind too often waver from these basic truths.
The way to find happiness in any enterprise including a dental practice is to do the right thing even when it is not easy; to treat everyone with whom we deal fairly, honestly and respectfully; to establish sound internal systems within which the entire team can operate effectively; and to recognize the beauty in the humanity of all. As the leader of an enterprise, we have unique opportunities and unique responsibilities. Among these responsibilities is protecting our staffs, patients, and families from disruption, which might be caused by people who are not capable of operating in a civilized environment. This includes belligerent and unruly patients, troubled staff members, and, even ourselves sometimes.
We cannot change others who are uncomfortable with a warm, caring, stress-free climate, so we must take the responsibility to replace them, but we can change ourselves. Too often, dentists cannot understand why turnover is so high, why morale is so low, why stress is so high, why production is so low, and why everyone seems so tired all the time. There is even the belief that really successful dental practices are running at sprint speed all the time. Our modern culture has convinced us that we can only succeed as a hard charging, take no prisoners, self-indulgent, money grubbing type-A person. Those with this personality sometimes do have success, but it is ephemeral, and it comes with no happiness whatsoever.
I think the problem is too often financially driven. Since we are running a financially inefficient practice, we think we must push harder to produce more. The real answer is to cure the disease not just treat the symptoms. When a dental practice has a great team (not the word only, but the reality), effective and efficient internal operational protocols, and a leader who will not get in the way, it cannot be stopped. We see this regularly. Dental practices that have never produced more than $65,000 per month click internally, and almost overnight they begin producing more than a million a year. Recent graduates open de novo practices, and they are consistently producing more than $60,000 per month before their second anniversary. The reason is remarkably simple. These dentists hire the right team that complements them, they install tried and true internal systems, and they do dentistry rather than trying to be managerial tinker-ers.
This installment marks the sixth year I have been writing these Weekly Tidbits of management advice for dentists, and I know I get monotonously repetitive sometimes, but that is because this is so very simple. Yet, it is not intuitive. There are only two reasons that a practice is not performing effectively. Either the team is incompetent reflecting on the hiring judgment of the boss, or it is working with ineffective procedures. 99% of the time it is not incompetence. It is never some uncontrollable external element that holds us back like demographics or the economy or whatever. In the words of the great philosopher, Pogo the possum, “I have seen the enemy, and he is we.”
I do not know anything about figure skating. I couldn’t tell a Lutz from a Salcow (sp), but I do know when the fix is in, and a very sad thing happened two nights ago in Salt Lake City. This is particularly disturbing because sports to me have always had a certain purity. The fastest runner wins the race. Somehow I hope to hear that this was all not political, that there are those who are reliable, unbiased experts knowing Lutzes from Salcows who can analyze the two performances and point out why the gold medal winners deserve their victory and the silver medal winners were properly treated. Both pairs seem like great competitors. Can there be nothing pure and honest, even the Olympics?
Have a great week,
Hurston
813-963-7228
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I cannot honestly state that it is the only way to provide the internal structure necessary, but I know that we have workbooks and services that do work. The most popular of our workbooks is the Practice Management Cookbook ($199.95 plus s/h of $12.50), which provides a reference source to solve daily questions. It is chocked full of sample letters, scripts for handling different situations, marketing ideas, personnel management tools with examples, and much, much more. Just the Policy and Procedure Manual alone will usually cost many times more. (fax cc#, exp date to 813-963-5974)
The Protocol Series is designed to help dental offices to hone and document their internal procedures in the five critical areas including scheduling, hygiene, finance, personnel, and marketing. Workbooks can be purchased individually at $179.95 plus s/h or they may be purchased as a set for $750 s/h included. It is not necessary to reinvent the wheel. (Fax cc#, exp date to 813-963-5974)
If you don’t think that a book will work in your office because it requires so much of your time or because you cannot wait, you really should give us a call. Our in-office consultants are the most reasonable in the country, and we have incredible references. Our clients always increase monthly production by more than $10,000 per month, and often that is not even their objective. By solving the internal issues the increase is automatic. To start the ball rolling, just email me that you want a free analysis. That will tell us both if we should proceed.
Parkinson's Law Applied to Dentistry (Follow-up)
Last week my Weekly Tidbit essay was about how Parkinson’s Law is applicable in dental offices. A very commonly asked question is represented by the following exchange between Dr. R and me.
OK Hurston,
What is the proper production of a hygienist and is that part of your ratio? I have always heard that a hygienist should produce 3x her salary. If that is the case, contemplate this. Suppose I have an office in which the staff is properly compensated at 20%. Now I decide to add another hygienist. She costs 33% of her production and accordingly raises my staff costs above 20%. I would play this game all day assuming (minus increase in variable expense) she is going to be 40 to 50% pure profit. IMHO hygienists can throw this ratio off and should be considered outside other staffing ratios as they are producers. What say you?
K. R., DDS
Dear Dr. R,
One of the dangers of my writing these weekly essays trying always to include something of real value while maintaining some degree of brevity is that clarifications by necessity are brief or not included at all. In this case I think that can lead to some confusion, which might cause logically thinking dentists to assume there are flaws in the monitors.
When I first saw these monitors being used more than twelve years ago my background was not internal operations in dental offices. I had been a business manager/owner with experience in accounting who watched statistics and daily/weekly results regularly. The company's technical staff was preparing presentation slides for one of the many seminars given by Dr. D who owned the company. When I saw them this same issue immediately sprung out at me. I was told that I was just pulling one element from an entire formula and that would not work. The slides and Dr. D went off for a weekend seminar, but I was convinced that there was a flaw. On Monday, armed with my calculations I met with the practice management consulting staff and the General Manager. Their explanation partially convinced me, but it was many years of data collection and modeling since then that has absolutely convinced me that there is no conflict
As they explained, "When production in hygiene increases it is because there are more patients being seen. Even in America, with the best dental health in the world it is impossible to see more patients without diagnosing additional required dentistry. Measuring this over time and in numerous dental offices statistics show that the amount of dentistry generated from additional hygiene production is roughly equivalent to the hygiene production." There were data sources available for me to study, but I was never totally convinced. Now, having owned our own practice management company for more than ten years my wife (the former General Manager of the company mentioned above) has absolutely proved this to me. That is why I constantly write that hygiene drives the growth of a general dental office. There is no way in a real world situation to increase hygiene production while not also increasing doctor production. There are not that many perfectly healthy mouths in any practice, and if there were they should be spread among hygienists.
In the real world the situation would follow a scenario like this example. A dental practice is producing $50,000 per month and salaries are $10,000 per month. A full-time hygienist is added who is paid $250 per day. Her production is $750 per day. (Minimally accepted amount. Less and practice is losing on her at this salary.) In a 16-day month her hygiene production is $12,000. However, an additional $12,000 in doctor production results from all these exams on additional patients. This means production is now $74,000 per month. The additional salary expense is $250 per day for 16 days, or $4,000 per month. Total salary cost is now $14,000 per month for $74,000 production. In fact, now our salary cost as a percentage of production is 18.9% meaning that there is $800 per month, which should be designated as bonuses (or part-time help) for the non-production staff. The Hygienist has been paid her one-third already. What if hygiene does not produce nor generate the designated production for the doctor? That flaw must be rectified in the Hygiene Protocol, which is proved to be malfunctioning.
