3 signs it’s time to call in the cavalry
In any business that’s growing, it’s inevitable you’re going to go through different stages. In simple terms, there’s:
- startup mode for the first few months/ years, where you have to figure out how to do everything that comes with running a business;
- growth stage, where systems are now basically working and you’re looking to build your client base and turnover; and
- finally, there’s the maturity stage where your business is at or near capacity.
Why growth matters
Unfortunately, business growth isn’t so predictable in terms of the timing of going through these different stages. Some businesses grow quickly while others, unfortunately, never make it to the maturity stage.
Like a ship setting off to sea, a good launch is important. The trajectory of your business in the first year is critical to its long-term success. It’s basically a case of “grow or die”. This is particularly because most of your fixed costs (equipment, rent, IT, utilities, etc) are in place in the first year, yet there’s a lag before the income arrives to offset those costs. With this in mind, it’s important to recognise that as your business changes, there are key times where you’re going to need help if you’re going to keep progressing. Sometimes, you really need to “call in the cavalry” to get to the next level.
Start-up mode
I remember vividly start-up mode in my business. This is the point where you’re responsible for basically everything. You’re GM of Operations, CFO, Client Service Manager, Sales and Marketing Director and IT Support. The list goes on and on.
The benefit of this stage is you get an idea of how each element of your business works. But let’s face it, you can’t be good at everything, nor can you be everywhere all at once. I’ve seen dentists in their early days sitting on the reception desk, answering calls and ordering basic supplies. This may be appropriate when you’re first starting up, but only for a time.
Play to your strengths
For me, one of the most refreshing realisations in recent years (especially since I turned 40) is that I don’t have to be good at everything. There are many books written on this topic. Increasingly, HR gurus are teaching us that:
- We’re only really good at just a few things; and
- We should focus on those strengths, and delegate our weaknesses.
To boost your business, therefore, you’re going need to get some help.
The key to growth
In his book, Ready Fire Aim (no, that’s not a typo), business author Michael Masterton talks about the biggest hurdle for businesses attempting to reach $1 million in turnover. Any ideas what that hurdle would be? The answer is figuring out how to sell your services profitably: that is, how to bring new clients into your business in a profitable way. In days gone by for dentists, this question was pretty easy to answer:
- Set up your office;
- Put out a sign; and
- Voila, new patients!
With more than 2000 new dentists joining the Australian workforce in the last 3 years, the levels of competition have risen and more is needed to grow. This then leads us to the three specific situations where going it alone just might not be enough.
Sign 1: You’re not attracting enough new patients.
There are lots of ways to attract new dental patients. At one end of the scale is a scattergun approach with a little bit of marketing, here, there and everywhere
This could include anything from letter box drops to getting dressed up in a large white, tooth outfit and handing out leaflets at the local shopping mall (a small part of me would like to try the tooth outfit at least once).
At the other end of the scale is an integrated approach that presents a consistent message to potential new clients. Built into the system is an ongoing analysis of return on marketing investment so you know where you’re getting good return (which you should be able to get) and where you’re just wasting your marketing dollars.
No one likes the thought that you might be wasting marketing dollars, yet this can easily be the case for unmeasured marketing activities.
If you’ve tried to attract more patients but it’s not working, you probably need help from a dental marketing professional.
Sign 2: You’re not keeping existing clients
Wouldn’t it be marvellous if every new client you ever welcomed stayed with you for the term of their natural lives?
There’d be bi-annual check-ups, regular hygienist visits, a smattering of whitening and orthodontic work and then in later life, crowns, and implants – the whole shebang.
Alas, this is the point when you wake up, wipe the drool off your lower lip and realise you were only dreaming.
For some dentists, in fact, the above scenario may be not too far from the truth but in most cases, this is certainly not the norm.
Keeping existing patients active is a combination of giving them a great experience each time they come in and keeping your practice and services top of mind during the “in-between” times. The latter involves reminders about their next appointment and increasingly, ongoing engagement via social media and other forms of communication.
To fix this issue, you’ll need to start by measuring the retention rate among patients. A certain level of leakage is to be expected as patients move out of your area.
However, if your retention rate is below 50% and you’ve tried to get it above that without success, a new perspective will be invaluable. Business coaches can help to examine the efficiency of your internal/ clinical practices to boost retention, while dental marketers can help engage existing clients.
Otherwise, it’s like you’re sitting in the bath with the water pouring in the top while the water is, just-as-quickly, flowing out the plug.
Sign 3: You’re not on track to achieve your dental goals
The final sign that it’s time to call in the cavalry is more fundamental as it relates to your reason for being.
When you first opened your practice, what was your end goal? Did it extend beyond just surviving? Did you imagine you would have an asset to sell at some point and/or that your annual income would bring a comfortable, happy life?
You’ll have a pretty clear idea whether your annual income is achieving the type of life you hoped for. A good accountant can help you with financial modelling and profit analysis to see if you’re getting the return you should.
However, to get an idea of whether you’re developing a saleable asset, it would be worth talking to a dental business broker to see whether your business has the elements that potential buyers would want.
Conclusion Succeeding in business is a team event. As an effective business owner, you need to be a dentist and a CEO. But this doesn’t mean you need to do everything yourself. Sometimes it’s time to call in the cavalry to get you from where you are, to where you want to go.
* This article was first published in Australasian Dental Practice Magazine, September/October 2016 Issue