Cliff's Notes

The Business of Dentistry

Survival of the Fittest … Your Patient Base may be a Time Bomb!

thjqzm52xuYour Patient base is your future. Did you ever really study your “revenue base”? What is the average revenue value of each patient? Looking back at the all the practice valuations that I have done I have seen a range from $650.00/year to $1850.00. Both of those extremes were practices that grossed similar amounts ($1.2M) so why is the higher value more dangerous? The higher value base was one half the size with less than 900 active patients and that leaves the organization more vulnerable to outside economics and changes in the healthcare market.


Average Patient Value is the average dollar amount that a patient spends annually on dentistry. That should take into account the cost of 2 hygiene appointments and $300.00 in additional work. It doesn’t mater if the patients are private or insurance because your net receipts are used in the calculation. Remember, this is only an average, some patient may need $3000.00 and some just hygiene. The value is easy to find, take the number of active patients (24 months) and divide it into 12 months of receipts. The biggest problem here is that most dental professionals do not know how many active patients they have.

Patient Demographics is extremely important when managing the growth of a patient base. The average small practice (1-2 doctors) usually has a patient base within 10 years (+ or -) of the doctor. A dentist that is 50 years old will have an average patient base of 40-60. There are always exceptions but this average will hold true 80% of the time. This is a time bomb. As the base gets older it will shrink in size. A strong healthy practice has 1200 active patients per dentist. You want to engage 20-25 new patients per month to off set lost patients and the front end of your demographic model that will be needing less dentistry as they age.

Where is the Pain & Where is the Joy that your patients are experiencing in their lives? An endodontist told me a great story about what happened in his office. He practices Spa Dentistry and pays attention the “patient experience”. He completed a procedure on a 45 year old woman that was referred to him. When it came time to release the patient, she said “do I really have to go”? When the doc laughed she said it was so quiet and relaxing and now “I have to get home, make dinner and get the kids onto their homework”. You need to relate to your patients world and understand their personal concerns. That’s dentistry beyond the mouth. Be who your patients want you to be.

Healthcare Today has become a business. The dental practice that defines the “patient experience” as a priority will be rewarded with the greatest gift, a patient referral. Pay attention to growing the base with families, you need to continuously replenish the back end of your of your patient demographic. Please feel free to contact me at any time with any questions or concerns.

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October 16, 2016 Posted by | Uncategorized | Leave a comment

Survival of the Fittest, The Future of Dentistry, Part II


My last rant about the “Survival of the Fittest” was surprisingly well received . I am not a professional writer, I write like I speak, but I guess the subject on the blog post hit a nerve. The responses and forwards along with transmission contact reports confirm the smaller market’s concern over the rapid advances in technology and their ability to afford it. That is a concern, but no different than any small market (50 or less employees) business in today’s economy. You need to be prepared because the time may come that you may need to decide if you want to be an employer or employee. If ownership/equity is your plan just understand, it’s not easy. But it can be exciting.

You have to like what you do. Most of the dental professionals I deal with love cosmetic and reconstructive dentistry, it’s an art that most people can’t do. They love sitting chairside and working with patients with assorted personalities. But those same great clinicians hate the management end of the business. All the requirements of running a healthcare based business can be overwhelming and quiet often the person sitting on the top of the mountain gets burned out and goes into autopilot. Autopilot can be addicting and dangerous.

Quality Management is the key to a successful organization. Leadership creates the quality. Here lies the problem for the average dentist. A dentist is a doctor, a specialist in oral health just like a cardiologist is a specialist in the functions of the heart. However, doctors are scientists and in most cases not managers but they can be leaders. A leader requires passion and passion is contagious when presented correctly. The development of a quality and well compensated team is the foundation needed to succeed in the future. Putting together a quality team can be difficult and hiring a recruiter or management consultant is not a bad idea. There are several that I think are excellent and I would be happy to share their contact information.

Quality Financial Consultants are essential for any successful business. In a dental practice the owner/decision maker is also the primary revenue generator and they need trusted advise. I always recommend advisors that specialize in the dental/healthcare world mainly because the daily operation of the business is unique. Most financial advisors are CPA’s but not all CPA’s are financial advisors. A good advisor will insist on consulting with you on a quarterly basis and provide tax planning solution within weeks of the end of your Q3. If your advisor is just doing your taxes according to what you give them, its time to start looking for a new “advisor”.