When we analyze a dental practice we look first at the major monitors. If there is something amiss in one or more of these monitors, we then perform a much more in-depth analysis to uncover the real issues. It is somewhat like looking through the lens of a camera (or possibly intra-oral camera) to take a picture and then zooming in for close-up views of particular areas. It is necessary to get the entire view first, but almost inevitably that will dictate a closer look at one or more other areas.
Gross Production.
There is one other area that can cause confusion in dental offices when calculating monitoring percentages. That confusion involves an understanding of what is meant by gross production. Very often monitors are misread because either collections or net production are used as the basis. Gross production is the absolute total of all dentistry that is performed utilizing the supplies, facilities, personnel, etc. regardless of what payment may be received. Gross production is not calculated using any discounted fees whether for family, staff, professional courtesy, barter, insurance write-off, capitation, etc. Gross production is the pure undiluted total of all dentistry performed in the practice. Many, many dental practices do not count everything due to concerns about taxes, etc. If the true gross production is not available it must be ascertained as best possible before monitors will be correct.
An example of how this can skew monitoring results would be as follows: A dentist pays $10,700 in salaries monthly on recorded production of $50,000. It seems as if the salaries are too high at 21.4%. However, in this example the dentist actually performs discounted dentistry such as for employee benefits, for family members, for barter, and for professional courtesies totaling the national average of 7%. This means that there is really $53,500 in dentistry being performed from this overhead. Salaries are not too high in this case. It is wrong to penalize the staff for this unrecorded dentistry. The practice owner, not the staff, makes those decisions. The dentist must bear any cost associated with this unrecorded production personally. In this example, the additional salary cost of $700 must be paid from doctor's portion for it is the doctor who gets the benefit of providing this unrecorded production. This benefit may be in staff retention, community relations, etc., but it is entirely the responsibility of the dentist.
Great question. Thanks. I hope this clarifies a couple of apparently confusing issues associated with calculating total salary cost at 20% of gross production.
Have a great week,
Hurston
813-963-7228
Hundreds have taken advantage of our free practice evaluation service. The procedure is simple. I email a simple 14-question form, and you email it back to me completed. Then, I have your responses to the questionnaire input into our computer model representing the thousands of dental practices across North American with which we have worked. From that analysis we can make recommendations about the potential that the practice should be able to achieve including some ideas of how to precede toward realizing this potential.
Our management workbooks are terrific based on the real world. They can help to reach potential, and if more information is needed about them, email.
There are two really valuable ways we can assist, however. First, we can do an in-depth analysis of the practice. It is the next step after the 14-question analysis, it requires that we visit your office for one or two days, and there is a fee to cover the extensive analysis and travel costs. I make as many of those as possible, and I personally direct all these In-depth Analysis Studies. The product is a bound report of the status of the practice, its historic progress, and its future potential with very specific suggestions.
Also, we are still accepting a few more consulting clients for in-office management consulting. This is a yearlong relationship in your office, which implements the actions necessary to realize the practice’s potential. Our references are excellent nationwide.
Parkinson’s Law Applied to Dental Offices
C. Northcote Parkinson in his 1957 book, Parkinson’s Law and Other Studies in Administration, wrote, “In any public administration department not actually at war, the staff increase (per year) will invariably prove to be between 5.17 % and 6.56%, irrespective of any variation in the amount of work (if any) to be done.”
The point is that increase in staff will progress regardless of whether the work increases or decreases. While Parkinson’s research and statistics were taken from bureaucratic governmental organizations, the same is true in dental offices. It is much harder to offer a percentage of growth because individual organizations are smaller. However, I believe that the range he suggests averaging 5.865% is about right. That means that, if left unchecked it will require twice as many staff members to perform the same tasks ten years from today as today. The amazing part is that the dedication of the staff members, their hours worked, their general attitude, and other factors or generally irrelevant. The size of staff will grow. Below, I will list some of the reasons.
In dentistry it is even worse than in general administrative areas. The reason is that staffs are already smaller, and must inevitably grow in a stair-step manner. That is, we start with one staff member and grow by adding individuals one at a time. This means that as we grow it is only for a split second that we are actually properly staffed. For the majority of the time we are either overstaffed or understaffed. My experience is that overstaffing is ten times more frequent than understaffing.
This stair-step staffing approach has the effect that in most dental practices the second person is added when the work exceeds 100% of the first person’s capacity (in a perfect world, much less in the real world). Two people must split between them the 101% of a full-time job. Consequently, almost half the time of both staff members is wasted with make-up work from the doctor, looking busy, personal calls, gossip, needless repetitive activities, etc. As the practice grows, there is less and less time for the needless tasks which have by now often become institutionalized because essential tasks begin to consume more and more time. The problem is that it becomes difficult to differentiate between tasks that are essential and those that are not essential but have become institutionalized during overstaffing periods. This means that staff members often honestly feel they are overworked when in fact much of what they are doing has been the result of developing bad habits during the times that overstaffing existed.
How can a dentist ever keep the staff properly productive during times of overstaffing due to stair-step hiring? (see end)
Overstaffing is an epidemic in dentistry. Frankly, we seem unaware of the fact that dentistry is an industry with enormous wasted potential. In the real world, the doctor often cannot recognize it because he/she has become part of causing it to happen. Owners of overstaffed offices are not necessarily pinching pennies, however. A well-managed dental office in North America in the 21st century is a fantastic business. Any dental office should be able to return to the dentist/owner between 40% and 55% of net production. This should be the case whether the gross annual production is $250,000 or $2,500,000. Certainly, staffing to maximum potential is only part of the answer, but it is a vital key.
Raising production can cover any number of overstaffing inefficiencies. A well-managed general dental practice can operate at peak performance while paying only 20% of gross production for all staff salary costs (including all taxes, uniforms, retirement, bonuses, hygienists, etc.) while still paying the staff extremely competitively…anywhere in North America. This is true, absolutely, and I can prove it in any instance. How do I compensate for the stair-step staffing issue, then? It is simple. There is a production potential from that staff that is not being reached. Until production reaches potential for the staffing level we are overstaffed.
Parkinson’s Law of ever expanding staff size is true. There is only one way to prevent it. On a regular basis it is essential to get back in shape…to clean out the excess poundage that has accumulated over the years. Get an outside look at the size of the staff and the size of the tasks to be certain that no added poundage has been gained during times of overstaffing. It starts with a simple arithmetic problem. Add up all costs for salaries and other compensation for staff during 2001 (not including doctors, of course). Divide by gross production. If the percentage is more than 20%, it is time either to increase production to the proper level, reduce staff to the proper level, or (more probably) adjust in your situation appropriately.
