5 to Grow On by Jay Geier

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 consistently.

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 should be.
• 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 with patients.
• Indifference to results and personal performance, knowing they receive the same paycheck regardless.
• 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!

02: Marketing

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 profitable campaign.

Strong ties, strong results

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!