Technology & Diagnostics are requirements to succeed in today’s market. Top quality management and 3rd party consultation are investments in your practice. You need to engage in the digital revolution and “focus on what can go right”. Now is the time to get started. Please feel free to contact me with any questions or concerns.

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September 14, 2016 Posted by | Uncategorized | Leave a comment

Survival of the Fittest! The Future of Dentistry


Charles Darwin studied evolution and change. I believe he was correct in stating that adaptation to change is the key to survival so it puzzles me when I see people resist it. We all need to embrace the changes in providing healthcare because the advances in technology are speeding up the evolution.

Dentistry (Oral Health) has always been the step-child of medicine and the dentist was never considered a “real doctor” well, that has changed. The advancements in technology has opened the door to a new world of diagnostic capabilities. Dentistry can now detect many systemic conditions before the patient exhibits symptoms. Now think about that from the Insurance company’s view. They are fully aware that early detection and treatment is financially beneficial to them. Early detection leads to cures and that means less professional intervention. Yes, outside of your office it is all about the money.

As we move into 2017, insurance will have a greater impact on our society. No matter which direction politics take us the landscape will continue to evolve at a faster and faster pace. So, how do we survive in this new environment? We embrace the change.

Where will your dental practice be in 3 years? How about 5? I can tell you that if you are still around in 10 years your practice will be nothing you would recognize today. In the next year the 3D printers will be functional in the dental office. Your going to scan your clinical preparations and if you use an outside lab, be able to pint out a temporary crown or appliance the minute you finish the prep. Your diagnostics will all be 3D and you will be looking deeper into the human anatomy than ever before. Radiation will be a thing of the past once the software is available to incorporate ultrasound. And then there are the specialist. The private dental office will have less places to refer to because the specialists will be working in general practices. To survive as the market shifts all clinical procedures will need to be kept in-house.

In 2020 Electronic Health Records (EHR) will be required by all dental professionals. That requires updating software and a plan to integrate digital components and solutions. Saying you have digital radiography is not enough but it is a start. The standard dental practice will need to utilize new technologies to accommodate new diagnostic codes being made available by the ADA and AMA. Also, If you have not started moving towards the “paperless environment” you are working behind the curve. The State of New York already requires E-Scribe and it won’t be long before the other 49 states follow. The train has left the station and it is time to start running and jump on-board.

Now lets talk about the value and “curb appeal” of a practice that is preparing for transition. Young professionals looking to establish their own practice will be more attracted to an organization that is well entrenched in the digital revolution. Today’s graduates do not know how to develop x-ray film and in the very near future they won’t be taught how to use impression materials. They learn the advanced digital formats and when entering residency programs their skills will be honed with digital imaging and diagnostics. The age of dental chairs, lights, compressor, etc. are not the value, as most sellers think. The value is in the ability to practice 21st century dentistry the way new dental professionals are taught and the amount of funds needed for additional investments required to grow a business in the fast paced healthcare revolution.

Please feel free to contact me with any questions or concerns and your comments are always welcome.

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September 5, 2016 Posted by | Uncategorized | Leave a comment

Do You Know Your Silent Partner?


Yes you have one, maybe several. Any outbound asset that is not directly monitored by daily operations and not subject to checks and balances (digitally) can be a “leak in the ship” and a silent partner.

When a small business like a dental office hears the term “silent partner” they think about embezzlement. Embezzlement does becomes possible without checks and balances but we will leave that discussion for another time. It’s time to look at inventory, work flow, and the all to elusive cash flow.

The Inventory: Inventory time management is one of the most difficult tasks a business has. It is not revenue generating but is an absolute necessity for any on going business. However, you need to take this necessary chore and make it have a positive impact on the overall operation. When you get right down to basics all businesses do the same thing, they buy and sell goods and services.