I know that I will receive many, many emails form those who will be offended and contend that my 20% figure is impossible. Some will be so incensed as to ask me to discontinue sending these tidbits. It happens every time I write this. However, I do not enjoy this so much as to tell dentists only what they want to hear. Sure, I love to write these weekly (almost) letters, but only because I can tell the truth. I have personally looked at more than two thousand dental offices’ individual financial results, and our company combined can multiply that number several times. The reason that we have never, ever failed to help our clients increase production in their practices by $10,000 per month is that unrealized potential is always there…always, in the most efficient of practices, even. However, it is the dentist himself/herself who suffers from not achieving potential, so I suppose it is as it should be.
Okay, I reread that and I sound like an obnoxious, know-it-all jerk. Sorry. It is just that we have a unique perspective on this issue. My nature is to soft-pedal, but I would be doing a disservice to those who read this faithfully.
Who will win the Super Bowl? Probably, St. Louis or Pittsburgh, but we here in Tampa Bay have our dreams and remote chances.
Have a great week,
Hurston Anderson
813-963-7228
Hundreds have taken advantage of our free practice evaluation service. The procedure is simple. I email a simple 14-question form, and you email it back to me completed. Then, I have your responses to the questionnaire input into our computer model representing the thousands of dental practices across North American with which we have worked. From that analysis we can make recommendations about the potential that the practice should be able to achieve including some ideas of how to proceed toward realizing this potential.
Our management workbooks are terrific based on the real world. They can help to reach potential, and if more information is needed about them, email.
There are two really valuable ways we can assist, however. First, we can do an in-depth analysis of the practice. It is the next step after the 14-question analysis, it requires that we visit your office for one or two days, and there is a fee to cover the extensive analysis and travel costs. I make as many of those as possible, and I personally direct all these In-depth Analysis Studies. The product is a bound report of the status of the practice, its historic progress, and its future potential with very specific suggestions.
Also, we are still accepting a few more consulting clients for in-office management consulting. This is a year-long relationship in your office which implements the actions necessary to realize the practice’s potential. Our references are excellent nationwide.
During times of overstaffing as a result of the stair-step hiring issue the excess time should be productively spent on marketing activities.
Confessions of a Chronic Canceller
One of the toughest things in some practices is dealing with a rash of patients who either call at the last moment to cancel or who simply do not show for appointments. In only hours a really healthy schedule for a doctor or hygienist can turn into a disaster. The fact is that it is not necessary to suffer with disrupted schedules given a strict adherence to appropriate procedures.
First, no patient should be considered to have an appointment unless there has been a positive verification one or two days beforehand by telephone. Leaving a message does not qualify. When I traveled a lot internationally, I once came back from a business trip to find a message left after my departure reminding me of an imminent dental appointment. The practice thought I had been confirmed and were actually annoyed with me when their schedule was disrupted. In fact, I was in Africa on urgent business. Positive verification is the patient (or parent) actually speaking with the designated confirmer. If a message is left, it should request a call to confirm. If a confirmation call does not come, an additional call must be placed. Often, this means there must be a dedicated staff member who makes a few calls from home each evening. Maybe she comes in a little later or leaves a little earlier. There are many working moms who would appreciate the opportunity to make calls from home in exchange for this sort of flexibility.
Second, know your patients. Never schedule patients who do not have a good record for keeping appointments on Monday morning, and leave room for emergencies as are typical for the practice. While sometimes it is necessary to sacrifice an appointment time for a patient with a spotty record, never sacrifice several appointment times at or near the same time.
There are some consultants around suggesting not pre-booking hygiene. This is coming from people who have been out of direct involvement with dental offices too long or who are willing to “burn through” too many patients to fill a hygiene schedule. To maximize the hygiene production from active patients, forego the computer capabilities that will automatically send cards. There is no substitute for a patient receiving a card addressed by the patient personally. With all the junk mail we get it is essential to be unique. Nothing gets a patient’s attention like a card in his/her own handwriting. About a week after the card should have arrived call the patient to confirm the card’s arrival and the appointment. Also, call to confirm again no more than two days prior to the appointment. Using this method will allow a hygienist to produce about $1,000 per day from only 750 active patients. Yes, there is some work involved, but it is well worth the effort, and it works.
Keep a large VIP list for hygiene and doctor patients. Depending upon many factors including specialty and demographics this list will be larger or smaller than average. This list should include people like me. No matter how hard I try, I cannot control my schedule, as I would like. Just as I am ready to leave the office for a dental appointment, I always get a call. In my case, now, it is usually a client and sometimes I can simply return the call afterwards…but, not always. Frankly, a client’s problem is sometimes more urgent than my semiannual prophy at that specific time. Previously, I had stockholders and/or bosses whose need to speak with me was also more important. Does this mean I lack respect for my dentist or hygienist? Absolutely not. However, my clients or someone’s stockholders/bosses provide the income that feeds the family. They must come first. For me, being on a quick call list is the absolutely perfect solution. I am only five minutes away, and a quick call has at least a 50-50 chance of getting me in for my cleaning or other non-emergency need. When presented to me as a preferred service I am even honored. The problem is that most practices see these patients as a nuisance and treat them that way. These patients are the “quick patch” for the “flat tire” schedule. Again, it may take a dozen calls and an attitude change, but that is better than a gap in the schedule.
Since the average dental practice loses between 10% and 15% of scheduled production due to cancellations and no-shows, this is a very important area. Simply sticking to a solid Scheduling protocol including effective cancellation and no-show procedures can increase a $500,000 dental practice’s income by $50,000 to $75,000 per year. This can be done without additional staff or hours in the office. Also, it can remove a lot of guilt from chronic cancellers like me who are really good patients but who do not have a job with a predictable schedule.
Well, the good-natured competition for best (or most) lighted house here in our neighborhood here in North Tampa has really heated up this Christmas season. Just a few years ago stringing a few icicle lights would do the trick. This year we have escalated to animated reindeer and angels. It seems like every night someone slips out and adds something new. When do these guys sleep? I quit. Well, then again, there is this 7’ animated Santa on sale downtown that might fit on the roof next to the chimney.
All kidding aside, I think the possibility of returning to some semblance of normalcy given the events of the past few months is welcome to all. Prayers and thoughts for all those who suffered great personal loss on 9-11 or are enduring the absence of and the fear for of loved ones directly involved in the conflict. And personally, I feel great sorrow for those innocent Afghani casualties. It seems they have suffered so much for so long. It is the same in all wars. Wars are not fought between democracies that have chosen their leaders. Autocrats seize control and then put their controlled citizens in peril by their egotistical actions. Maybe the aftermath of this conflict will give the Afghani people a chance for a better future as has been realized by Germany and Japan a couple of generations after WW2. God willing, and I think He is.
Have a great, though probably hectic week,
Hurston Anderson
813-963-7228
If scheduling is a problem in your office, we offer a special protocol workbook in our Protocol Series on scheduling. Like those on the other four critical areas, the Science of Scheduling can be purchased by faxing cc#, etc. to 813-963-5974, calling above, or emailing (no cc#’s by email. Not secure). Much of scheduling as well as general recipes to solve all internal operational problems in dental offices are available with Practice Management Cookbook. Protocols are 179.95 each plus shipping/handling of 12.50. Cookbook is 199.95 plus s/h.
We cannot take additional consulting clients to begin in January, but there are a couple of openings for February and March. If interested, contact me ASAP.
