No matter which stage of development your practice business is at, you would have to agree that dentistry is a highly competitive field, and increasingly so. New patient trends – and a saturated market – are questioning conventional wisdom that recites: “The patients will come if you just focus on practicing good clinical dentistry”.
Perhaps the success of Practice Ownership Consulting (POC), Australia’s first dedicated consulting business to help employee and associate dentists explore practice ownership opportunities, presents a cogent statement to the effect.
The consulting firm recently organised a fully booked, two-day event known as Dental Practice Owners Conference 2017 at the Melbourne Crown Promenade. The interstate event regularly attracts a sizeable following, drawn from the firm’s burgeoning membership of more than a thousand dental practice owners, and other interested parties. Similar seminars held in Sydney and Brisbane have been sold out.
“Many dentists work in isolation from their peers. Events like DPOC 2017 offers a unique opportunity for practice owners from all over Australia to meet, interact and talk about ownership issues that affect us all,” says Dr Nauv Kashyap, Founder of Practice Ownership Consulting.
One of the presenters at DPOC 2017, Dr Kashyap gave a talk on “Considerations Of Starting Your Own Second Practice”. Not to be confused with a motivational speaker that only dispenses feel-good advice, Dr Kashyap, himself a dentist, is a hard-nosed businessman whose “street cred” is starting or buying 15 practices and having employed over 200 staff and dentists over the years.
The first practice he bought (in 2008) had an approximate annual turnover of $400K and 2,500 patients in the books. By 2015, he had grown the patient base to 20,000 thereby reaching an annual turnover of $2.5 million. During the same time, Dr Kashyap had bought another 14 dental practices – selling some for profit while maintaining about 8 to 9 locations at any given time.
To the result-driven dental owner, keeping the number of clinics below 10 was a self-checking method of “maintaining sanity while running them profitably”.
“I scaled back (to 8 locations) before the business would require corporate layers of management, which is something I would rather avoid in order to maintain the lifestyle and freedom that I need to do what I’m passionate about.”
Dr Kashyap’s passion lies not in clinical work – these days, he only performs wisdom teeth procedures – but interacting with people through running seminars and consulting new dental start-ups. His favourite topic and area of expertise lies in “marketing and scaling the practice”.
Despite having achieved consistent results, Dr Kashyap does not believe in the formulaic approach as much as tailoring a strategy to maximise the strengths of the practice towards meeting the aspirations and goals of the respective dental owner. When doing so, a well thought out and consistent marketing strategy is usually on his front burner.
“Marketing is a big thing that differentiates dentists. When I analyse the books of a practice that I’m reviewing for purchase, one thing that I look for is their marketing budget on the balance sheet and what they spend it on.
The example he gave was buying a practice about 8 months ago that spent zero dollars on marketing.
“Based on my analysis, I found that there was enormous untapped potential in the marketing area. Now with a solid marketing strategy in place, that same practice is currently making about three times more weekly revenue than what the previous owners had been doing for three straight years prior to the takeover.”
And it’s not just the size of the budget, or lack thereof, but the type of marketing investment that deserves scrutiny, Dr Kashyap clarifies. With more customers locating their services on the Internet, it’s no secret that dental marketing budgets have also migrated online. As the trend persists, and online dental marketing becomes saturated, the attendant skills and strategies have also evolved.
“When I first started, most dental practices did not have websites or did online marketing. It was really easy for me to grow that patient base just by getting the word out with a robust online marketing strategy. Although the online space is getting crowded, and it takes more patience and skill to succeed these days, opportunities still abound.”
The self-taught digital marketer initially turned to Youtube tutorials and Google articles for “DIY on-the-job” marketing training – which included tips on Google Adwords and Facebook Advertising. While the learning curve may be steep for beginners, Dr Kashyap insists the payoff is worth the trouble though he also readily admits that frequent updates and refreshers are necessary in this fast-moving game.
In terms of exercising online marketing budgets, Dr Kashyap shares his experience liberally with seminar attendees.
“I’m very open when it comes to ROI (Return on Investment). I put up screen shots of how much I spend on advertising and the resulting revenue and patient growth I get from such-and-such marketing method. My job as an educator is not to overplay growth or misrepresent figures, but to show clearly what works and what doesn’t.”
What about scaling the practice? If indeed the marketing works and new patients start streaming in, Dr Kashyap has found a great way to tackle the staffing quandary that many dental owners fret over – by getting referrals from existing staff:
“In the present climate where you can find a good supply of dentists, the main concern may be recruiting and retaining auxiliary staff. We were hiring externally until I realised that many of my staff team had friends that they could recommend. The new employees weren’t necessarily dentally trained but as long as they have the right attitude, we have found that it isn’t that difficult to groom new auxiliary staff.”
On the other hand, a common yet under-diagnosed problem of scaling a practice, Dr Kashyap avers, deals with the practice owner’s reluctance in delegating responsibilities.
“Once you’ve created a robust system which serves as a blueprint for a second or third practice, you’ve got to let your practice managers take over and do their jobs – and trust them!
“When people ask how I manage so many practices, I tell them quite honestly that I don’t. I’ve got able practice managers who take care of the day-to-day business. All I do is provide the overall strategic direction – including the marketing strategy – and leave the daily running of the clinics to the respective teams.”
Whether you are setting up a new practice or buying an established one, Dr Kashyap reckons that building the first successful practice – and its follow-up – is the hardest.
“Once you have learned the ropes on ownership and running two practices concurrently, it’s really not that difficult to replicate the successful model and grow it from there.”
The happy husband and father of two attributes his present lifestyle – where he gets to spend quality time with his family and travel on holidays – to what he has harvested from his maiden practice.
“It laid a solid foundation, from which I’ve not only been able to scale up my own business but now also teach others to do likewise.”