If you're considering building a new facility, this is probably a time of great excitement and enthusiasm. This is your chance to fulfill a dream-and here are a few tips to help you avoid any nightmares along the way.
Breaking It Down: Practice Investment Areas
The best way to escape all nightmares is to have a good business investment strategy for your practice. After all, a new facility is a major commitment of every resource you currently possess. The allocation of these resources, particularly your money, needs to be consistent with the current position and goals of your practice in all investment areas. The investment strategy outlined here should guide you from your current position on to the next step: Once you’ve evaluated your practice and discovered where you are now, you can determine where you want your practice to go.
This strategy came out of the examination of data from hundreds of dental practices, in which four significant areas for practice investment have been identified:
- Credentials/Training: Clinical and management training for the dentist and the entire team.
- Equipment/Technology: State-of-the-art technology and ergonomic equipment for delivering high-quality care consistent with everyone's skill levels.
- Marketing: Utilizing internal and external marketing for your practice's growth.
- Facility/Location: A thoughtfully designed modern facility located in an area that can support the quality of care your team is committed to providing.
Credentials and Training.
The data shows that the most important investment any practice can make is in credentials and training. Good training with an emphasis on excellent performance heavily impacts quality of care, especially when providers are confident that they offer the best care available. Investments in training are just like any other investments in business: They return more when they are continually reviewed and refreshed. When a dentist invests in a modern facility with excellent technology and operatory equipment but ignores training for key clinical personnel and management, for example, the practice will fail to reach ownership goals. Conversely, many practices in marginal facilities or locations can do better because they have an expert practitioner and dental team, versus others whose facilities only seem to look better, .
Equipment/Technology and Marketing.
Investment in equipment/technology must go hand-in-hand with an investment in marketing. Your operatory systems (Care Suites) should be designed with the health of the clinician and the patient/guests in mind. They should create a measurable increase in efficiency and productivity based on time and motion standards. Make sure your equipment maximizes the roles of your personnel utilizing true four-handed dentistry not just assisted dentistry. Why have equipment that forces the dentist to constantly stop and start to reach, pick-up, turn twist and even change the focus of their eyes when the assistant could actually anticipate the need?
These caveats make budgeting for the practice crucial, though there is no standard dollar amount or percentage of revenue you should allocate for any of these categories. As your practice evolves into an Independent Practice Model, maximizing the return you get on your investment is critical. With limited resources, you cannot afford to squander them on inappropriate or ill-timed investments.
You're wise to approach these investment areas in a repetitive cycle: Invest in the technology, then invest in the marketing of the practice, then earn a return on your investment and, finally, invest again. For example, if you were to invest in intraoral microscopic technology (more advanced than intra oral camera) for perio care, first you’d purchase the equipment, and then you'd acquire the skills to use the technology. This new, competitive service could and should be used as a springboard to marketing, and as the marketing brings in more patients/guests, the increase in profitability recoups the initial investment-and sets the stage for the next investment. No matter where your practice currently lies in this investment cycle, be sure to complete each step before moving to the next.
Where should you start: at technology or marketing? Consider where your practice currently stands. Consider having an exhaustive evaluation completed before planning and before purchasing anything- no different than a comprehensive exam you would require for best guests care. Keep in mind that all practices are at differing levels and varying degrees of implementation in investment strategies. Many practices are evolving into high-end general practices with focused components (Independent Practice Model), such as cosmetics, implants, orthodontics, sleep apnea, and occlusion. Hygiene departments are evolving into "Wellness Centers" caring for the "oral systemic connection" and going far beyond a soft tissue management program. Three factors combine to make this a powerful model for creating a special identity which generates new patients/guests from marketing, enthusiastic guest's referrals and even referrals from physicians:
- the modern lifestyle bringing heart disease, diabetes and cancer into the news
- the wealthy baby boomer generation seeking health and infinite youth
- the research on the"Oral Systemic Connection" which shows that periodontal disease is intrinsically connected to these systemic diseases and treatment of periodontal disease can measurably reduce their risk.
A well-established practice evolving into this model might be well-served by investing in their own brand-recognition program. On the other hand, the injection of improved technology into an established practice with a stable client base can revive the enthusiasm of your patients/guests.
Facility and Location.
Although the prospect of building a new facility can be exciting, in many cases it is the last step in a practice's investment strategy. As you probably are aware, the cost can be prohibitive, and it's easy to run over-budget! Before you proceed with this last investment, know your numbers and stick to them.Perhaps most important, do your research to find the most suitable location. Are you building in the most appropriate area for the style of practice you want to develop?
The location for this style of practice need not be in the most exclusive part of town. Secondly, a thorough evaluation of your current space, organization, and potential is a particularly wise investment that could yield a number of options that aren't obvious, particularly once your future goals have been considered. For the unprepared, particularly after the excitement of moving into a luxury location wears off, the reality of years of high payments could be discouraging. Evaluate a new building design in light of whether your existing office could be renovated into the office you want. Regardless, with so many improvements in ergonomic suite design, clinician positioning and posture, the need to manage materials and technology and the streamlining of business transactions, new and renovated offices are requiring more thought and planning than ever. Be aware that a significant portion of your new facility’s cost comes should from the current practice profitability that has been budgeted for this investment. Don't rely just on bank loans. In this new era of entrepreneurial dentistry, a modern, properly designed facility is a necessity-and you can comfortably design and build a new one when you plan ahead.
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