Retiring to “The Life of Riley”
I grew up on the outskirts of Dallas in what my father always called the “rural-burbs”, small towns close enough to the city for the fathers to drive to work yet far enough away to have a few acres for horses, chickens, and other 4-H projects. Most of our neighbors were like my parents. They had been raised on family farms, but they had moved to the better opportunities of the city. We lived near Forney, the town where we went to school that was twenty miles (and twenty years) east of Dallas. And no, our high school mascot was not the “Gators”.
Just north some twenty or so miles was a similarly sized town where we often went to play Little League baseball and football games. As you rode into town after driving past miles of hay pastures, cattle ranches, and cotton fields, just to the right there was an old faded sign with a picture of a man lounging on a hammock. The caption below read, “You’ll live the life of Riley in wide awake Wylie”. I have no idea if that sign still exists. It has probably been thirty-five years since I was in the area and it was pretty old then, but I remember thinking that was what it probably meant to retire, enough money to pay for a hammock strung between two trees and a tall glass of iced tea to keep you cool. (The “Life of Riley” was to a black and white television program of the mid-fifties starring William Bendix.)
There are times when the pressures we face daily seem particularly heavy. The staff is in revolt, patients are complaining, the kids are hellions, and our wife/husband seems to be pushing those buttons that only spouses know. A hammock and a big glass of iced tea with a sprig of mint sound pretty good then. Here in the 21st century though, I don’t know very many professionals who would really want to spend the last decades of their lives idly. We are likely to seek a more active lifestyle.
That is an important consideration when it comes to planning for retirement. Independent professionals, like dentists or writers/speakers/consultants, do not have a particular age for retirement, like 60 or 65. Without a particular target date planning for retirement sometimes gets delayed time after time. While it is not necessary that we actually retire at a certain time, it is necessary that we be prepared to do so. Personally, I cannot see myself spending all my time in leisure. I just do not have that many hobbies I enjoy more than the work I do. Still, it is important to know that I could quit, if I felt compelled to head another direction with the remainder of my life.
There are specialists with big titles and big expensive offices who charge tens of thousands a year to help dentists plan for retirement and to monitor their financial progress. My guess is that those who engage them certainly feel that the cost is far outweighed by the value of the advice, so my point is not to criticize these professionals. However, it really is not all that complicated to plan for retirement.
Let’s look at an example that does not consider inflation and taxes. While these considerations are important they can be calculated after the basic plan is in place. (If you aren’t interested in the details, skip to the *****.)
Suppose there were a 40-year-old dentist who owns a dental practice producing and collecting $500,000 per year. In addition, the practice has about $50,000 in equipment and supplies, but there is also a $50,000 debt on the practice. This dentist and his family live in a home worth $400,000 and owe $250,000 on the mortgage. All personal assets are worth $150,000, but there is $100,000 in personal debt. So far, he has $75,000 in his retirement account.
Net value of dental practice = $250,000 (1/2 annual production/collections + equipment – loans)
Net value of personal property = $200,000 (Home value – mortgage + personal property – debt)
Retirement account = $75,000
Total net worth = $525,000
This dentist wants a plan to be able to retire at the age of 55. All three children should be through college, but they are realistic enough to know that they will need about $30,000 each year for expenses related to their children and grandchildren. All other expenses for a rather active lifestyle and some travel mean that they will need another $10,000 a month in cash flow. So, he needs about $150,000 per year in passive income to retire rather comfortably. Since he does not know how long he will live, he needs to have this income without touching his assets. Assuming a 5% annual income on his assets, he will need $3,000,000 in assets to retire at age 55. At present he has $525,000. So, he needs to increase his assets by $2,475,000 over the next 15 years. How can he do this?
First, we look at the practice value. Assuming a 5% growth per year his practice should be worth about $520,000 plus equipment. Let’s say about $600,000.
His home will be paid off and will have increased in value about 3% per year. That creates a value in the home of about $625,000. Personal property will increase at about 3% as well increasing that value to about $312,500.
Practice value = $600,000
Home value = $625,000
Personal Property = $312,500 (cannot be used to create cash flow)
Property Value that can be used to create cash flow = $1,225,000
Additional assets required to produce a cash flow of $150,000 per month at 5% = $1,775,000
Annual contribution needed to reach $3,000,000 assuming 5% earnings on contributions. = $80,000
While this may seem difficult for those dentists who are already striving to makes ends meet, it is important to know where you stand. Several things should be noted. This is a very conservative approach with no need for risky investments. Heirs would stand to inherit the entire $3,000,000 ultimately, so no other provision for them should be needed.
*****Since the average dental practice in North America is operating at about 55% of potential, it is only necessary to become efficient enough to operate at 63.8% of potential to earn the additional amount for a very comfortable, early retirement given this sample. This can be accomplished with better internal protocols and procedures and a bit more proactive attitude among the entire team. There is no need to make risky investments, etc.
Admittedly, this can look pretty confusing especially when you calculate taxes and inflation, but it really all boils down to putting together a plan and meeting that plan through internal efficiencies. Every situation is different. Some are rosier and some are much bleaker, but the issue does not disappear simply because it is ignored. Certainly, the sooner a plan is established the better, and there will be unexpected circumstances that may vary the plan through the years. Still, whatever the actual situation is must be considered, and a plan must be formulated from there. Also, I think it is wise to plan to completely retire at a particular age even though many of us will never do so. It gives you the flexibility to live a much better later life.
I missed sending a message at Thanksgiving for several reasons including family visiting, computer virus problems (Watch out for Badtrans.), and a short case of the flu. But, I still have a lot for which I am thankful. For one thing, I wanted to thank everyone who reads these messages and comments. I know sometimes I get a little slow in answering, but I really enjoy getting to know you and gaining the wisdom of your individual experiences. All of us seem to be so busy that your taking your precious time to send comments can be a great sacrifice. My thanks to you.
Have a great week,
Hurston Anderson
813-963-5974
PS: Call above # or email me for information about special internal operational workbooks including the Financial Management Workbook that contains a form to create retirement plans. Also, you pretty much know by now how this year will end financially. If you need to do better next year, we have openings for a few new consulting clients beginning next year. Among the things you can expect are an increase of at least $10,000 per month in practice income and our professional assistance in all your financial planning needs including retirement planning.
REMEMBER! Your rewards in life are determined by the kinds of problems you are willing to solve for others. Your income depends on the complexity of the problems you solve. If you solve problems that many others can also solve, your income will be lower than if you solve problems that very few others can solve. (paraphrasing author Mike Murdock)
October Production Results
I was anxious to see the monthly results from our clients around the country for October, the first full month since 9-11. Weeklies had been rather good, in general, but the last week was going to tell the tale. There had been a softness in the last half of September especially in hygiene recall that suggested a bothersome trend. After getting all the monthlies for October I was amazed. A solid 40% of our clients had all-time record high production in October. There seemed to be no specific regional factors, and there were other dynamics involved, but it was a surprising discovery for me given the conversations and emails during the month.
