Category Archives: Advice from Artin

Buying a Practice is an Investment

When you’re ready to own your own practice, there’s two options you may be considering; building a new practice or buying an existing one. Let’s focus on things to review for the potential purchase of an existing practice.

Client Base

One of the main lures to obtaining an existing practice isto also obtain the existing client base. Study this practice’s patient records carefully – over the last five years has the number of patients increased, decreased, or stayed relatively the same? What percentage of the patients has demonstrated practice loyalty by consistently returning to the practice? What is the age demographic of the patients? 

Dental Equipment

Enlist a dental equipment service professional to perform an audit on the existing dental equipment. The service professional should be able to tell you how old the equipment is, whether or not any manufacturer warranties are still valid, whether or not regular preventative maintenance has been performed, and estimate how long the equipment is expected to last. With technology becoming a large component of dental treatment, a piece of equipment only five years old can be a dinosaur. Gathering this information will allow you to budget for expected replacement and maintenance costs, if necessary.

Floor Plan, Design& Workflow

Walk through the office multiple times, on multiple occasions. Is the floor plan conducive to you personal workflow? This can be the most important part of buying an existing process, as it is not inexpensive to drastically alter the practice workflow. Take note of the design and décor. Replacing artwork, light fixtures, furniture, paint and flooring can be a cost effective way to update the office. If you notice water stains, sloping floors, broken cabinetry or cracks in the walls, these can be indicative of costly repairs and updates. Take advantage of a building study performed by a reputable construction company.

Cost

Be wary of practices that are listed for low sale prices – it could be because it’s not generating enough revenue to stay in business, or just that the doctor is eager to retire. If the practice is doing well, you maybe asked to pay a premium price, for the convenience of having everything setup. Add to the purchase price any equipment that needs to replaced, and any updates that need to be made to the physical office. Compare this total cost to the cost of building a new practice, and ask yourself if the difference is worth purchasing the client base.

Don’t hesitate to contact industry professionals along the way – many evaluative services are often free of charge, and don’t require any commitment.

 

Don’t Skip the Open House | Advice from Artin

A practice’s Open House is a momentous event in the company’s history. Whether you’ve remodeled your practice, opened a new location or you’re beginning a brand new practice, you won’t want to skip hosting an Open House! Having an open house provides an opportunity for potential patients to interact with you and your staff in a carefree setting and conceivably expand and strengthen your patient base. For those with an established patient base, an Open House serves to bring patients, friends, family and colleagues together to celebrate a revitalization of your practice, and affirm your appreciation of their continuing support. An Open House can be as simple or as elaborate as you would like, but there are general guidelines you can follow to simplify the process.

Inviting Guests and Targeting an Audience

Once you’ve figured out what you hope to achieve by having an Open House, you should have a general idea of what your invitee list will look like. If you decide to use this as a marketing opportunity your target audience should be your local community, existing and prospective patients, and your industry network contacts. If you’re less concerned about gathering a patient base, reach out to friends, family and colleagues to join you in celebration. Feel free to include your patients as well!

Immediate Gratification or Delayed Satisfaction

Choosing a date for your Open House is a topic more subjective than the others discussed here; take the following questions into consideration before setting your timeline:

  -Has your office been up and running successfully for at least two months?

  -Is your office design completed, including staged with decor the way you had envisioned?

  -Is your team acclimated and familiar enough with the new office to conduct tours and answer questions?

What time of year is it? (In winter, some people will be away for the holidays which would make this time of year less ideal for an appreciation-type event; in summer, many families go away on vacation which would make this time of year less ideal for kid-centered events. Generally, September and October are favorable months to host events.)

Are you financially ready? If you’re low on funds after your build-out, don’t rush into hosting an Open House just for the sake of having one. I would say 6-8 months out would be ideal, but really, anytime within the first year of opening, works as well.

