The Business of Dentistry – A Seven Part Series: Part 1

Introduction

GOOD MORNING DR. SMITH, or is it Dr. Smith, CEO? Some time ago you made a choice in life to pursue dentistry. You didn’t just wake up one day in your early 20s and say, “Hey, I’m going to apply to dental school today.” No, long before your 20s you made a choice—a choice to apply yourself intellectually to increase your options in life. You chose to earn high marks and you chose to go to college. You chose your major and possibly a minor. Your life was full of choices and at some point, you chose to go to dental school and pursue the art and science of dentistry.

In dental school, you made the choice to focus on what was important: learning dentistry and passing all of your requirements. Business courses and the fundamentals of how to operate a small business were probably not keeping you awake at night. However, when you became a dentist with all the rights and privileges afforded you, many of you also became the CEO of a small business. This was by choice, yes, but not necessarily the clearest of choices.

What does it mean to be the CEO of a small business? How prepared are you to lead your business? How confident are you that you are operating your business effectively and efficiently?

In corporate America, the ladder to CEO can be steep, but when you arrive you have a single focus: to lead a company and meet the expectations of the stakeholders. Most CEOs start their careers with a core competency in a craft, much like a dentist is an expert in dentistry. But as engineers, accountants, scientists, sales, and marketing professionals ascend the corporate ladder, they are trained on management principles and provided the opportunity to gain experience as leaders. More significant than the man-agement training, however, is the abdi-cation of their respective craft. Business managers are not expected to continue to practice engineering, accounting, or science on a daily basis; they are expected to lead and manage their business. Dentists are not afforded the same luxury. Dentists are expected to lead their business as well as practice dentistry on a daily basis. How can they strike a balance?

CEOs in corporate America also have built-in support networks and accountability partners in their Board of Directors and shareholders. When a CEO wants to grow the business through the introduction of a new product line or by changing the strategic path of a company, a clear plan is created and presented to the board. The support in the form of advice from a diverse, experienced board is pivotal to the process. Equally important is the accountability to resource the plan correctly and measure its success. Where do dentists turn for advice on their business? What if you want to drop an insurance plan, add a hygienist, execute a new marketing strategy, or incorporate new dental technologies into your practice? Where do you turn for advice and support? How do you know if your ideas are the right thing for you and your business? How do you measure success? Who is going to hold you accountable for the execution of your plans?

Why does a CEO create a business plan? What is he or she trying to accomplish? Most often the goal is to grow the business, either top-line revenue or bottom line profit. Business plans are developed as a guidance tool and a reality check. Does the idea make sense? Will it work? What will it take to make it work? What financial benefit can be expected? What intangible benefits can be expected (customer loyalty, increased brand awareness, increased competitive advantage). Business plans are created to minimize risk and communicate throughout the organization what, why, and how a project will get done, and what resources are required to ensure success.

So what do you want to do? Do you want to grow your dental business? Do you want to grow production, net income, or both? How are you going to do it? What resources and expertise will you need? How long will it take? Who will be involved? How will you know if you have been successful? How can you minimize risk and maximize reward? You need to write it down. You need a strategy and a business plan.

Contemporary Esthetics has put together a team of experts to author a series of articles entitled “Fifth Year Dental School: The Business of Dentistry.” This collaborative team of authors consists of a dentist, a practice management consulting firm, and a strategic marketing consulting firm. The goal of this series is to create awareness of how CEOs are trained to think in the business world. We want you to walk away with a better under-standing of how fundamental business principles can help you become a better business owner.

The art of business strategy is built on the foundation of fundamental business principles and culminates in the development of a business plan. There is a linear progression to developing a business strategy that is as follows:

• Vision and Mission
• Positioning
• Segmentation
• Staffing
• Systems
• Measurement

Look for Part 2, Coming Soon: Vision and Mission!