Admittedly, this should not be considered a good statistical survey because we are hired for this very purpose and most of these clients were at that critical second to fourth month of our time together when the new techniques are taking affect. Still, the feedback from emails that I had received from non-clients around the country during October had not been very encouraging. There is an interesting phenomenon, though. Very often dentists think things are worse (or better) than they are in production based on their overall mood. Many are still feeling uncomfortable since 9-11, so the monthly results were a moderate shock to me. Few predicted setting new records.
Why did this occur? As I stated before, partly it was due to our involvement. We encouraged them to become very proactive after the concern we felt in September. Newsletters were part of that pro-activity, but also there was a lot more telephone contact with patients who had cancelled in September. Some of October was simply the September patients rescheduling after being called. Another thing that seemed to help was the heightened awareness, the increased focus. I believe the doctors and staffs in these practices were just a little more diligent than they had been before 9-11, a bit more serious about their jobs. November will tell us if that will continue, but October was a genuinely pleasant surprise for me. Even the 60% who did not break records performed better than they had expected even several who had turnover, vacations, illness, etc. All in all October was a great bounce back month in most of the practices we monitor.
There is a lesson to be learned, I think. Even under duress we control our own destinies. Too often, businesspeople blame circumstances supposedly out of their control for their difficulties. In reality, our success or failure is completely up to us and how we deal with the situation. A little remembered fact is that many of today’s largest companies were founded and grew during the Great Depression. Alternatively, many purportedly great companies failed during the same period. In each case it was due to the attitudes and efforts of the owners/managers/employees of the respective companies. Seminal events like 9-11 can shake us into new paradigms, cause us to look at the world around us differently. For some, this will be a new birth. For others, it will have a very negative effect.
I have been worried that too many dental practices have become complacent during the past ten years. The 1990’s were a time of incredible prosperity in the US, the best in our history. Tens of thousands of dental offices were created or changed ownership during this period. Almost no dentist or staff member can remember when there were difficult financial times nationwide. Sloppy, inefficient, ineffective habits were formed. Concentration on superior customer service slipped. Scheduling became too often a matter filling blank slots from telephone calls or at the front desk. It seemed not to matter what was done the practices did pretty well. Creativity and hard work seemed unnecessary. This was not the case for all practices, of course. Some maintained good habits and discipline, and these practices soared with the economy. It is sort of like an airplane catching a tail wind and maintaining speed by cutting back the engines. Keeping the engines running only increasing the success. There is no reason that any dentist should not excel during those types of conditions. Yet, many, many dentists did fail, and many others struggled.
Unless there are additional cataclysmic events this Recession will be over by early summer. (I have just heard the news of the Queens AA crash as I am getting ready to send this out. At the time of this writing it seems to be unrelated to terrorism and an incredible coincidence which should have only a few days effect on consumer confidence. I do feel so terribly sorrow for all our fellow Americans in NY, though. It seems to just keep coming for them.) Those dentists who refocus and stay proactive for the next few months eschewing complacency will see no negative effects whatsoever. Others will keep on in the same way as before and lose tens of thousands of dollars in income placing themselves in financial stress for years to come. Some, will even be forced to declare bankruptcy. There is a simple solution. Watch your business very, very carefully. Look every day at your pertinent monitors compared to goals. Refocus your efforts and those of the entire staff toward more efficient and effective activities. Eliminate deadwood quickly, but humanely. Remember that doing the same old thing as before during strained conditions will not work. Just as in everything else in life, modify your approach to the changing circumstances. Do not let circumstances control your life and business. In short, avoid lethargy and run a tighter ship.
Baseball is now becoming a worldwide sport, but it retains a lot of the American personality. This year’s World Series was one of the most exciting I have ever witnessed. On the one side is the powerhouse NY Yankees who have won so many championships that it boggles the mind, including the last three in a row. They are not only great athletes, but they are individually great role models for youngsters. Examples would include Derek Jeter, Paul O’Neill, Bernie Williams, etc. Besides NYC had just been attacked by hateful maniacs. How could anyone not root for them? On the other side is one of the newest teams in the league. A team which chose to sign many older players who have never been in a World Series and who were getting possibly their only chance. Examples would be Mark Grace, Matt Williams, Randy Johnson, Curt Schilling, etc. How could you not want to see these future Hall of Famers in the twilight of their careers get what they had hoped and prayed for since Little League days? Then the Yankees went down 2-0 due to masterful pitching. They looked beaten. Then, they came back in NYC three nights in a row with some great pitching and timely hitting. The President even threw out the first pitch, a strike to any umpire, to a thundering applause in a city where he received very few votes a year ago. But then, back in Arizona the old gamers Schilling and Johnson made their statement rather emphatically, and somehow it helped this country recover. I believe it was an example of America at its best, a gift from the National Pastime to a hurting people.
Have a great week,
Hurston Anderson
813-963-7228
PS: If you need to run a tighter ship to steer through these troubled waters, you must get better organized. Our workbooks on Scheduling, Hygiene, Finance, and Personnel from the Protocol Series are 179.95 each plus shipping and handling, and that is their purpose. Consider also the Practice Management Cookbook, our most widely used reference book at 199.95 plus s/h. I will admit that some have purchased these books and put them on the shelves, as if that alone would help. However, those who have actually used the books have had incredibly positive improvements in their practices. Fax cc#, etc. to 813 963-5974.
Also, we are able to handle a few more consulting clients. We have references from coast-to-coast. Call or email wisdom@wisedentist.com to discuss.
The website for the SMILE, America! Campaign is http://www.SmileAmericaCampaign.com. If you are looking for a great way to get your practice involved in raising the spirits and moods of the country, take a look. It is just starting in most offices, but the initial reaction has been quite positive.
A (True) Tale Of Four Dental Practices In The Heartland.
The story begins five years ago at a Dental School in the middle part of the US, not on an ocean and not bordering Canada or Mexico. Two first year students were being advised by a second year student who had already distinguished himself. For the sake of simplicity I’ll call them Mr. D, Mr. B, and Mr. H. All from the neighboring state, they would grow to be great friends.
Moving the timeline up three years, Mr. D had continued to excel at dental school and had become Dr. D while his friends were still one year away from graduation. He had decided to open a de novo practice in his hometown rather than associating with another dentist for a few years as his advisors at school had suggested. With a population of about 50,000 his hometown is a little more than an hour from Capitol City…not quite urban, but no longer rural, either. There were already quite a few dentists established there, and sadly, most were not very forthcoming when Dr. D attempted to make friends and seek advice. The exception wads Dr. A (new character in the story) who had been practicing for only four years himself. (Dr. A has a really interesting story, too, having decided on Dental School after almost 10 years as Capt. A in the Army.) Dr. A was not really happy in the partnership he had established upon graduation. He was earning a reasonable income for himself, wife, and two children, but the office was small and his partner and several staff members were driving him crazy. Dr. A was dreaming of building a new office and practicing alone. Consequently, Dr. A advised Dr. D to avoid Associateships and partnerships and open his practice solo.
Dr. D had opened his de novo practice and it matured into a still small but growing practice by the next year when his two friends from school were considering their options. Incidentally, Dr. A had become a really good friend and mentor during the year. (Let’s recap. Dr. D graduates from Dental School just over two years ago and meets Dr. A who becomes a friend and mentor. Mr. B and Mr. H are set to graduate.)
