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It's here; can you feel it?

It's been a while since I've had this, since I've had this tingling in my fingers, as my anonymous friend and business advisor tells me is common for people who occupy positions in organisations like the one I'm privileged to hold.

We all thought the boom would last forever, but we were wrong.

I have this extraordinary, privileged life where I can speak to people (either patients or partners or friends) who are at the sharp end of things economically.

I also go through life having phases where I try to learn about specific subjects, sometimes history, sometimes philosophy, sometimes things scientific, but of late; it has been things economic.

In the past, I've never paid any notice to geopolitics or large-scale economics, but now I can see the things that affect me, my team, and my family directly based on economic standards.

And so, this is where I'm going to say that things are about to slow down and probably quite dramatically for a lot of us in the current situation that we find ourselves in.

It was never going to last forever; this boom and the ideal circumstances that occurred after the 8th of June 2020, when there were three months of pent-up income, people were living at home, and they had nothing else to do and no holidays to go on and no loans to take out.

And so, off they went and spent their money on many things that they hadn't spent it on before, and some of that was dentistry.

In those circumstances, money was free-flowing, people could borrow on credit to buy their dentistry, and they could borrow on credit to buy anything else.

Companies were saving money because people weren't there, wages were able to increase, and disposable income was able to rise.

But then things changed for various reasons, not least the war in Ukraine and the problem with the supply of energy and many other factors that led to this catastrophic rise in inflation that we've seen over the past 12 months.

And so, the government uses its levers (all organisations have levers if they choose to use them). Still, the government really in the United Kingdom has only one real clumsy lever to try and slow down this rise in prices and rise in inflation, and that is the rise in interest rates.

Twelve times now, we've had a rise in interest rates, and we find ourselves at 4.5%, and that's the highest rate since 2008 (2008 is when I first stepped out of the practices that were bought by the corporate to go on my own in dentistry).

We're not finished there either; it will get to at least 5% or higher, but the funny thing is that it only seems to affect the people at the lower end of the chain (at the moment), but that will change as people drip out of their fixed-rate mortgages. They start to increase their practice loans, and they realise that their patients can't get credit to buy their clear aligners.

In this privileged position where I live, I talk to people about their levers and which levers they're starting to pull at the moment.

When you get through the barriers of everyone who wants to tell you that they're always doing well all the time, it's clear that dentistry is starting to slow.

For private practitioners in smaller practices, all they will notice at the moment is that their waiting lists are reducing, and they will celebrate and think 'thank goodness' because that will take the pressure off.

The next thing that will happen is their hygienists and their associates will start to get gaps, and then they will start to complain that the principal's book remains full.

The principal's book is always the last one to go. They're the one with the reputation, the founder and the talisman for the organisation, but it's ok, isn't it? Because you will be able to pull your levers.

The economy will ebb and flow, but proper businesses mend the roof while the sun is shining and fill the storage barns as full as they can in the good harvest.

Good businesses do that for exactly times like this.

This is not a time to cut back.

This is a time to push forwards.

This is not a time to stop marketing.

This is a time to start marketing.

This is not a time to invest in your team.

This is a time to overinvest in your team.

This is what good businesses do.
This is what people who have been involved in the business cycle for many years understand.

All that money you made through the last three years was not so you could put tyres on your Porsche; it was so you could put it in the bank so you could bring it back out now and secure your business while other people couldn't because they didn't store it up.

Learning to use the levers in your business when economic circumstances change is one of the fundamental tools of business that people learn at higher levels.

It's definitely, though, one of the fundamental tools that dental businesses are going to have to learn going forwards because the money we used to guarantee from the National Health Service to prop us up in terms of economic disaster will not be there. 

Blog Post Number - 3446