 

Spreading the Word

Consider who’s attention you are trying to capture- existing associates or new patients. If you’re hosting an appreciation Open House including mainly close friends and family, a great option would be to send out Evites and avoid social media. Minted is a great resource with great free templates and an invitee tracker so you know who has received your invite, and whether or not they plan on attending. If you decide to use your open house as a network and advertising opportunity, there are a few affordable things you can do to spread the word:

  -Make flyers to hand or mail out, and post on local bulletin boards.

  -Make a PDF version of your flyer, and have your marketing manager e-blast it to your network and contacts.

  -Reach out to your local Chamber of Commerce and your county’s Economic Development sector. Ask them if they can post an announcement on their digital and print platforms, conduct a ribbon cutting ceremony, and/or put together a press release.

  -Don’t neglect your social media channels! These are always great free and cheap resources.

 

Host a Great Event, without Breaking the Bank

One way to mitigate costs is to partner with neighboring businesses who can use the opportunity to cross-promote their business by sponsoring your event. Not only are you strengthening your relationships and building your network, but you will also cut costs in the process.

Evaluate Your Supply Costs

Keeping supply costs down is a struggle to which almost all dentists can relate; with that in mind, we’ve developed a few methods that can help you make your ordering process more manageable.

Start by preparing a list of your most commonly ordered supply items, which can be obtained from prior invoices or statements from your vendors. Many suppliers should be able to furnish you with an annual report, if requested. Once you obtain your spending reports, you will be able to determine your purchasing frequency; determine if you are you purchasing supplies for the month or only on an as-needed basis. We’ve found that you will get better pricing when you purchase supplies in bulk at regular intervals, whether it be monthly or quarterly, versus purchasing small quantities weekly or as needed (if your office does not have suitable space to stock bulk supply quantities, consider having your floor plan analyzed to see if room can be made). Typically, there are shipping charges attached to the overall cost, so by controlling how often you order, you can instantly reduce that extra cost.

Once your list of regular supply items and their average quantities is prepared, share it with your major supply representatives and let them propose their best pricing based on your monthly / quarterly / annual quantities. 

If you find your supply costs are incredulously high, you may have an issue in terms of waste / loss management within your practice. Looking into specific types of practice management techniques may be able to help reduce the amount of waste or loss your practice experiences. For example, a gallon of bond wasted over a period of time can cost your practice in excess of $40,000- that’s one of the most expensive liquids in the world! This is a go-to example you can use, when expressing the importance of conserving materials to your staff.

With this cost management under your belt, it really becomes a matter of trusting your supply company and considering alternative or house-brand products to get the job done!

 

Invest in Preventative Maintenance

Much like Benjamin Franklin’s common axiom, “an ounce of prevention is worth a pound of cure”, regular preventative maintenance performed on your dental equipment will save you disruption and expense in the future. Some maintenance is simple and can be completed by office staff, while others may require professional technical attention. Have your service professionals create and maintain a complete list of your office equipment including the make, model, and serial number of every item so you can keep track of the maintenance performed.

 

The major workhorses of your office can be costly to replace, so pay special attention to the maintenance needs of your vacuum and air compressor. Your vacuum will need periodic changes of collection canister screens, and the compressor micron filter should be replaced at least once a year. Compressors also require oil changes, air inlet filter replacements, and condensation drainage from within the tank. It’s common knowledge that if a compressor shuts down, so too does the office – so don’t overlook these steps.

Jump Start Compliance

As of December 15, 2016, the Environmental Protection Agency has established new guidelines to moderate and reduce the amount of mercury being emptied into public water treatment centers. For dental offices, the main source of mercury discharge in these public centers, this means installing or updating amalgam separators to trap the mercury present in dental amalgam fillings before being released into the waste system. Once the mercury is separated, it can then be recycled. Amalgam separators are an affordable solution to this problem, and can usually be installed within a few hours.

Regulations and Requirements
According to the EPA’s Fact Sheet on Effluent Limitations Guidelines and Standards, “dental offices that place or remove amalgam must operate and maintain an amalgam separator and must not discharge scrap amalgam or use certain kinds of line cleaners.” Compliance is expected from new dental offices within thirty days of the rule going into effect, while existing offices will have until 2019 to comply. Both existing and new offices will be required to submit a compliance report to the EPA, documenting that they have met the new regulations.
 
