THINKING BUSINESS
a blog by Chris Barrow

Training for a Marathon? You Had Better Be…

As Christmas approaches I am nearing the end of three months of relentless travelling around the UK and Eire, speaking to audiences, listening to clients and in conversation with those who can influence the future. If you have been following the ezine, the blog and the social media streams you will know how mad and inspirational it has been. Summarising the ‘state of dentistry’ as is stands at November/December 2010:

  1. between 2012 and 2015 we know that

  2. the UDA system will be gone

  3. the PCTs will be gone

  4. Orthodontists are worried about what will replace the UOA

  5. GDPs are wondering what on earth next?

  6. CQC registration packs finally being picked up and read by long-suffering dentists, their spouses or their practice managers

  7. there will be a raft of new compliance and regulation

  8. all of the above will be replaced by new systems (as yet unspecified) that will focus on

  9. the patient experience and

  10. the quality of diagnosis and treatment planning

  11. The CQC are searching for ways to identify fully private practices for registration and regulation (more difficult to find you than you might imagine)

  12. the corporates are committed to getting bigger

  13. IDH have announced a plan to grow from 300 to 1000 practices

  14. IDH are reported as being ‘up for sale’ – this make zero difference to their plans – “the banker is dead, long live the banker”

  15. Oasis and ADP appear to be gearing up for expansion

  16. J D Hull demonstrates the characteristics a rudderless ship, nobody outside can tell if the ship is taking on water or not (I sometimes wish somebody would call and ask me to run it)

  17. there are increasing numbers of micro-corporates, mini-corporates and mid-sized corporates springing up – privately owned – mainly NHS

  18. the major corporates are still primarily interested in buying NHS-only – they see great future risk in buying private because of overall economics and the difficulty in recruiting good private associates

  19. Gary Chapman (former JDH acquisitions manager) is buying private and specialist practices on behalf of Portman Healthcare – looking to replicate the bits of JDH that worked

  20. the retailers may or may not have decided to take part – if they do – big change

  21. Sainsbury – 4 practices now prospering by offering ‘cheap as chips’ private dentistry

  22. Tesco – up and running in Slough with the same offer as Sainsbury

  23. Tesco – reported as acquiring planning permission for in-store dentistry in Scotland, opening deferred until early 2011

  24. Boots – new CEO expresses interest in ‘well-being services’

  25. House of Fraser – developing in-store high-value dentistry by concession

  26. Strong reports that hygienists and therapists will be granted direct access during 2011

  27. registration course under construction

  28. GDC seeking opinion

  29. first hygienists and therapists able to run their own businesses sometime in 2011 (or work unsupervised in dental practices)?

  30. Smilepod working well in Covent Garden and planning to expand

  31. in general dentistry, do therapists at 35% represent a good alternative to associates at 50%?

  32. Marketing systems in dentistry booming

  33. modern branding throughout independent practices

  34. web sites that capture date and encourage enquiries

  35. social media marketing strategies

  36. relationship based marketing being taken to new heights

  37. local B2B networking rising in importance

  38. print media and directories declining in importance

  39. direct marketing declining in importance

  40. radio and signage rising in importance

  41. Sales of certain products and services in dentistry are booming

  42. whitening in all its forms

  43. facial and medical aesthetics

  44. veneers

  45. Cerec crowns

  46. Lingual ortho

  47. Dental implants

  48. Denture stabilisation

  49. high value smile makeovers

  50. high value recon and rehab cases

  51. Properly branded membership schemes

  52. new patient assessments with treatment co-ordinators (TCOs)

  53. Sales of other products and services are under pressure

  54. new patient consults with clinicians

  55. maintenance dentistry (check ups)

  56. maintenance hygiene (S&Ps)

  57. some capitation schemes are in net membership decline

  58. Invisalign – very interesting

  59. an Invisalign price war has started in London (latest Google search reveals Invisalign at £1450) and is spreading

  60. signs of panic from dentists holding large stock

  61. some dentists jumping off the bandwagon and offering ‘6 month smiles’