Mr. B became Dr. B and decided to open his de novo practice in a suburb of Capitol City. Dr. D had introduced Dr. B to Dr. A as a potential mentor. Dr. A’s advice helped confirm Dr. B’s decision to open his own practice. Mr. H became Dr. H and followed the advice to associate for a few years with a dentist in Capitol City. During the past year Dr. A had decided to shed himself of his partnership arrangement and hired a management advisory firm recommended by his dentist brother to assist as he built a new building and strived to pay for it. This had gone well for Dr. A, so he advised Dr. B to engage assistance before opening his de novo practice. Dr. B opened his practice in August of 2000, produced almost $20,000 his first full month, and due to his hard work and appropriate actions he was producing almost $50,000 per month by the end of his first year just a couple of months ago. Dr. H did well in his Associateship, but he was essentially an employee and Dr. B’s experience was very exciting. Dr. B urged Dr. H to take the chance and to follow his dream to open a de novo practice in another suburb of Capitol City. Dr. H decided in August of 2001 to follow this advice, hired the same management advisors, and his new five chair practice will open in late 2001. All indications are that Dr. H will be able to follow Dr. B’s model. Dr. B has already earned enough to repay most of the loan he secured to open his practice just 14 months ago, has made a sizeable dent in his school loans, has moved into a new house, and has become a father for the first time. Life is very good in the Dr. B household. (Let’s recap. Dr. B and Dr. H begin practicing. One is in a successful de novo practice and the other is in a successful, but limiting Associateship.)
Meanwhile, let’s go back to about six months ago with Dr. D and Dr. A an hour west of Capitol City. Dr. D’s de novo practice was almost 18 months old, and it had grown to between $15,000 and $20,000 per month. Unfortunately, growth was beginning to slow and net income was such that Dr’s portion was making him and his family to pinch pennies a little more than they would have liked. By May, he was getting very concerned because things were not getting better, possibly worse. Something had to change. Several of his friends had successfully engaged management assistance, but this was not an easy decision for him because finances were already tight. Incurring additional expense was definitely a gamble. Luckily, things began to improve almost immediately after he took the chance. Obstructions to success were eliminated and the practice began to experience growth again, shaky at first, but growth. In fact, from July through September the growth was $10,000+ per month. The realistic goal for the last quarter of 2001 is $35,000 per month. That will be almost twice the previous monthly average. As an aside, in the same city Dr. A has continued to grow even further and has now built his dream home in the better part of town. As the price tag was creeping toward $750,000 including a lot of cash along the way he became understandably nervous, but his practice is growing to absorb the new costs and calmness will return to the Dr. A household soon. And, what a home it is! In just a few years, Dr. A has built one of the nicest dental offices and one of the nicest homes in town. Both in excellent locations. Dozens of better-connected dentists in town are amazed and somewhat jealous. (Let’s recap. Dr. D languishes but then begins steady growth again as he celebrates his second anniversary in practice. Dr. A’s practice grows toward the $1,000,000 per year range, as he becomes a reluctant expert on brick & mortal, wallpaper swatches, grades of carpet, handmade cabinetry, AND extra costs.)
BE CAREFUL WHOM YOU USE AS AN ADVISOR. There is an ironic twist with Dr. D. He has been working closely with a local accountant since opening his practice. Recently, this accountant advised him that his expenses were climbing too high. In fact, the advice was to resist a full-time third person who is needed to handle the new growth. Since overhead had been monitored closely all along, this seemed an odd piece of advice. The problem is the accountant was averaging production for the first ten months of 2001 rather than the last three months only. If Dr. D were to take this advice, he would not continue to grow. He would be stalled and risk going backward again. Accountants are very good advisors for businesses. My undergraduate degree is in accounting, so obviously, I do not mean to denigrate the value of accountants. If they are performing their traditional role, their advice is based upon actual past performance. How can this not be good? Without doubt, the extremely aggressive businessperson very much needs this restraining advice. It is anathema, however, for most accountants to think outside the box. (There are exceptions. In the Carolinas there is an excellent firm which combines both solid reporting and creative advice.) Remember, most bookkeepers and accountants record history and worry all year long about not being audited. They are not hired to be dreamers. Reaching beyond past performance and into the realm of what appears impossible is not logical. Yet, that is precisely what one must do to reinvigorate a moribund practice.
Two rules are followed by general business executives when dealing with advisors…lawyers are seldom deal makers but usually deal breakers and accountants are essentially historians. Moderate this, however, with the knowledge that all successful business executives consult both frequently. Advice from all directions is important, but the business owner (dentist) must not lose his/her dreams. Very often, the difference between the dental practice that struggles to minimal success and the dental practice that is overwhelmingly successful is not in the hands of the dentist, nor in the mind of the dentist, but in the heart of the dentist. Don’t put unnecessary shackles on yourself and your practice. The wise dentist thinks (and dreams) before acting and then acts decisively.
I am not a Yankee hater. In fact, the Yankees though now going into their 37th World Series could be obnoxiously overbearing, but they could not be more likable as individuals. It is just that I am not from the New York area, and sometimes I would like to see my team hometown team play for the world championship of one of my favorite sports. I think most all of us expected the Yankees to be playing in the World Series before the first pitch was thrown. Overall, dominance by one team will hurt the sport. All that being said, with what has happened this year a fourth World Series for the New York Yankees seems appropriate. That is not to say that it will be easy. Curt Schilling and Randy Johnson could pitch four no hitters the way they have been pitching. Sorry though, Arizona I think the wind is blowing a different direction. Now, Washington is under attack, too, so it would be great for the Redskins to provide something for their fans. Reality must step in here, though.
Have a great weekend,
Hurston Anderson
813 963-7228
PS: I promised myself not to write about current events this week. However, it really is important to watch your practice really closely. There are too many casualties already. There is no reason for negligence and ignoring negative signs to make any more casualties. When times get bad the strong survive and prosper, but the hapless and sloppy fall by the wayside. If you do not know how to do this, email me.
Also, our workbooks really will help with internal organization, and have on five continents. For general subjects and quick thumbnail solutions to everyday issues including hundreds of samples, etc. get the Practice Management Cookbook at $199.95 plus shipping/handling. To organized and record for the entire practice protocols in specific areas consider the Protocol Series with titles on Scheduling, Hygiene, Finance, Personnel Management, and Marketing. Each is available for $179.95 plus s/h. Call 813 963-7228 or fax cc#, exp date to 813 963-5974.
The SMILE, America! Campaign is going great coast to coast. For info, refer to the last Weekly Tidbit or email.
“Smile America!”…Campaign
More than 95% of the distribution of these Weekly Tidbits is within North America primarily the US. The last 5% is spread throughout the world to English-speaking countries and English-speaking dentists in other countries from New Zealand to Iceland. Consequently, I very often write for the US audience. There are high quality dentists all over the globe from Bucharest to Santiago, so I am by no means trying to denigrate the quality of dentistry outside North America. However, for many reasons US patients invest as much as ten times as much in their dental health as in the rest of the world. Primarily, it is due to the good fortunate of having more discretionary financial resources, but for decades American (and Canadian) dentists have crusaded to raise the dental IQ of their patients, too.
