I recently had a veteran dentist ask me if a practice owner was an entrepreneur. The answer is yes. Having specialized in serving entrepreneurs for 30 years, and currently being one myself, here’s my definition: An entrepreneur is a person with the vision, technical skills, and burning desire to build, own and operate an independent business—but who often lacks the business experience and time to reduce risk and ensure sustainability.
The Entrepreneurial Conundrum
In my experience, there’s nothing like working to build your own company. Every practitioner I talk to has vision and expects hard work ahead, but most of them fail to realize that they face the same business issues and decisions as large, established companies. There may be fewer zeros in the numbers, but the items that must be addressed, mastered and put into practice are identical. It’s vital to get them all right immediately, with a minimum of mistakes, in order to minimize risk and not waste precious capital, time, growth and opportunity.
A practice owner needs to be a rock-star technician with incredible speed and efficiency, a master psychologist, a supreme salesman, and a charming and delightful motivator and adviser.
That’s a tall order. As though that weren’t enough, you also need to concurrently implement all of the following business aspects of a practice’s strategic and operational plan.
- Service mix
- Insurance reimbursement
- Expense control/overhead
- Personal CE and staff training
- Website creation and SEO
- Patient communications
- Cash-flow management
- Tax planning
- Debt management
- Financial systems
- Internal controls/procedures
- Patient management systems
- Government regulations
- Physical office issues
- Location strategy
- Strategic planning
This is insane. How does a dental entrepreneur master all this … especially with little to no business training. Before we discuss that … wait for it …it gets worse!
Many Excellent Cooks in the Kitchen
Practice owners surround themselves with a team of suppliers and advisers. It becomes a big team very quickly. That’s a lot of relationships to manage. How do you do so while handling all of the clinical work, managing the staff, raising a family and having a life? Hence, the entrepreneurial conundrum. Here are some of the partners a dental practice will need:
A Three-Step Solution (in any order)
For every existing and proposed practice—to ensure you are on track, to get back on track or get started on track—here is my solution.
Find a chief financial officer (CFO).
Most dentists I work with do not think it is necessary to invest in the strategic help that they should. This is a costly mistake with long-term repercussions.
The smartest thing a dental entrepreneur can do is to find one person to be your main adviser—someone with an all-encompassing business, industry, strategic, tax and finance background, including experience as a CFO or CEO, who integrates your financial planning goals and lifestyle choices for you, your practice and your family.
The key is to find someone with no agenda—someone who only wants to provide independent, objective advice. With the possible exception of your CPA, your CFO should not be anyone on the chart below. With deepest respect to everyone listed and their fine work, they are not truly independent—their success ultimately depends on convincing you to buy their product or service.
This service does not have to be expensive—maybe only a few hours per month. A good CFO will bring a tremendous return on investment, both tangibly and intangibly. The CFO can advise you on the major strategic, location, operational, tax, HR, accounting, contractual, risk-management and cash-flow aspects and allow you, the entrepreneur, to focus on executing the core practice functions with the peace of mind that allows the creation of a balance within work and family.
Evaluate Your Practice, Family Status and Goals.
Get away for a short time and think. Be honest. Be real. How are you doing with your practice goals? Are you ahead and thriving, or struggling and frustrated? Are you growing or stagnant? Are you bored or invigorated? Do you want to add practices or offices? Where do you want to be in five, 10 or 25 years? What are your family lifestyle and goals?
Ensure your practice is in the right location.
Here’s an indisputable truth: Your location is the No. 1 factor that determines your practice success. There is nothing else that’s even close. If your location is wrong, you are not maximizing your financial and time investment.
You may not think this applies to you. That would be a mistake. Even if you are successful or feel locked into a building or have a bad lease, you should not ignore this step.
For many practices, due to the economy and other factors, demographics and competition have significantly changed during recent years while you’ve been busy serving your patients. Regardless of where you are in your practice life, you should immediately determine if the competition, demographics and overall market aspects of your location, based on a detailed location-strategy assessment, realistically support your growth goals and ensure that your current building makes it possible to accomplish them.
For every practice, I believe that these steps and considerations will help ensure the optimal chance for success and help avoid a great deal of stress, and wasted time and money. A good situation can be made better. A bad situation can be fixed. I hope this helps you, the entrepreneur, exceed all of your goals and not fall victim to the conundrum. I wish all the best to you and your staff and family.
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About the Author:
David James is a CPA, entrepreneur, and the president of Locate™, which provides location-strategy technology, reports and consulting services to dentists and the dental industry. He is also the founder of Fern Hill CPA and Fortify CFO. James has 30 years of experience providing CPA, CFO, consulting and tax services to companies and individuals. He can be reached at email@example.com or (740) 527-3898. Visit locatestrategy.com, Dentaltown.com/townieperks or fernhillcpa.com for more information.
Originally published for DentalTown, 2015. Click here to read the original article.