A very wise man once told me “don’t fall in love with your inventory”. I see clients attend year end trade shows to get great deals on a full year supply of certain products. How wrong is that? By putting large quantities on the shelf you are tying up cash, and cash is why you go to work. If you work with a quality vendor (there’s that word “quality” again) you would already have the price and get next day delivery so buy what you need when you need it. If you buy a quantity of product that last more than 90 days the additional savings need to be a minimum of 10%. Ask your accountant about inventory carrying costs. Automated inventory control is simple and is provided at no cost by quality vendors. Many of my clients use the Aruba Inventory Management System. Good software simplifies the process and the “usage” reports will help you make an informed decision when a “bulk buy” opportunity arises.

The Work Flow: How smooth does production move through your organization? Are you constantly looking over peoples shoulders to make sure they are doing things correctly? As the healthcare world continues to evolve the work flow of any business needs to streamline and automate. This requires change and investment. Utilizing technology and automating systems turns operational time into productive time. As an example, how long does it take your office manager to prepare the morning huddle? Some practice management software (i.e. Dentrex G6) do it automatically saving 15 minutes of business office time. Do that in 4 areas and that is 1 hour. What is the true cost of an employee? Investing a little money in work flow technology can have a huge ROI. Dental offices can now have their large equipment (i.e. compressor, vacuum, X-ray) monitored by software with notification of required maintenance. Hey, your car does it…

The Cash Flow: This is what it is all about. Another term I like to use is “disposable income” because that is what will result with a well organized operation. Cash Flow is the blood of any business. The better the cash flow the healthier the practice. Properly implemented procedure and protocol is essential for the survival of any modern healthcare facility. Please feel free to contact me with any questions or concerns.


August 17, 2016 Posted by | Uncategorized | Leave a comment

If You Want People to Help You Make Money, You Have to Let Them Make Money!

negotiate Like many Americans I find myself ordering things on-line and looking for good deals. Amazon continues to amaze me with the quality of there distribution and how they handle returns and complaints. However, they are not always the lowest price. Amazon chose a business model of quality and service and is constantly attempting to improve on their “customer experience”. On the other side of the equation are the big box stores such as Costco, BJ”s, Sam’s Club, etc. that chose quality and price. The low “PRICE” is what determines the level of service.

Ask yourself what your dental practice focuses on. Quality is not the question, its all about the service and the price. The lower your price the less service you can afford to offer or the harder and longer you work. Also, a low price decreases the value of your service. However, on the other hand , if you price your services according to your quality standard of care, your patient base will recognize your value. Most people look for value in the services they buy.

Your clinical skill is your quality and the “patient experience” is your service. I have several clients that are afraid of raising their fees for the fear of loosing patients. Well that may be true of a small percentage but are they the type of patients you want? They are looking at price. By increasing your services and enhancing the patient’s experience, you can increase your fees at a slow rate. Quality patients will recognize your value.

Now for the “making money”…. Quality & Service, when working together, overcome price. However, to make it work you need to share in the cash flow. What that means is providing a reason for team members, vendors, consultants, etc. to provide you with the highest quality of service so that you can maintain the quality of your management and clinical production.

The Team … One of the hardest situations for a manager is how to evaluate a long time employee for a raise. Employees can price themselves out of the market so how do you maintain quality and service when that time arrives? Simple, stop giving raises! Start establishing goals and reward with a % of the increase as a bonus for production. The team is now incentivized to help you make money. That’s how you get people to help you make money.

The Vendors … A well organized business of any size can be a little powerhouse, focus the power. Chose vendors by what they can offer to help you be successful. The quality and service they can provide allows you the opportunity to streamline your organization to maximize production. You need to go into these relationships with your eyes wide open. Its not about the price, that can always be negotiated with an agreement of an on-going relationship, its about the quality of the services being provided. Choosing a vendor is an investment, what’s the ROI?

The Value … I can’t tell you how many clients tell me that they changed accountants because the accountant was too expensive. That may be one of the most foolish statements a business owner can make. What type of services were they getting? Those clients chose price over quality and service. If price takes over the conversation, quality and service will be reduced as will overall revenues. You have no expenses, only investments in quality. What’s the ROI?

Price– Quality– Service … Pick 2 because you can’t have all 3… Quality organizations associate with other quality organizations. I prefer quality. If I can help a client be more successful and do more dentistry, then they will welcome more of my services, everyone wins with quality & service, especially the patient.


