Successfully running just one dental practice requires an enormous amount of effort, so why are dentists deciding to invest in running multiple offices as part of a larger group?
In a trend that has continued to pick up momentum, the number of group dental practices in the U.S. has grown over the last decade. While a variety of market factors have contributed to this boom, two stand out as likely contributing the most to this recent movement.
First, a large number of Baby Boomer dentists have started to retire. In 2015, 42 percent of all dentists in the U.S. were over the age of 55. As this segment of the dental community begins heading towards retirement they’ve elected to sell their practices, often to younger established dentists looking to expand their operations within a given community or metro area.
The other reason comes down to debt. Millennials graduating from dental school now carry more student debt than any other previous generation. In 2016, the average dentist graduating from medical school was over $260,000 in debt. An increase in school tuition rates combined with a decrease in government funding has directly led to dentists entering the workforce under a mountain of student loans.
Given their already complicated financial situation, most dentists face a difficult choice. Invest in a solo practice – the average cost of opening a new dental office is just under $400,000 – or become part of a group practice.
Teaming with other dentists helps to reduce the financial risk of starting a new, independently owned practice. Group dental practices also have greater resources, providing them with the capacity needed to purchase and operate multiple practices.
More practices offer the potential for greater revenue and higher profits. Making more each year as a partner in a group practice is a great way to pay off that student debt more quickly.
Of course, running multiple dental practices comes with unique challenges. What works so well in one community may not generate the same level of success in another.
Let’s take a look at a few of the ways group dental practices working with Do More Dental have found success.
Create a Strong Foundation
Whether running multiple dental practices or a chain of gourmet hamburger joints, your business needs a strong foundation in order to enjoy success.
Developing a mission statement or an operating principle for your practices to function under can serve as the foundation for a successful business plan. You need to start with the basics, including plans for how you’ll manage your practice, develop a marketing strategy, ensure patient retention rates remain high, and how you’ll position your practices in each community.
As you develop and refine your plan, take the time to build on your basic understanding of the small details that can make a major difference in running your business. Knowing corporate structures, all relevant tax and labor laws, and important financial terminology becomes vital once you’ve expanded your practice beyond one office location. You won’t have time to constantly look up these types of important points of information, so you need to have the basic terminology and best practices down to help you facilitate running your business more smoothly.
Once you have a top down structure firmly established, future expansion of your practice becomes far more simple. Every new practice you open or absorb has a ready-made template you can apply to everything from ordering supplies to training new employees. While each practice should have the freedom to form its own identity, codifying the day-to-day operations can help to ensure that everything runs as efficiently as possible.
Tailor Each Practice to Meet the Needs of the Community It Serves
Even if operated under the same name, dental practices need to meet the different needs of their community if they hope to find success.
For example, if your dental practice caters to a largely residential community full of families, the services you offer, the hours you operate, and the way you market all need to reflect the type of dental care your potential patient pool requires.
Early morning and weekend appointments can help busy parents find the time to take their kids to the dentist around work and school. Providing in-house orthodontic services offers a lot of appeal to parents whose kids will need braces as they grow older. Creating a family friendly office environment can make visiting the dentist more comfortable for younger kids.
Conversely, consider what the needs of a dental practice located in a more urban or downtown setting might need to succeed. If condos filled with young working professionals surround your office, you need to cater to those potential patients in ways completely different than when catering to families.
Early evening appointments that allow patients to visit after work becomes a more appealing option. Instead of focusing on orthodontics and family dental care, specializing in cosmetic dentistry might offer more appeal to a patient base looking to dazzle with a brilliantly bright and attractive smile at their next business meeting. An office that markets itself through social media channels like Instagram can catch the eye of a young working professional in ways that might not appeal to parents.
One size definitely doesn’t fit all when developing a successful group dental practice. By keeping the needs of your community in mind when developing the type of practice to open, you’ll have a far greater chance at success than sticking with just one concept.
Invest in the Right Practice Management Software
A comprehensive practice management software system is key to running multiple dental practices. Managing multiple dental practices will create an enormous amount of incredibly valuable data. From scheduling and monitoring production to optimizing your hygiene program and reducing patient turnover, how you collect and assess that data will determine whether your group practice meets its stated financial goals.
Once upon a time, all a dental practice needed to run efficiently was a strong office manager. While great front office help can still make a significant difference helping your office operate efficiently, one person or even a group of people need assistance monitoring and analyzing the data your different offices produce.
With one management system helping run your group practice, you’ll have an easier time scheduling patients, communicating between offices, keeping charting up-to-date, and ensuring fewer patients fall off of their hygiene program.
When each office operates using a different system, you have created an obstacle that works to actively undermine the flow of information between practices. Holes in schedules become more difficult to plug, production metrics used in one office may not fit with those used in another, and profitability becomes harder to maintain.
Even if you purchase a practice that uses another system, taking the time and making the effort to have every office run from the same software will help you generate more revenue and greater profits.
Find a Marketing Partner That Will Help You Find Success
As we said at the outset, running one dental practice requires an enormous amount of time and energy, a commitment that becomes multiplied exponentially when trying to manage a group practice. Finding the time to meet the scheduling, staffing, and patient needs of multiple practices is more than just one full-time job, never mind the effort it takes to successfully market your practices online.
Just as each office of your group dental practice must serve the individual needs of its community to find success, you need to market each practice individually to find success. If you operate three different dental practices, you need to develop three different marketing strategies. Trying to tackle that challenge while providing a business with the leadership it requires can leave you feeling overwhelmed and frustrated. You need a team of professionals who specialize in providing dental practices with the marketing support they need to find success in the community they operate.
At Do More Dental, we act as your group practice’s full service marketing department. From website design and branding to improving local search listings and monitoring patient reviews, we can help make marketing your practice simple so you can keep the focus on the patient where it belongs.
Running a group dental practice can feel like trying to juggle multiple chainsaws. Without careful consideration and a thoughtful approach, impending disaster is just a moment away. Fortunately, by setting a strong foundation, keeping the needs of the community in mind, and having the right tools and help at your disposal, managing a group practice can become the profitable and exciting enterprise you’ve always imagined.