Exempt and Non-exempt Practices
In addition to new and existing offices, dental clinics and dental schools are also expected to comply with the new regulations. Dentists practicing in mobile units, or in the fields of orthodontics, prosthodontics, periodontics, and oral and maxillofacial surgery are exempt, as well as those who only deal with amalgam in unplanned emergency removal situations.

 

Foradditional information, refer to the EPA’s website.

Get Your Office Noticed Online

Aside from providing exemplary dental care and customer service, a successful dental practice must also make patients feel comfortable and confident. One element that is essential to establishing confidence in your practice is a strong website, which will most likely be a potential new patient’s first impression of your office and staff. Using original photography on your website can set you apart from the competition!

 
Why Photography is Important for Dental Offices
Company websites are becoming increasingly important in determining the choices consumers make. Website visitors often decide whether a website interests them in a matter of seconds- the need the grab the visitors’ attention is great. Although having good SEO will drive traffic to your website, you need something to keep them there, and personal photos can do just that. Show off your modern facilities, your tranquil atmosphere or your creative accents! Take your potential patients through a virtual tour of your office- from the exterior, to reception, to treatment rooms.
 
Include Office and Staff Photos
Hiring a professional photographer to take photos of your office and staff can make patients feel more confident when coming into your office because it gives them a sense that they’ve already been there, and already know you. Be sure to include staff photos, or staff interacting with patients, to give potential new patients a sense for the welcoming atmosphere of your office. 

Ask Questions, Before Hiring a Consultant

“Consultant” is often a misnomer for “referral source,” although both share common characteristics. To clarify, a referral source relays contact information for industry players, while a consultant should ultimately investigate and evaluate these players to determine which expert would be most useful and appropriate for you, and save you money overall.

 
Are you hiring a consultant for the right reason?
Hiring a consultant to manage your practice development is comparable to hiring a general contractor to manage a large construction project. Using this metaphor, you would need to hire a general contractor if you need a house built, but not if you needed plumbing work done- then you would want to hire a plumber directly. If you need specialized assistance in one or two areas, such as marketing or accounting, you should contact these experts directly. If you seek assistance for the entirety of the project, then you may consider hiring a consultant. Hiring a good consultant, for the right reasons, should result in savings in your pocket.
 
Is your consultant going to save you money?
Consultants have several money-saving methods with which they can provide you. Some consultants can offer you their primary services (if they are also an accountant, contractor, marketer, etc.) for a discounted price. Consultants can speed the duration of your project through industry and market knowledge. Consultants can also identify key industry specialists to direct you to, when greater specification is required. To evaluate the range of connections a particular consultant may have, ask them:
  • How many people do you consider before referring a particular source?
  • How do you select with which people to work? By knowing a wide array of people through your connections, or obtaining bids and estimations?
  • How do you evaluate the pluses and minuses of each source to determine which benefits my particular project?

Whichever method or methods your consultant is going to use, ensure that the cost savings will be well worth the consultation fee for which they ask.

 
What is your consultant bringing to the table?
Consultants should have industry expertise across all areas concerning developing a dental practice- from marketing to accounting to construction. Consultants should have a record of successful project completion; don’t hesitate to ask questions of any consultant which you are considering. Any true consultant should be able to answer, to your satisfaction:
  • On how many projects have you consulted?
  • In these projects, what went wrong and what went smoothly- what were the highlights?
  • Where were the projects- local or national?
  • How did you manage the process to eliminate mistakes?
Your consultant should be the essence of neutrality and your representation within the industry, with the best outcome for you in mind.

Take Advantage of Tax Incentives

The Protecting Americans from Tax Hikes (PATH) Act of 2015 provides guidelines for practicing dentists looking to take advantage of tax incentives.

