No matter if you plan to keep or sell, focus
on these key areas to increase the value
of your practice and encourage growth
PART 1 OF A 2-PART SERIES
by Jay Geier
Whether you want to prepare your orthodontic practice for sale or grow it for your own benefit, the strategies are the same. To get top dollar for your life’s work, you need to prove that your practice is of significant value to the buyer. You’ll need to produce at least several years of financial reports and other documents that show:
- The business is still growing with new patients, and positioned to continue doing so.
- The business is making a strong net profit, and positioned to continue doing so.
- You have a well-trained, efficient, high-performing team committed to delivering a great patient experience, who are engaged in their work and proud of all that the practice stands for.
- You have kept up with all appropriate capital investments over the years, including ones that make for a great first impression and allow for growth.
- You have a good reputation in the community.
If you were in the market to expand your business by buying another, isn’t that exactly what you’d be looking
for in an existing practice? And doesn’t that sound exactly like a business that is thriving and growing, even if it weren’t going up for sale?
The strategies that will get your business to this desirable and valuable point—whether or not your objective is to sell—can be grouped into five key areas: human capital, marketing, space and equipment, clinical
duplication and financial discipline. These areas require
your attention, energy, investment and, ultimately,
your mastery. They work together in synergy, so while
some areas warrant more or less focus at certain times,
you must build out all five over time. Aligning your
thinking, planning and investing to these strategies
will drive income and practice growth because they
will keep you focused on the most important aspects
of the business.
In this article, the first of a two-part series, we’ll
explore human capital and marketing—the two areas
easiest to address, and that have virtually immediate
return on investment.
01: Human Capital
The area of human capital goes way beyond the
typical HR functions of recruiting, hiring/firing
and compensation. It covers every aspect that makes
your entire team—you included!—the most valuable
asset of your business and the most defining factor in
whether your practice thrives and grows. Things like
accountability, engagement, training and development,
culture and incentives. Efficient operational systems
and processes also fall here because they depend
upon your people to execute them effectively and
The investments you make in human capital each
year provide outstanding ROI that is virtually immediate.
In addition, the return you get on the investments you
make in the other four areas depend largely upon the
caliber of your human capital to achieve desired results.
Whether you want to grow your practice for yourself
or position it for a lucrative sale, these are examples of
essential human capital strategies:
- Hire great people and eliminate those who are
holding back the team and the practice from
being as high-performing as they could and
- Invest in team training so you and your people
know what an excellent patient experience looks
and feels like and how to deliver it. This includes
a potential new patient’s all-important first
interaction over the phone.
- Create a patient-centric culture of appreciation
and recognition based on a compelling vision
for the practice, core values, results focus and
generosity in the community.
- Model desired behaviors; lead, motivate and
mentor your team to keep patients top of mind.
- Invest in leadership team development so you
have people equipped to oversee daily practice
functions, freeing you up for your overall
leadership role, and long-term business planning.
Don’t kid yourself: If your human capital is not
what it should be, prospective buyers will be able to
tell. Even if they never meet the team, the evidence will
be everywhere. Knowing how important all the people
aspects are, a savvy buyer may walk away altogether,
knowing how many other aspects of the practice have
been adversely affected. Or they will reduce their offer
considerably, knowing how much attention, energy and
investment will be required to fix what you allowed to
go wrong over the years. They will see and feel:
- Disorganization and inefficiency of office
processes; lack of teamwork.
- Non-engagement of team members robotically
going about their tasks.
- Lack of genuine care and concern when dealing
- Indifference to results and personal performance,
knowing they receive the same paycheck
- Angst over an impending sale of the practice
because they know the new owner will likely
raise expectations; many will jump ship because
they have no commitment to the patients, the
practice or its role in the community.
- The ultimate telltale sign of underperforming
human capital: Virtually none of your results will
be what they should be.
If there were such a thing as a single silver bullet
to running a great practice (which there isn’t), having
sterling human capital is as close as you can get!
Of course, the area of marketing includes everything
to do with marketing and advertising, but it’s also broader
than that. You should be communicating not just about
your services but also about all that you do and stand
for in the community. Your reputation has a lot to do
with whether existing patients are proud to refer you
and potential patients are attracted to your practice.
Too many doctors neglect—or ignore—marketing
because they think that if they’re outstanding clinicians,
the practice will continually grow through patient
referrals. That is rarely ever the case long-term. No matter
how many referrals you get from existing patients, you
should always be investing in marketing to attract new
patients. A steady stream of new patients is the lifeblood
of any practice; it replaces ongoing attrition and creates
the net gain that generates year-over-year growth.
In addition to the financials that reflect the past,
a smart prospective buyer will look at your history of
new patients to determine if you’re still on a growth
path or if you’ve plateaued. If the latter is the case,
that could be a sign that your reputation in the
community isn’t a very good one—or, due to lack of
marketing, you’re woefully unknown. New owners
will likely have their own ideas about marketing, but it
will be much easier for them to build on momentum,
rather than having to start from scratch. If you’ve
ignored this key business strategy, it will be reflected
in a lower offer.
The good news is, marketing does not need to
be nearly as complicated or as costly as you might
think—but it does need to be done consistently. It’s
also a function that can be easily delegated to a creative
team member who has some marketing savvy, or you can
outsource it altogether. Whether your campaigns are in
print or digital, via mail, email or social media, proven
fundamentals of marketing will keep you growing and
position you for the most profitable sale:
Identify your desired target audience: families,
mothers of young children, teens looking
forward to prom, brides preparing for weddings,
and so on. Design messages that will resonate
with those potential patients—not other dental
professionals—and motivate them to improve
their oral health or beautify their smiles.
Test and tweak your campaigns, knowing
that marketing is a trial-and-error process
through which you learn what works well for
your individual practice. Instead of getting
discouraged by those that don’t perform well,
adjust your strategy based on learnings. And
before sending out, make certain every word is
correct, links work, the site says what you want it
to, the phone number is correct and that calls
will be handled effectively.
Track how much you spend on a piece or
campaign, and how many new patients you get to
determine ROI for that specific marketing effort.
Have team members who answer the phones ask
callers how they heard about the practice, so you
can tie those new patients to a specific campaign.
- Scale campaigns that get consistently good
ROI by distributing to larger audiences. Rerun successful campaigns at the same time each year,
such as reminding people to use their benefits
by year-end. These are especially profitable
marketing strategies because you’re not having
to invest in new creative development.
- Capture potential new patients who respond to
a campaign by having a team that’s well-trained
on how to convert calls into booked
appointments. When not done efficiently and
effectively, your investment won’t achieve the
ROI it should (as measured only in new patients),
no matter how many additional phone calls,
website visits and walk-ins are generated. In
short, you will have wasted marketing dollars
on what could and should have been a very
It’s no accident that human capital and marketing
have been addressed in the same article because of the
strong linkage between them. Money spent to generate
more phone calls and website visits is wasted if your
team isn’t trained to convert new-patient calls into
actual new-patient appointments. Moreover, if they
aren’t trained to deliver a great experience when new
patients do come in for the first time, you may never
see them again. And without that steady stream of new
patients, your practice can’t grow … and a prospective
buyer will adjust their offer down (if they make an offer
at all), knowing they’re facing a turnaround situation
of a stagnated business.
Whether you’re going for maximum income and
profitability for yourself or maximum sale price, start
putting your attention, energy and investment into these
two key areas. You’ll be amazed at the immediate and
positive return you’ll get!