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Today, numerous dentists are still asking the big question, “What does it really take to have a highly successful dental practice in this new economy?” Recently I interviewed Eric Nuss, Director of the Henry Schein Business Dental Institute, to learn more about the Institute and what it offers to dentists. You can read Part 1 of the interview here.
Today, numerous dentists are still asking the big question, “What does it really take to have a highly successful dental practice in this new economy?” Recently I interviewed Eric Nuss, Director of the Henry Schein Dental Business Institute, to learn more about the Institute and what it offers to dentists.
You can read Part 1 of the interview to learn more about the Dental Business Institute's program here.
Most dentists have zero inclination to become good business people because of the lack of business education in the dental schools. How successful have you been in making significant changes in the business of dental practices?
So far, and in a very short period of time, we have had a handful of participating practices that have actually made practice acquisitions. I believe that speaks volumes about our curriculum and approach to helping our dentists think about growth. Four of our participants in the first class bought additional locations between the first and second session of the four sessions that we teach.
Clinically dentists are superstars, but administratively they have no idea where to begin.
That’s right. I have spoken several times at several universities, and have asked by show of hands, “How many of you are interested in running a business, a dental practice, and owning it in the next three to five years?” There are no hands. And I don’t know if it’s the way I am asking the question or if they are working on their clinicals or what they are doing, but they were not raising their hands.
What is the greatest frustration you think plagues solo practitioners today?
The single practitioner has staff that is supposed to be helping with marketing and insurance management and HR, etc. But who is actually doing the HR, the marketing and all these different pieces and different parts within that practice? Practitioners often realize they are the ones doing it.
Dr. Howard Farran mentions in his book on business that the three most important factors are time, money and people. Does this mean that with what you are taking on board now, you could be taking time away from the chair?
Yes, but I want to answer that with two parts. The first part is that we are teaching the doctor how to forecast. Forecasting as a concept in business that is very common, but for dental practice creating forecasts is difficult. That means you have to identify how many patients you are going to have in the practice, patient value in revenue and overall overhead projection.
This is important so that practitioners can figure out where they need to reinvest money back into the practice to either replace production or create a bigger machine to create the revenue that they want. The second part is that we are working on building another class that is specific for office managers. The Business Institute is meant for owner/doctors. The next class will be office manager institute or something along those lines.
Continue to page two to learn more about the Business Institute.
So, tackling some of these areas that often bog dentists down, how do you approach and cover metrics and numbers and compensation plans in the dental practice?
The metrics and numbers in the practice are so important that we cover this in every one of our sessions. In the planning session, we talk about the practice goal, whether that is revenue or patients or locations or income or a sale price. Let’s work backwards from there. That is not my number to determine. It’s their plan, so we start there. We guide them down a path of understanding, not only forecasting but also modeling a financial decision. At what point does it make sense to pull the trigger, or to make the investment, or to digress or sell or buy, or whatever the decision ends up being? When we are planning, we really focus on weight points, financial projections and trajectory.
We talk about compensation plans in our leadership and HR class. We cover compensation quite extensively in regards to compensation for doctors, hygienists and office management staff. We talk about not only how to set that up but how to model it, because in this environment we are trying to teach duplicity: If I am going to do this one time and it works, why would I not do this over and over and over? If that’s your goal, how do we create duplicity?
The second part to this is we show them how to evaluate if the compensation plan is actually motivating. We teach them to create a compensation plan that generates income. If I am paying the employee $100,000, but the production is less than overhead and comp, is that a good deal or a bad deal for the owner? Clearly it’s a bad deal, unless there’s a secondary benefit, called good will, for that person being a part of the practice. It’s important to understand if your comp plan is out of alignment with production. Again though, it’s not us necessarily saying, “OK, here’s the number.” We get asked that a lot-what’s the number? What percentage of expenses should your payroll be? The number has to work in your system. Because if I say the number is 30 percent, but your operating overhead is 78 percent versus 60 percent, I can’t give you 30 percent, because it doesn’t work. If I am giving you 30 percent, I got 10 percent left on 60 percent. I am “in the hole” at 78 percent.
In terms of expanding, what factors do you think come into play when you purchase a practice?
I am buying a business that has an existing cash flow. I am investing in something that is going to have, hopefully if things are done correctly, repeat income in that practice. And if I build a practice from scratch, I better be going in with the right intentions, and that likely is because I have exhausted my capacity of the original location.
So the weigh point for expanding from scratch starts with a discussion about capacity. The weigh point in buying a new location is not just whether or not the deal make sense. I think a lot of doctors get lost in this metrics. Is it a good deal or is it not a good deal? It’s a good deal if culturally there’s alignment, and it’s a good deal if there are patients in the practice that will continue to be in the practice. The most important number in the entire set up is the number of patients in the practice.
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These are all very important topics. Why didn’t you attempt to educate the dentist over the Internet? It might have been better, faster, smarter, more efficient and less expensive.