Section 179
Section 179 of the PATH Act applies to dentists looking to build out a new office or make improvements to an existing property held through a lease. This section also details guidelines for writing off purchased dental equipment and technology. The incentive offered for these upgrades and improvements is an allowance for deductions up to $500,000 within a given calendar year. New equipment purchases are capped at $2,000,000 for 2016.
 
Fourth Quarter Action
We’re at the beginning of the fourth quarter, and it’s definitely not too late to take advantage of these incentives for 2016! Capital equipment purchases are a great way to stay current with new dental technology and equipment, and also a great way to offer your patients top-of-the line imagery and comfort. Smart office remodels are proven to show an increase in patient acquisition and allow you to stay competitive in your field and practice area.
 
Consult with an Accountant
Tax incentives come with restrictions and limitations, so it’s important to undergo an in-depth consultation with a qualified accountant to determine what fits best for your practice. Learn more at the dedicated Section 179 website or from the IRS.

Advice from Artin: Relocating Your Practice

If your current lease is about to expire, you may be thinking about relocating your practice. The determination of whether it’s better to renew your existing lease, or sign a new lease should be made prior to one year before your current lease expires. Reasons that may influence your decision to move are the unavailability of lease renewal, the functionality of your current square footage, or the visibility of your current location. If you decide that relocating your practice is the best option, be sure to start the relocation process at least one year before your lease expires. You may think one year is a bit extreme, but many factors affect the success of a practice relocation.

 

Lease Negotiation

Before beginning the search for a new space, consider whether re-negotiating your lease would be feasible. In this matter, carefully consider what you hope the practice will become in the future, and how you anticipate practice growth including the potential addition of associate dentists. If you think that renewal may be a viable path, start a conversation with your realtor and existing landlord to discuss your lease terms and options. Building ownership and opportunities can fluctuate, even in the last two months of your lease, so if you think you might want to stay in your current location, safeguard that option a year ahead of time!

Searching and then negotiating a lease for a new property takes, on average, 3 to 5 months. It may take more or less time depending on your area, and the availability of leasable space.

 

Building and Space Evaluation

There are four main types of commercial buildings commonly available for dentists; Class A Office Buildings, Multi-Family Buildings (with retail on the ground level), Town Centers (with offices over retail), and Traditional Retail Centers. Each type has their own unique positive attributes and negative aspects, including visibility and accessibility variations. Regardless of which type you are considering moving in to, if you want to maintain your current client base your new location should be no more than 5 miles away from your original one.

Gauging the size of a space merely by square-footage usually isn’t the best way to determine what size space best suits your needs. Test-fits should be utilized in this process; test-fits are preliminary floor plans drawn by designers and architects, as a way of calculating how many operatories and offices can fit into any given space. Your current space may be large enough for your practice, but you may not realize it if the space isn’t maximized.

 

Planning A Remodel

After you’ve selected a potential new office location, get an experienced designer or architect involved to check out the space- before you sign a lease! The designer/architect can not only complete a test-fit for you, but can also perform code evaluations, assemble budget costs, and create a preliminary design. Ensure that your chosen designer is a proven expert in the dental industry who can maximize the coverage of your budget and share with you the knowledge that comes only with experience.

The design and permit process alone can take 2-4 months to complete, depending on county permitting processes. Once your county has approved all the necessary permits, construction begins; it typically takes 3 months to fully construct an office.

Remodeling an office should be an efficient process, especially when you’re relocating and practice shut down time needs to be minimized. Before signing a construction contract, be sure you understand exactly how much shut down time is estimated, and ask for ways in which it can be eliminated.

 

Equipment Assessment

If your equipment is still in good condition, it’s a possibility that you could move it to your new location, should you want to. Bulky older equipment can make an operatory feel crowded; if you just need a little extra space, but aren’t ready for a full relocation, sometimes purchasing modern and streamlined equipment will do the job. Experienced auction companies and similar companies are available to buy or sell your old equipment, giving you value for it and making newer equipment more affordable.

 

If you’re pro-active with your relocation, you can be in your new office with time left on your old lease- then you’re able exploit that time by using it to redirect patient traffic to your new location!

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