Until about five years ago I spent a lot of time in Europe, Asia, Africa, and South America working with bankers. In fact, my doctorate is in International Business. In particular, I spent almost five years just after the collapse of the Iron Curtain traveling frequently to Russia, the Ukraine, Latvia, Lithuania, and Estonia. Those banks were quite active connecting into the worldwide electronic banking networks, and they provided wonderful business opportunities for Russian-speaking American businesspeople. This was at a time when there had been few Americans in these areas. The tourists had not begun to travel there in earnest yet, so quite often I was meeting natives of countries who knew little of Americans other than from movies. Areas where there are many, many American tourists often have discovered other attributes which can be rather irritating, but one thing shared by those who know Americans tourists well and those who know little of Americans is there admiration for the “American Smile”.
As an aside, I want to relate an eye-opening experience I had in Vilnius, Lithuania in the early 1990’s that may be of interest to Americans during this time. I arrived late one evening at the airport for a meeting with bankers in Lithuania and a Finnish business partner the next day. I was utterly exhausted after the flight from Moscow, so after collecting my bags I hailed a cab to the hotel downtown and some much needed rest. Speaking in heavily accented Russian, I told the cabdriver which hotel. It was late, and the streets were pretty deserted, but it was dusk rather that dark because Vilnius is pretty far north and the sun sets very late in the summer. We spoke casually and somewhat painfully due to my poor Russian. It was certainly obvious to him that my accent was from somewhere completely unique to him, so he asked me where. When I told him the United States he immediately stopped the car in the middle of the street and turned around to look at me as if I were an animal in a zoo. Tears welled up in his eyes, and he said that he was 46 years old and I was the first American he had ever seen. He continued to explain that he, his friends, and his family had kept their faith through the hard times of Soviet domination by surreptitiously watching pirated American movies and believing that someday America would help free them. He thanked me for his whole country, and he offered to take me to the hotel at no charge. In retrospect, I should have let him, I guess, but I just couldn’t. It is an experience that I will always treasure, and it is very useful to me now when I hear how a quarter of the world hates America. My guess is that there are cabdrivers in Teheran, Baghdad, and Kabul who would have similar reactions given an opportunity. Although, it appears that cabdrivers, if they exist at all, are rare in Kabul.
Oops, I wandered afield again. Back to my discussion of the “American Smile”. It seems that throughout the entire world, even if we Americans are not always recognized for loudly demanding a Budweiser or Marlboro at a news kiosk on foreign streets while wearing a Hawaiian shirt and Bermuda shorts, we are known for our healthy, straight, white teeth. The “American Smile” is recognizable because we show more of our teeth, and they are uniquely attractive. Once more, I want to point out that this is not meant to imply any superiority, but good financial fortune and a very a effective and active effort by the American dental profession to educate and treat their patients. (I would suggest also that our Canadian cousins get lumped into the “American” category often, and they are generally quite understanding, though it must be annoying.) This infectious smile which we take for granted is almost our “trademark” internationally, and one month after the terrorist attack we need to declare it okay to smile again throughout America.
I wish each and every dentist in America could be convinced to actively campaign to give patients back their “American Smiles”. Who is better qualified to do so? In newsletters, flyers, advertisements in newspapers, special signs in front of the building and inside the reception area, lapel buttons, ball caps, pencils, pens, and anywhere else possible the dentists of America should campaign. Nothing is more infectious than a smile. Nothing lifts the spirits of friends and even complete strangers like a heartfelt smile. Even the sourest sourpuss cannot resist a smile. If we let these blood-thirsty murders steal our smiles from us, they win. Certainly, there was a time to cry, to mourn, and even to reflect, but we now need to urge all Americans to SMILE. Maybe these terrorists have nothing to smile about, but we do. It is our patriotic duty to smile in the face of our enemies, and most Americans are dental patients. If dentists could encourage their patients to smile through this upcoming crisis, it would raise the spirits of the entire country, and maybe even raise consumer confidence. Heightened consumer confidence will pull the country out of the recession faster than any government bailout can.
Here are some ideas. Send a patient newsletter with a “Smile America!” theme explaining how important it is to smile right now. Pass out caps, t-shirts, sweatshirts, pencils, toothbrushes, lapel pins, bumper stickers, etc. to patients and even in malls or door-to-door with a subtext that defines your reasoning, such as “Pass It Along”, “It Helps Defeat Terrorism”, “It’s Good for the Country”, “Support The Fight Against Terrorism.”, etc. . Rent a temporary sign for a month or two and write on it, “Smile America!” with a varying subtext each week. Put up posters in your reception area or at the front desk.
Americans need to feel good again, and they need to feel they are doing something in the face of this war. What better thing could they do than to share a smile with their fellow Americans. In a recent news conference Osama Bin Laden reveled in the knowledge that “Americans are afraid, north to south and east to west”. Let’s use our best weapon to prove he’s wrong, the “American Smile”.
If you want more information on how to organize a “Smile America!” campaign, email or call. We have looked into this and have some more definitive ideas we are developing for our consulting clients that we would be glad to share. I believe this would be great for the country during this crisis, but it could also be a great reason to contact your patients and the general public at a time that dental production seems to be lagging in the 15% to 20% range. Combined with specials on whitening, cosmetics, etc. it could help those practices suffering a downturn to return to earlier levels or increase production. I do not suggest this for that reason, but because dentists are uniquely qualified to encourage smiling. However, contacting patients is always a good business practice.
Have a great day,
Hurston Anderson
813 963-7228
PS: We are still available to help practices by offering free Production Potential Analyses. Our excellent workbooks for internal operational improvement are available, as well as in-office practice management consulting Email or call for info.
Waging War In A Dental Office (Against Terrorism)
Pretty provocative title, huh? Actually, I have been in a lot of dental offices which seem to have the art of waging war down pretty well already. Unfortunately, it is a war between the front and back, or the doctor and hygienists, or the staff and doctor’s spouse, or any combination of these. This battle weary experience will be of absolutely no use for the future, though. We need to completely abandon these battles among ourselves and dedicate ourselves to the practice as our part of our civic duty.
It seems almost like normal when we get up and go into the office every day, but it really isn’t. The United States of America has been attacked directly and brutally, and the attackers have loudly and vociferously stated their intention to escalate. Their stated goal is to see our way of life including democracy, freedom of religion, sexual and racial equality, and peaceful coexistence destroyed, or they will continue to attack. They are isolated extremists who will accept no compromise. In their minds they are more moral, braver, more dedicated, smarter, and more worthy than we. Negotiations are pointless with extremists. They simply use them to buy time. Their entire message and the enthusiasm it generates depend on never compromising. Since they do not have the advantage of a huge war arsenal they will attack us psychologically through ever larger attacks on our civilian population. 6,000 massacred on September 11th is merely the first foray. Are we really as weak as they believe?