August 11, 2016 Posted by | Uncategorized | Leave a comment

Everyone Wants a Raise! What happens when a long time employee exceeds their market value?

As a business owner or manager, there are some very difficult decisions that you will have to make through-out your career. Some of the hardest involve your team and their compensation vs production (value).

In a different time an annual wage increase was standard business practice, but in todays economy when operational cost are continually rising, there is not much left over to give to the team, and, you will be expected to give again next year. How can you do it? You can’t keep giving. As an example, a good dental assistant (in northern NJ) will command an hourly wage of $18-$25 per hour. If that quality employee stays with you for 10 years that wage may run as high as $35 per hour and be far above market rates. How do you deal with a team member that has been with you since you bought the practice, is over paid, under produces, but the patient love them? Here comes that difficult decision.


Quality is the key to success and a quality team is one of the most important investments your practice can make. The question is how to compensate them, keep them, and help them “grow” with you and the practice?

There are many creative ways to compensate and retain quality team members. But first you need to up-date and complete your employee management program. Team management is part of both your defensive (risk management) and offensive (production) strategies. We all know the risk management issues, they are the ones that cost you money and everyone is try to sell you. The offensive side relates to production and we don’t talk enough about it.

Some of the most successful practices I deal with offer “employee extra’s”. Everything from bonuses tied to production, medical benefits and 401K programs attract and retain quality team members. If you establish realistic incentives as part of your compensation program you will see production increase. As leader you need to motivate your team and compliments only go so far. People go to work for mostly one reason, to make money. And if you want people to help you make money, you have to let them make money. Let them make extra money by incentive programs.

Talk to your financial advisor about establishing a 401k program, one that requires several years for vesting. Matching funds can be tied to production goals. You may be surprised how this small investment will pay off. Now, every team member has something to lose if production is flat.

There is a great employee management program that was just released. Check out the link and please contact me with any questions or concerns.



May 7, 2016 Posted by | Uncategorized | Leave a comment

Taxes Are UP & Patient Flow Is Down

I remember the first 5 minutes of my first marketing course. The professor started off by saying “marketing 101, packaging is 95% of the sale”. This is a very important concept to consider when addressing declining patient flow and new patient scheduling. The culture of your dental practice is your package and it needs to fit in with the patient base you want to attract.

3746264620_219187d772 Dr. Omar Reed believed that your reception room should be as nice as your patient’s living room. That was 35 years ago and the only thing that changed since then are the decorative styles. Think about it, if your office looks old, no matter how great your dentistry is, the perception is old. If your office is clean, modern and bright the perception is that your clinical skills are also modern and bright. The average patient doesn’t know how good you are, they just know if they like you and feel comfortable. The passion for the patient’s overall health that you and your team exhibit is the bow on your package. When was the last time you repainted the office? What do your floors look like? What does your patient look like? Think about what you want people to think when they walk into your house?

Marketing your practice should be a coordinated effort across all medias. And what the patient sees on your website is what they expect when they walk through the door. I can’t count the number of offices that have great websites or Facebook pages and the physical location is a downgrade.

The patient market that your practice in is also a major factor. When was the last time you did a demographic study of the area you draw your patient base from?

Multicultural-People If you opened your practice 20 years ago and the area had a heavy Italian population, that may be shifting to other cultures. Addressing those cultures may require a different package. Bank of America Practice Solutions and Henry Schein offer real time demographic reports that include age, income, ethnicity, family size, etc. These reports should be considered so that you can realize the maximum ROI for your 2 year marketing program. That’s right, a 2 year plan.. The world is changing too fast to plan anything further out.

office-waiting-room What does your reception room look like? Remember, it is NOT a   waiting room because your patients don’t wait, or do they? When your patients are on line at the super market, they are seeing a flat screen with advertisements and current magazines. What do they see in your office? Sports Illustrated with last year’s Super Bowl round up? All the magazines and wall décor actually compete with your treatment plan acceptance so keep it current and dental health orientated. I see some beautifully decorated offices that keep well within the healthcare theme.

Marketing programs are not an expense, they are an investment, however, for the investment to produce a healthy ROI, you need an organized plan. Maybe it’s time to Brand Yourself and stand out from the crowd?

