Cliff's Notes

The Business of Dentistry

Disaster Recovery & The First Product Review on SonicFill!

Cliff’s Notes for March 27, 2011

 

 

….. E-Blast….. 

 

Cliff Marsh, Henry Schein ……Cell: 201-321-7494……Fax: 201-262-2210…..E-mail: cliff.marsh@henryschein.com 

http://www.cliffsnotesblog.wordpress.com

 

 

People only see what they are prepared to see.” 

Ralph Waldo Emerson

 

        

In This Week’s Issue

·         Cash Flow – Part IV – Disaster Recovery!

·         Product Review – SonicFill is Coming April 15th!

 

 

Don’t forget to check out the “link” section of the blog.

Check out “GURU”

 

 

Disaster Recovery!…………………………………………………………………

Disaster Recovery in business is usually thought of as how an organization is going to respond to an interruption in business. That could be anything from a flood to a computer crash to a lawsuit. But there is another disaster that many of us avoid preparing for.

 

This scenario is a little brutal, but it needs to be said. You’re driving home from a long day sitting chairside and there is an accident. You are hurt badly maybe even killed. Now what? Your surviving spouse and children will be financially secure because you are well insured, but what about the practice? What about your partner or associate? What about your patients? The chances are that the equity built in your practice was a major part of your estate.

 

Does your estate plan take into consideration a “distress sale”? Several years ago a dentist friend of mine passed away suddenly. It happens! He was a solo practitioner grossing $1.3M in the previous year. He was in his late 50’s and had just begun thinking about taking on an associate. It was a great practice with potential for more growth. There lies the problem, it WAS a great practice. After a week of being closed, his surviving spouse needed to address the needs of the “family business”. A dentist family friend jumped in to help cover the patients but the patients were not committing to rescheduling. After 3 weeks, patients began cancelling and production was dropping fast. To make a long story short, the practice was sold 3 months later for about $400k. The surviving family lost $500k in equity value because of the idea that “it will never happen to me”. So, how could this financial tragedy have been circumvented? With a plan! The plan starts with a discussion with you account and estate plan advisor.

 

The chances are that surviving family members are not familiar with the functions of a dental practice and at a time of such intensive grief will not be able to think clearly about what has to be done or in what priority order. We all have at home, or should have, that envelop with all the contacts and clearly written instructions about what to do and where to go in the event of a disaster or death. Why isn’t there one for the business?

 

Here are 3 points you need to address should you not be able to continue managing your practice:

  1. A contact list for your spouse that includes attorneys, accountants, insurance brokers and covering professionals.
  2. A “to do” list for your staff specifying how to contact and inform patients and vendors.
  3. A pre-arranged plan to transition the practice as quickly and orderly as possible.

 

Point #3 is the toughest. Your executor needs to have an up to date practice evaluation and a contact for practice transition. A practice transition specialist is not a practice broker. A practice broker brings buyers and sellers together; a transition specialist is involved with your accountant and insurance representative at the disaster planning stage and can expedite a transition with the highest possible return. The transition specialist helps create and, when the time comes, implement an exit strategy.

 

If there is an associate or partner, there needs to be a pre-arranged “buy/sell” agreement. You don’t want your spouse to have to negotiate at a time of grief or concern. If you are the partner or associate, you don’t want to have to negotiate with a distraught spouse that is now your partner. Buy/sell agreement are usually funded by life insurance and should be revisited and adjusted annually. Those adjustments are based on annual evaluations by a transition specialist and your financial adviser.

 

After running my own organization for over 20 years, I have explored, implemented and up-dated several disaster recovery plans utilizing experienced and qualified professionals. Experience and contacts within the dental community are important and this is a great topic for study club presentations.

 

This is necessary security for you and your family. Please feel free to contact me at any time with any question or concerns.

 

Product Review: SonicFill will be introduced by Kerr on April 15th!

 

This is the first industry pre-view of the SonicFill Posterior Composite System. The formal introduction will be on April 15th.

 

Now chair time can be reduced by 15-20 minutes. That may allow you to fit 1-2 more patients into your schedule. That’s what it takes to increase revenue and reduce your overhead’s footprint on your bottom line.

 

 

 

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March 27, 2011 - Posted by | Uncategorized

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