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A dentist has turned his knowledge of merger-nomics to launch a business focused on helping practices leverage growth and education to improve efficiency and profitability.
For Ken Tralongo, practicing dentistry wasn’t enough.
Early in Tralongo’s career he found that business networks were instrumental in alleviating many of the burdens he was experiencing. From this realization he knew he needed to establish a centralized system that could potentially mitigate these problems while improving efficiency, cutting cost, and increasing profit.
It started with small mergers in 1993, and progressed three years later when Tralongo sold his three offices to Valley Forge Dental—which eventually sold to Monarch Dental, and is now Bright Smile.
“I saw the evolution of the need to consolidate dentistry back then,” Tralongo explains. “I learned what merger-nomics could do for offices and the efficiencies you could gain on a small scale. I kind of learned from what we did wrong 15, 17 years ago, and as we grow our company we try not to duplicate those same errors.”
Looking at the numbers, it’s clear Tralongo has learned from those errors. He launched Tralongo Management in 2005, and the company now has more than 125 employees and combined revenues of more than $60 million annually. The focus is on creating growth of existing offices through continued education, as well as focusing on practice efficiency to improve profitability.
“It’s very calculated,” Tralongo says. “It’s a formula for me. How much is personal income driven from revenue from dentistry? And how much could you make as a manager owning the offices? There is a point where they’ll flip and you won’t need to practice dentistry anymore to make a living.”
Tralongo hasn’t practiced dentistry in about 10 years, but he does miss the patient interaction. When he was young he wanted to learn a skill that he could perform on patients. Dentistry, he says, was a no-brainer decision.
“It’s an interesting thing, because most people just don’t like going to the dentist,” he says. “So you can give people a positive experience and have fun with it. I always enjoyed practicing, and I miss that aspect of it.”
He tried hanging on, retaining Fridays as his day to practice. But he recalls the turning point came on Friday when he had five people sitting in chairs waiting for him, his computer going, his cell phone going, and he was talking on a land line.
“I thought to myself, this is not only unfair to my patients, it wasn’t fair to me,” he recalls. “It was strictly a time issue.”
Tralongo Management provides dental professionals with effective management and ownership tools in a proven five-step process: Train partners; help them find the right dental practices to acquire; assist in obtaining the appropriate financing; work with them during the transition from old to new ownership; and help maintain operational support throughout to maximize profits.
“We went to dental school and had one practice management person speak to us for two hours one day,” Tralongo says of how little business training dentists receive. “And then they just throw you out there.”
Tralongo points to “a perfect storm” that is brewing in the dental industry. Many practitioners are coming out of school with extremely high debt, and a high percentage of them are women who don’t want to own offices. That opens the door to opportunity to consolidate the industry.
“The dentists coming out of school don’t want to buy the $2 million practice that I want to buy,” he says. “What they want is a place to be autonomous, work in a practice that’s very profitable, that makes money for everybody, and it’s predictable. And that’s what we provide for them.”
Tralongo says it’s a win-win situation because dentists get back a better work-life balance.
“We want to run a good business that has some scalability, and give these dentists their lives back.”
Tralongo says his system employs a team of marketing and finance professionals who scout not only sources of lower cost supplies and labs, but entrepreneurial dentists who want to own multiple offices just as he did.
“We find them; we train them, with my 12-step acquisition process; we go out and find them the right dental offices to purchase; we help them with the finances to purchase; and then we transition the new office to our systems,” he says. “That’s how we’ve achieved our growth.”
Tralongo says there are several key considerations his team keeps in mind when looking at new partnerships. For example, does the dentist fit with Tralongo Management’s goal structure? Can the dentist benefit from the association? And are they a cultural fit.
“We’re looking for people with an entrepreneurial spirit who can think out side the box, and are willing to make changes in offices that have been static for 30 years,” he says. “That leader, that entrepreneurial dentist, has to be the one to set the direction.”
Tralongo may be focused on providing dentists with a better work-life balance, but he doesn’t deprive himself of the same. He describes himself as a huge fan of Steven Covey, an educator and author of several books, the most successful of which is The 7 Habits of Highly Effective People.
“[Covey] calls things important energy,” Tralongo explains. “Define what is important in your life. For me it’s family, it’s my work, it’s my friends. And those are the only things that I work on. If there’s something that comes into my life that doesn’t have to do with what’s important to me, I do not do it.”
That said, even with his busy schedule Tralongo finds he has plenty of time in a day to accomplish what he needs to. That includes going to the gym for two hours every day, and being a certified level-4 USA hockey coach, having coached traveling hockey for more than 12 years. The latter, he says, has brought experiences that have been invaluable.
“I get an email from a player who’s now 20, and I’ve known him since he was 10,” Tralongo says. “The relationships, the friendships, being a mentor to those kids—it’s awesome. I wouldn’t trade it for anything in the world.”
Editor's Note: An earlier version of this article incorrectly stated the company's annual revenue. The correct figure is more than $60 million.