Back in 2008, I visited a dentist who was inquiring into the purchase of a second office. He believed he had maxed out his current office in patients and space. When I sat down with him I noticed that he had a small hole in his pant leg and one of the soles of his shoes was coming off. This struck me as odd since we were sitting in a very nice looking office.
The conversation went back and forth as to what this dentist was looking for and then I asked “How many active patients do you have?” The dentist answered “I don’t know.” My response to him was, “Why are you trying to buy more patients when you don’t even know how many you have in your own practice?” He seemed dumbfounded by that question. Also, I asked to review his tax returns. I noticed that his recent tax return showed a net profit of only $65,000 even though his practice was collecting $525,000.
I could not believe it. When I asked about the $65,000, this dentist walked to the door and closed it. He sat down and said “I’m about to tell you something not even my wife knows. I hate dentistry and if I could I would get out tomorrow. Just sell the darn thing and let’s be done with it”. This dentist believed that if he purchased another practice he would increase his net income. He did not realize that the lack of practice management was his problem. With so little income being deposited into his bank account, he had grown to hate the very profession for which he spent of his life and money preparing.
I explained that I could certainly sell his dental practice quickly, but that was not the right answer to his dilemma. I asked a dental practice consultant to spend one day in this dentist’s office. Hopefully the consultant would quickly determine the weakness or inefficiencies of his practice and staff. At the end of the day, the practice consultant walked into the dentist’s office and said, “I have good news and bad news. The good news is that your practice has a long way to grow and we can achieve immediate gains. The bad news is your front desk employee is so territorial and domineering that the staff are afraid to do their jobs. She is hurting morale and your practice.” With that statement, the dental practice consultant left.
Shortly after, the front desk employee walked into the dentist’s office. She said she was very uncomfortable with the practice consultant, and either the consultant or her had to go. The dentist tells me he took the biggest leap of faith and said, “Thank you for your 16 years of service, I accept your resignation.”
Where is he now? The practice grew over $400K in the 12 months after the employee resigned. 2 years later the dental practice had doubled in revenue with a new office manager and a focus on teamwork. Since focusing on practice management, he was able to gain a partner and the rest is history. Both dentists together are collecting over $2 million annually. To this day, this dentist will tell me that he cannot believe he allowed a single employee to determine the fate of his practice. No staff member is worth $400k in collections.