Please feel free to contact me with any questions or concerns.

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April 10, 2016 Posted by | Uncategorized | Leave a comment

What keeps you up at Night?

stress over Debt  It takes a special kind of person to be a business owner, especially a successful one. If you never had to make a payroll or cover a business loan payment then you can’t understand. It’s that low rumble deep inside that keeps you up at night. The rumble you get when not knowing if you will be able to cash your own pay check. It’s the rumble you keep to yourself and hide with a smile and a positive attitude.

Running a successful dental practice is no different than any other business. When you break it down to basics, you are buying and selling goods and services. You are an employer and employee, marketing director, compliance officer, human resources, purchasing agent, CEO, COO & CFO. You are sitting on top of a mountain taking dirt from one side and packing it on the other to keep the mountain standing. It can become an endless cycle that you can’t seem to get out of. Did you ever hear the saying “your too close to the forest to see the path through the trees”? Maybe its time to step back and look at your situation through another pair of eyes.

increase-sales-bottom-line  When was the last time you had a discussion about the cost of operations? Who did you have that discussion with? If you have a progressive accountant, they may be able to help but they are money and contract people and can only advise you on standards. Every business is different and for any advisor to suggest sound and constructive changes they need to understand the intimacies of the work day. An owner/manager’s dreams, plans and personality as well as that of the entire team, deeply effect day by day operations.

I have a client that called me last week all excited that after 5 years of struggling they realized a 15% increase in production in 2015 and scheduled over 200 new patients. They spent $35k over a 12 month period on a personal dental management consultant, followed a “customized” plan that was unique to the office personality, and increased revenue by almost $100k. The investment and the educational experience were a huge success. There is an old saying “give a man a fish and you will feed him for one day, teach a man to fish and you will feed him for a lifetime”.

Business operations are more than crossing the I’s and dotting the T’s. Procedures and protocol are essential, but so is leadership. You have a large investment in your team and when they fail it is your fault. As a leader, you did not follow-up your investment with training and reward. I am a firm believer in the 80/20 rule and 80% of my client base have complaints about team members. The conversation is always the same “I wish they would” or “I wish they wouldn’t”. Well, here is a foolproof solution, train them and if they can’t provide a positive effect on the operation, replace them.

The Problem is that you don’t know how to train them, that is not what you do. As soon as you realize that you are on the road to a productive future. Interview consulting groups, different groups offer different programs. Talk to your financial advisors about a detailed evaluation of you dental practice and team. Find a Practice Management Group to work with your advisor to conduct the evaluation. Being a great leader requires surrounding yourself with quality people. Below are some groups that I have experience with and trust.

Straine Dental Consulting

Million Dollar PPO

Jameson Dental Management

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March 28, 2016 Posted by | Uncategorized | Leave a comment

It’s All About the Bottom Line!

Tooth2  Did you ever figure out what your time is worth? I don’t mean what you get paid, I mean what is it worth. If you sit chairside for 32 hours there has to be another 15 to 20 spent working on treatment plans and managing the business end of the practice. What is 15 hours worth in dollars? At $50.00/hour it amounts to $39k/year. If you earn $150k/year, do the math. Now think about the non-revenue generating tasks that you and your team need to preform to fuel revenue production and cash flow. What is the investment value of that time? If you could transfer some of that time to production, how do you think it will effect your bottom line?

Outsourcing is an effective way to reduce time and capture lost value. Remember that word “VALUE” because that will dramatically effect your ROI. Let’s start with the simple stuff like printing and mailing statements. If you need to mail 500 statement, how long does it take your team to print, stuff and stamp? For 55 cents per statement why wouldn’t you use one of the HIPAA compliant services? If it takes 2 hours to print fold and mail, what else could the team be doing for 2 hours? How much does it really cost to do it yourself?