I know this is not a newsletter for current affairs, but this crisis is not just a “current event”. It will be part of all our everyday lives for years to come…entangled with our daily activities, and as business owners we have a unique responsibility to our staffs, our employees, our patients, our families, and our country. Everyone is a little nervous, and 2 out of 3 Americans are still dealing with depression. In addition, this crisis is not just in the US. It is in most of the 18 countries to which these Weekly Tidbits are sent.
The estimate is that there are 50,000 terrorists who have been trained by Bin Laden’s organization, Al Qaida. Besides Al Qaida’s terrorist camps in Afghanistan, there are training camps in Pakistan, Iran, Iraq, Syria, Lebanon, Palestine, Libya, Chechnya, Tajikistan, and probably elsewhere sponsored by the Islamic Jihad, Hezbollah, Hamas, and others we do not know. At this time (October 5, 2001) there are thousands of strikes being planned throughout the world against the West by three types of planners. Strikes are planned by state intelligence services like Iraq’s and Iran’s, they are planned by multi-national terrorists like Al Qaida, and they are concocted by independent entrepreneurial types looking for sponsorship and financing anywhere available. In an open society like ours we are unbelievably vulnerable. In fact, it is impossible to stop them from acting, if they are willing to die and to commit acts that have generally been considered unthinkable by civilized humanity previously. We can only choke off their money and support, and try to keep them constantly on the defensive. This will take unimaginable patience and determination.
Yet, as vulnerable as we are we have the upper hand in many ways. For instance, the terrorists need some support among their fellow extremists. So far, they have been able to strengthen their position with their “David versus Goliath” strikes. Even murdering 6,000 innocent civilians seems to fall within the acceptable range of anger that exists, but they must be careful about really disgusting acts like mass genocide from nuclear, chemical, or biological devices. It is hard even for the most ardent hard-hearted follower to justify the carnage that would be caused by these acts. The perpetrators are counting on our actions to incite additional rage among those who are less phlegmatic. Thereby, justifying their escalation with the ultimate goal of gaining the control of all Muslim nations, and the oil and military might. We probably can’t defend ourselves properly without some acts on our part which when interpreted through the filter of extremism will appear provocative. If we are fortunate, we can get some voices of moderation in the region to speak with a calming message. At this time they seem to have been “shouted down”, but they still wield a great deal of influence.
Although it is too soon for most to realize it, this is a whole new world, and it has a direct effect on our lives, our employees, our families, our patients, and our businesses. It has been said that this crisis has given the Baby Boom generation and subsequent generations an excuse to finally grow up. Those who have attained potentially high income positions like dentists now must prove why they are worth their income. There are leadership requirements involved that transcend the technical skills taught and practiced. A dental practice owner is a businessperson who has a unique opportunity in a free society, but who also has a unique responsibility to that society. We have pretty much had a free ride for years. Now, it appears that the bill is coming due.
It has become the fashion to find evil in the actions of big business CEO’s, but this crisis has pointed out that at the risk of their jobs and livelihoods many have made decisions for the collective good. With the extreme view of capitalism that is seen from Communism or the proponents of these extreme Theocracies this could not happen. For instance, on the morning of September 11th my wife was on an airplane on the runway in Atlanta ready to leave for Houston. All planes were grounded, and she had no way to get either home to Tampa or on to Houston. After trying Avis where we have our corporate account only to discover no cars and a drop-off fee of $800 for any car not returned in Atlanta she wandered down the aisle to get in line at Hertz. On her cell phone she told me that she could only get a car if she had a confirmation #. I got on the internet quickly and got her a reservation just as she was walking to the counter. So, she was fortunate and drove the 7+ hours home. When I returned the car the next day. Hertz charged only the $89 for one day’s rental. They had decided to help out and not charge the normal drop-off fee for a different city. Right now, I understand that they and the other auto rental firms have cars out of place all over America, and it will cost millions to get them back where they belong. Also, even with auto sales in question, several of the automakers are choosing to keep employees working even at a loss. These are just two of thousands of acts of sacrifices. The CEO’s of these companies are judged by their stock prices and profitability. Many will be vulnerable, and some will be fired over poor results next year. Yet, they stood up to be counted when it mattered.
We must do the same thing in our offices. The first objective is to stay financially viable. I discussed that last week, and I reiterate the importance. If our businesses fail, we will contribute to the unemployment and the burden on all other citizens. Should the recession cut into production, we must become proactive and take steps to reverse the trend. Certainly, incompetent, unproductive, and/or petulant employees must be dealt with appropriately, but if we are overstaffed due to the financial downturn we must try to keep our entire staff employed and struggle to grow back acceptable overhead limits. I know many of you wrote that you have not seen the downturn yet, but many more wrote that the 15% to 20% statistic was about right. Again, it is not necessary that there be any negative effect at all, but there will be unless decisive action is taken. Monitor the practice vital signs weekly. Communicate with your patients more frequently. Become proactive at filling hygiene and doctor’s schedules. No more waiting for the phone to ring and filling blanks in the schedule. Meet with the entire staff and discuss how the practice is going to change for the new situation. Fulfill your leadership role by taking positive action that will strengthen your practice. It is the time to grow up a little bit for all of us especially those of us in leadership positions. 6,000 have already been murdered, and many more will be giving their lives in combat to give us the opportunity to buy homes, cheer at ball games, cuddle our children, and conduct business. It is our patriotic duty to do the best we possibly can with these hard-earned opportunities. Otherwise, we are dishonoring their sacrifices and memories.
Warren Buffet who is the 2nd wealthiest person on the planet earned this enormous wealth by knowing what is going to happen in our economy and to specific stocks. He predicts a deeper recession than has been suggested by most others. He suggests it will possibly last throughout most of next year with negative growth three to four times greater than is being predicted by more optimistic prognosticators. Still, it will pass, and we do not have to be victims. We have everything necessary to prosper (or can get it), if we have the determination. Business as usual will not work.
Rickey Henderson broke Ty Cobb’s record for runs scored yesterday, and apparently he never was known to slide into second with his spikes crotch high, either. Surely, Barry Bonds will hit at least one more homerun in the next three games to break McGwire ‘s single season record of 70. With all this though, I think the greatest baseball “player” of all is whoever is responsible for player personnel for Seattle. They have lost more great players, Hall of Famers, than most teams will ever have such as Randy Johnson, Ken Griffey, Jr., and Alex Rodriguez. They should be stumbling, but they have already won 113 games this year with 4 left to play. That is almost ten games better than any other team in baseball. They should just get a bye all the way to the World Series, except Oakland has been even better in the last part of the year, I think, and Seattle has a great deal of trouble beating the Yankees in the post season. For all us baseball fans this is going to be fantastic.
Have a great week,
Hurston Anderson
813 963-7228
PS: One way to become proactive in your practice is to get additional management information. Our Practice Management Cookbook (@ 199.95 plus s/h) is the most widely distributed practice management reference book in dentistry today, and is being used daily on six continents. Our Protocol Series includes individual workbooks to organize the five major functions in a dental practice (Hygiene, Scheduling, Finance, Personnel, and Marketing). Each is available for 179.95 plus s/h. Fax cc#, exp date, and address to 813-963.5974. Also, we have nationwide in-practice management consulting available. Email or call with questions.
