The thoughtful private practitioner who recognises a need for improvement in their practice (and isn’t that all of us?) will want to put their efforts where the best results can be gained. We need some leverage.
80% percent of our problems come from 20% of our practice (applying the Pareto principle or the 80:20 rule) - so let’s look at two important blocks of ten percent and leave the other eighty for another time!
The first ten percent is keeping production in the practice to the point that it consistently meets the financial needs of the proprietor. This is the income side of the equation. You might save a small percentage here and there on costs, but the income side is the most effective lever. No one likes having month left over at the end of their money.
The other ten percent that will give the best return on your effort, is human resources - managing and retaining human capital. How many times do we as dentists say “I like the work- it’s just the management (read staff) issues that I can’t handle”. These staff issues are very expensive in time, money, and emotion.
Air travel analogies are often used in management, because the margins can be so fine. It can be useful to think of your daily practice as a 737 flight booked to fly from 8am to 5pm. The passengers (patients) on the flight all have to pay for the flight (practice) so that at the gate (when the practice closes), all costs have been met and there is a return on investment. Now, some passengers will pay more, and some will pay less, but the whole mix of fares (fees) means that in each flight (practice day) the financial goals are achieved. Recognising this financial reality can be a great start. Some passengers will fly for free, and some will be full fare, and some will be discount economy - and that’s fine.
The trouble is some of us are giving too many discount economy and frequent flyer redemptions and not enough full fares. The flight is still made, but eventually there won’t be enough to pay the fuel bill (school fees, a mortgage or a deserved holiday). This concept can be used very effectively in dental practice with a simple Yield Management System. In essence, you will know what fees you will receive before the flight taxis out. And that is a good feeling.
People management and retention
Much of what is written about Human Resources is directed at the issue in a reactive sense. Staff retention and ease of management are linked not principally to money and benefits, but mainly values and communication. Forget about profit sharing - money is not the prime motivator for staff retention. We are better off employing people who value what we do and will work with our existing teams (Some of this is counter intuitive - dentists may need to employ people who are not like them in some ways - the practice should ideally have a mix of personalities). Then we need to communicate with all of them on a regular cycle. Choose the right staff, and then have a system to retain them. The solution is in the beginning - apply the lever in the selection of staff and then a consistent people management system that is simple enough to use.