Then there is the most expensive statement you can make to your team “just get me the best price”, When you should be saying is “just get me the best deal”. The best deal is the best value as it relates to the global scope of your business. Here is an example, some of you may know this story: When I ran my own company we used to sell a lot of Crosstex products. They were a great company and we were very friendly with the upper management. They would send their truck to our warehouse once a month with a couple of thousand cases of bibs, cups, saliva ejectors, etc. One day another manufacturer approached us and offered the same deal at $1.00 per case less. Its hard to turn down several thousand $$ per month. However, we were loyal to Crosstex so we contacted them to see what they could do. One week after a friendly meeting at our office, they got back to us with their proposal. They couldn’t give the $1.00 per case but they did offer something else., they would deliver to us once per week. Now we could carry 75% less inventory, turn it over 6-7 times per year, free up a large amount of warehouse space (think about the cost of a sq. ft. of floor space in NJ) and spend less time unloading trucks. That “value” was far more than the money we would have saved.

increase-sales-bottom-line  The reason you automate is to save time and increase efficiency. The most successful organization look for fair market price and discounts but way-in delivery time, fulfilment rates and operational solutions. Many of the dental offices I walk into do not have an inventory management solution. The practices that utilize technology in their purchasing department don’t have items expiring or sitting on a shelf for several months. Inventory carrying cost can be the hidden expense that you need to translate into dollars. Do you know the value of your inventory investment? Do you know how fast it turns over? Have you ever taken a physical inventory?

You run a business and time is money. The more time you spend shopping for the best price, tracking multiple shipments and guessing usage rates, will eat up any savings you think you are getting. Focus your buying power with organizations that can provide “Just-In-Time” inventory solutions and the time saved can be turned towards production. Try Aruba EZ, it’s Free.

Please feel free to contact me at any time with any questions or concerns.

image006 Inventory Management Software, It’s Free!

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March 13, 2016 Posted by | Uncategorized | Leave a comment

When it doesn’t feel right, go left…

Go it alone

Yogi Berra once said “when you come to the fork in the road, take it”. Think about your dental practice and the culture it projects. Is your clinical culture similar to your dentist friends? Do you collaborate and involve yourself in dental chat rooms? Do you read and discuss product reviews? Do you react to the crowd or do you learn and lead? On & off line discussion is very valuable but what works for one may not work for another. Your business is unique to you, your personality and your clinical comfort level.

I read a great article in the North Jersey Record’s Sunday, February 14th addition. It was about the Veterinarian industry and it is another look at what is coming to dentistry.

The article questioned if young graduating Vets would ever own there own practice. With enormous educational debt and mounting living expenses, the average graduate can not afford to buy a practice and be able to compete. So, they go to work for a group practice, or shared groups just like what is happing with your medical counterparts. So, now you, the dentist, is at a fork in the road. You can invest in your practice and grow it to a level that you need an associate and specialists on-site or you can keep going the way you are going and sacrifice your ownership equity that may be built into your exit plan. Maybe it is time to re-examine your retirement strategy. The changing landscape in all forms of healthcare will dramatically effect your “life after dentistry”.

The direction you chose to go should depend on where you are in your career, your desired life style and what part of dentistry you enjoy the most. If your plan is to practice dentistry for another 5 years or more, I would suggest an investment in technology to keep your business up to date and attractive to both patients and potential associates. Without an investment, your practice will begin to lose value despite your gross production. The age of your patient base is also a factor in value (equity). Typically, a dentist’s patient base is within 10 years in age (+/-) of the dentist. Technology brings in a younger crowd as will a young associate and you don’t need to mortgage the farm to be on the cutting edge as long as you are in the game.

If your exit plan is less than 5 years and you are not inclined to make a further financial commitment in your practice, you need to create a transition strategy and put it in place as soon as possible. A transition strategy can be as simple adjusting your bookkeeping methods to as complex as a practice merger. A practice merger at the end of a career can be very financially satisfying if structured correctly but it will require the help of a transition specialist, so plan on paying a small percentage of the deal to retain their services. Please don’t try to do this yourself, you know how to fix teeth, not create contracts and don’t think that your accountant or attorney can do it. They are there to protect you and crunch numbers, not to negotiate a relationship.

So, where do you go from here? For the next 3, 5, 10, 15 or 20 years will you follow the crowd and do as they do? Or, do you go left and forge your own trail? Listen to the experts, don’t try to reinvent the wheel, but make sure that you are driving the bus to where you want it to go.

Please feel free to contact me at any time with any questions or concerns.

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February 18, 2016 Posted by | Uncategorized | Leave a comment