11 years ago, I spent everything I had buying into a partnership in a dental practice in Nottingham.
The practice became Campbell and Peace and my journey into dental business began.
I spent thousands of pounds incorporating the business and setting up the articles. Thousands more creating a brand and a website.
This all seemed very exciting but in the end it’s sunk costs which are basically essential but which yield no value in the end.
The most important thing I was able to do at that stage was to navigate what was one of the worst recessions in history (the credit crunch) by redesigning the business model of the practice.
At the time I didn’t realise I was doing that but looking back it was the most important and most successful action that was made around that time.
Dental practices effectively work in four different ways:
Consultancy services sell time not products, time is the product but in truth many dental practices unwittingly and by accident incorporate all four of these models in the one place.
The problem we find ourselves in late 2020 is that some of the aspects of these business models are unlikely to work for a lot longer due to the circumstances in which we find ourselves in.
Model 1 (which is membership) produces a level of income which is enough to sustain some of the fixed costs of the business and provides a regular income but the profit in the business is mostly made up by the running time of the dental drill.
The NHS government contract system is absolutely dependent at the present time upon the running of the dental drill (you’re unlikely to make your contract value from 1 UDA).
This leaves the middle two to give you the opportunity to redesign a business model; to sustain the future of your business.
Fee per item is a malleable system which allows you to decide what the items are that the patients is paying for, not many patients in dental practice pay for photography but lots of people pay for photography at a photographer.
Tons and tons of dental practices massively undercharge for the provision of things like small X-Rays or OPG’s despite the fact that the dentist has to use a lot of their own intellectual property to analyse and asses these images which they’ve devalued to the point of almost zero.
Consultations are another area which has been utterly devalued over the past ten years as dentistry threw away any value it had on independent knowledge.
The redesign of your fee per item structure and model can completely redesign your business.
The final aspect though is consultancy which ties in with the fee per item model.
In some instances, and for long treatment plans where discussions with patients and the provision of advice will take a lot of your time; this should really be considered as a consultancy model.
Nobody objects paying a therapist or a lawyer for the time it takes to talk to them, why should that be different for a dentist?
Many things will change in many aspects of business after the pandemic has finally washed away (and it will be), many of the changes that we had to make will stick and in particular the way patients communicate with practices or book appointments or complete paperwork.
I believe that reconsideration of business models will be critical in a world where NHS dentistry will not treat the middle class and will provide more and more basic care for those that it looks after while at the other end of the spectrum; the influx of extraordinary technology and techniques will cost evermore to implement.
This week we launched our Digital Dental Business Course which I’m delighted to say is full on it’s first addition but it shows the alternate models that will exist in the communication system as we blend human contact with other methods of information exchange.
Next year in February we launch the 5th edition of our Year Long Business Course. This is quite an extraordinary 12-day year long course for practice owners and practice managers to allow them to take the space to redesign their business for an uncertain future.
In 2009 I redesigned the business model and by 2015 we had increased our turnover tenfold.
I’m not suggesting that the business course next year will do exactly that for your business but if you’re looking for a change and a different way of running things like a proper business; you should perhaps have a look and have a chat with us.
Blog Post Number - 2514