  62. changes in the people who populate dental teams

  63. telephone and reception separated in practice

  64. Welcome Team members trained to a much higher level

  65. TCOs appearing everywhere

  66. Values-based selling skills rising in importance

  67. Payment plans now considered standard practice

  68. Business Development Managers appearing everywhere – often no previous dental experience

  69. Increasing recognition of the business case for therapists

  70. And its getting harder to manage multi-site practice and be a dentist as well, unless you have a world-class management team

  71. Some demographics are buying dentistry:

  72. 25-35 singles or DINKIES

  73. 35-50 “Yummy Mummies”, “Desperate Housewives”, “Glamorous Grannies”

  74. affluent over 50s (all social classes)

  75. affluent over 65s

  76. all gay men

  77. And some are not

  78. ordinary families

  79. teachers and other academics

  80. engineers (except for higher-value treatment plans)

  81. public sector workers

  82. Some price levels are selling well

  83. anything below £120

  84. anything over £3000

  85. Some price levels are difficult to get agreement on

  86. anything between £120 and £3000

  87. It is pretty obvious what’s going on here

  88. patients are buying if its cheap

  89. patients are buying if its paid for from capital/assets (might as well – returns on investment are lousy)

  90. patients are not buying if its paid from discretionary income

  91. Some geographical areas are feeling the pain already

  92. inside the M25

  93. The Republic of Ireland (where there is now emigration of hygienists and dentists)

  94. Some geographical areas are felling fine

  95. everywhere else

  96. But you do need a location that exposes you to the demographics above who are buying

I could probably go on – but by now you must have the picture. The best are getting better. The weak are getting worse. The middle is dropping out of the middle. Let me repeat. The middle is dropping out of the middle. Its the most dangerous place to be. My biggest source of new business enquiries (for business coaching) right now? “Hi Chris, I’ve been reading your stuff for some time now. I’m setting up a private squat with family money. We have the location, the property, the planning permission and I want to open in 6 months. I need you to co-ordinate the launch and the successful establishment of the business.” Im astonished at how often a version of that email or voice mail arrives – perhaps once a week at the moment – all over the UK. My second biggest source of new business enquiries? “Hi Chris, my practice is successful but we have stayed the same in terms of sales and profitability for three years now – I need you to come in and show me how to break through to the next level. To help me re-brand, retrain the team, re-edcuate the patients and establish new models of business that will secure me in the next 10 years.” My third biggest source of new business enquires? “Hi Chris, I’m thinking that in the next 5 years I’d like to have the option of either slowing down or getting out of the rat race altogether. I need you to help me figure out my end game and clarify for me how best I can create a succession plan for the business that benefits me and my family but also ensures that the team and the patients have continuity of the care and service levels that have always been our core values. I don’t want to sell to the quickest/highest bidder and sell the team and the patients down the river.” So here is a message for all independent practice owners – right now. Take stock. Take the time out to think. Decide exactly where you want to be by 2015 in the face of the changes outlined above. I’m advising my clients to take a short term view as well. After Christmas and New Year there could very well be a major reduction in everybody’s discretionary income spend an all goods and services. So create a cash flow forecast for your business and your life from 1st December 2010 to 31st May 2011 – 6 months. Figure out exactly:

  1. what do you need to live on?

  2. what does your business need to pay its way?

  3. what sales do you need to achieve to finance the above?

And set those sales targets for the next 6 months – communicate them to all the team then watch the numbers like a hawk. The start of 2011 could be a very tough place. Be prepared. Most importantly of all – get away from the middle. Do something very cheap or….. Do something much more expensive. And thus positively differentiate yourself. Then get ready (and get your team ready) to work harder than you have ever worked in your life. You had better take a rest over Christmas because like me and my team, you and your team are going to need every ounce of energy, passion, enthusiasm, commitment, drive, relentless stickability, innovation, leadership, management and communication skills that we possess. And then we will win – because winners win. First published in the Confidence Club ezine on 19/112010

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