THINKING BUSINESS
a blog by Chris Barrow

The car wash

Back in the 1980’s I was the pension advisor for a client who owned and ran a petrol station in Blackpool.

As we inspected his accounts he taught me that the difference between winning and losing in his business was a car wash.

The profit margins on the petrol were controlled by the big oil companies and were so slim that the business couldn’t be sustained at the pumps.

He had to persuade the drivers to have their cars automatically cleaned – and hopefully buy some chocolate whilst they were waiting.

There are few family-owned stations now and the survivors have turned into mini-supermarkets.

Part of the same process that has corporatised (is that a word?) pharmacists, opticians, vets and, now, dentists.

At the risk of banging a very old drum – the difference in healthcare is that you are messing around with what makes people work properly – and that requires a higher degree of responsibility that selling commodities.

The VW emissions scandal is a predictable response to shareholder pressure for return on investment (although it would have been fascinating to be at the meeting where someone raised their hand and said “I’ve got an idea – why don’t we just lie?”). That same pressure on healthcare providers is scary.

The profit margins in day to day dentistry are going to get squeezed further and, ultimately, only the corporates and micro-corporates will have the economies of scale to survive.

It’s the occasional dentistry that will provide a living for the smaller independent and you had better be good at it.

Or open a car wash inside your practice.

I know I’m going to get vilified for this – but – a well managed hygiene-therapy department would achieve the same result.

(ducks to avoid rotten vegetables)

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