What’s the difference between a dental practice and a dental business? The answer will set you on the road to long-term success.
Not all dentists think of themselves as business owners. It’s easy to get swept up in the work of day-to-day practice and lose sight of the business you set out to build. And that’s bad news. A dental practice is very different to a dental business, and comes with some key limitations that could be holding you back from achieving long-term financial freedom.
What is a dental practice?
A dental practice essentially runs on the reputation of the principal dentist. Your name is on the door and your patients come to see you. You’ve built relationships with them over several years. They trust you, they like you, and they recommend you to their friends.
Those are all very positive things, and you’ll likely be making a good living. However, there are some limitations to the dental practice model. First — and perhaps most importantly — your income is capped to the number of hours you can work. People are coming to see you, but there’s a limit to the number of people you can see.
That’s fine while you’re young and happy to put in long days, but it can come back to bite you when you want to slow down. After all, your patients have a relationship with you, not the new dentist you’re trying to pass them on to. And that means when you disappear, so does the goodwill you’ve built in your practice.
The dental practice model also makes growth difficult. You can only be in one place at a time, so opening additional clinics based on the strength of your personal reputation can be problematic.
Then there’s the sale value of a dental practice to consider. Take Dr John Doe out of Dr John Doe Dental Surgery and what is the new owner left with? A nondescript dental practice with the main drawcard (you!) out of the picture. So after many years of hard work, your dental practice won’t be worth much more than the tangible assets you own, or what a corporate interest is willing to pay you to absorb the practice into its network. At best they are buying your customer database.
“When you disappear, so does the goodwill you’ve built in your practice.”
What is a dental business?
Running a dental business requires a completely different approach. It’s bigger than one person, and while your expertise will be the driving force behind the business you develop, the business doesn’t need you to be there day-in and day-out to prosper.
Why? It’s all about building a brand and setting up work processes that can run without you being physically present.
Think of it like this: You build a dental business based on key brand values, not on the strength of your personal relationships with patients. The goal is to ensure your patients receive a consistent experience whether they see you or a dentist you employ. That’s where your work processes come in — you can train dentists and support staff to follow the system you’ve set up.
Get it right, and you become just another dentist working in a thriving dental business. That’s a good thing because it means you can step away when you need to without losing revenue. Suddenly your income is no longer dependent on the number of hours you’re working.
It also makes growth much easier. You can replicate your tried and tested work processes in new clinics opened under the same brand. The business you’ve built is scalable — and that is much more attractive to investors who can inject the cash you need to keep growing.
“Suddenly your income is no longer dependent on the number of hours you’re working.”
And when it comes time to sell, you’ll have something much more valuable to offer — a complete dental business that is not dependent on your presence. The new owner can step in and run the business without missing a beat, while you sail into the sunset.