The reason why we did not do an web-based program is that you cannot have the experience of group work. You cannot have that experience of “I’m in a new environment.” You cannot have that experience of role-play and simulation. You can’t have that emotional connection of walking into a space that you aren’t sure how to navigate. The Henry Schein Dental Business Institute is unique in the sense that it is an experiential learning environment.
If this was just lecture, absolutely this could be web-based. Because this is activity-based, and because it provides building blocks of concepts that need to be reinforced with engagement, there’s no way to be able to check for understanding and bear witness to the growth and development that tells me we have been successful.
What is the top benefit of making the Institute a brick-and-mortar program (rather than online) to help educate dentists about business?
We are in Orlando right now, where Walt Disney’s home base is. When you go to a place like Disney, they create an amazing experience from the moment you start thinking about planning a vacation to when they swipe your wristband to walk into the park. The new rides and new this and that, and the concept of that amazing experience that they have, is really at the core of this. I really believe that we have created an amazing experience for our doctors. We don’t have to market, because they tell everybody they know about it.
So word of mouth is pretty important for you?
Word of mouth is truly huge for us. When doctors enroll, we have an interview. I interview the participant to get to know them, understand their goals and their vision, and to let them know what they are walking into. I ask them goofy questions like who is your favorite superhero? If you could have a super power what would it be?
All these questions are with purpose. I also ask them what their favorite snack is, because it’s important. If they are going to be in a foreign environment, I want them to have some creature comforts. When they arrive at the hotel, there’s a special gift bag customized for them. Nobody’s gift bag is the same. It’s based on what I have collected in that interview. That means something when they leave; having that personal experience is most important.
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I understand that you do a webinar in between each session. What is the value of doing so?
Once everyone returns home between each session, we do one-on-one advisory calls, and also do a webinar to reinforce the material and prepare them for the content of the next class. In between the first class and second class we are going to have a webinar for the community. We record it, and then we send them a link to that class. That webinar is usually an hour to an hour and a half, and then we do a one-on-one advisory call that is usually about an hour.
On those one-on-one advisory calls, I always tell the doctor to include the office manager, assistant or associate, if they feel it would be appropriate. This is the opportunity where you don’t have to bring your entire team to the Institute to reinforce content. You, as the leader, should go back to the practice reinforcing what you learned in this class, and teaching your team about what you picked up and how you are going to implement things. Then when we have our one-on-one call, it isn’t just one-on-one-it’s also for your team. So if you want to bring all those other folks into the conversation, you absolutely can.
What is your take on consultants as educators providing business education?
Here’s my take on consulting in general: We work with several consultants who are the best of the best and advise people to work with them. Generally speaking, consultants have a philosophy of doing business or practice management in general and then they teach people how to aspire to that philosophy. They motivate people with carrots and sticks along the way, whether or not they are adhering to that philosophy. At the end of the philosophy, of the practice management concepts, in many instances, that’s where it stops. With our education, what we are trying to do is give them a very meaningful and real reference tool.
What has brought you the greatest satisfaction with the Institute?
Knowing that doctors are applying the information in their practices and seeing their practices grow. What’s really important from where I stand is that this is not a cookie-cutter plan. I think the Institute has allowed people to cast their vision and put together a plan that can be tested, vetted and reviewed, allowing them to be able to actually carry it forward.
If we were sitting here in a year celebrating what a great year has been for the Dental Business Institute, would you say were the biggest successes or things that contributed to the Institute’s success?
I will measure our success by the success of our students. Another factor of success would be that our future classes continue to be full and there is a demand. Our marketing efforts are diminished because of the positive word of mouth, and we’re seeing that right now.
This has been a team effort. This is definitely not a one-man program. We have a lot of contributors that are bringing a lot of expertise into this program. But orchestrating that and pulling it off was and is not an easy task.
The Dental Business Institute supports the overall mission of Henry Schein. We believe that we make an impact on the lives of those we touch because we focus on practice care so our customers can focus on patient care.
About Eric Nuss
Eric Nuss leads the Business Solutions Department at Henry Schein Dental. He developed and leads an educational program for dentists, the Dental Business Institute, for the entrepreneurial dentist. Eric has a degree in Education and an MBA in Business, in addition to almost 15 years of industry experience in leadership, sales and education. Prior to his current position, he was the regional manager with sales and operations responsibility in Iowa, Nebraska and South Dakota.
About Dr. Hugh Doherty
Dr. Hugh Doherty is a Certified Financial Planner, national speaker, author and business and financial coach to the dental profession. He is the founder and CEO of Business of Dental Practice LLC, a company dedicated to coaching only dentists to develop and implement cutting edge business strategies. His varied background in the field of dentistry, years of research and study at Harvard University Graduate School of Business and the College of Financial Planning, make him uniquely qualified to educate in all aspects of the business and financial world. He can be contacted by email at firstname.lastname@example.org.