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Think Bigger As a Business Owner by Jay Geier

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Categories: Practice Management, HR and Accounting;
Think Bigger As an Business Owner 

by Jay Geier

One of my favorite mantras is, “You don’t know what you don’t know.” This is especially apparent when I ask owners of small, independent dental practices why they choose not to grow their businesses. The same few misconceptions and perceived barriers tend to keep these owners from thinking bigger and being open-minded about the actual facts of smaller versus larger practices. By limiting the size of their business, they limit their profit potential, which creates a host of issues and risks that go along with a stagnant practice.

If you have a small practice and think big is bad, read this article with an open mind. Consider the possibility you don’t know what you don’t know and how this information might help you make better decisions about your business and future.

Misconceptions about a smaller vs. larger practice

The most common reasons I hear for not wanting to grow a small practice have to do with the two biggest dysfunctions of any small business—money and people.


 “I can’t afford to grow bigger.”
A growth strategy that costs you money in the long term is an oxymoron. The very definition of a growth strategy is that you realize a net positive return on your investment— directly or indirectly, immediate to short term or mid to long term.

This reason (or excuse) reveals that small-practice owners tend not to think like business owners. If your perspective is that of a clinician and is very short term, your primary concern is paying this month’s bills, at the office and at home. Maybe you look ahead to the end of the quarter or fiscal year, but it’s unlikely you have long-term business goals and strategies. If you did, these would include projecting rising expenses against when revenue will stagnate because of maxed-out capacity and you would realize you can’t afford to omit a growth plan to increase capacity at some point.

Dentists tend to be risk-averse, but as a business owner, you need to constantly make informed decisions that weigh risk against potential payback. Do the math to persuade yourself that proven, properly executed strategic investments are virtually guaranteed to generate additional revenue and growth but come with minimal risk. The best examples are additional treatment rooms, team training, development that attracts new patients and increases referrals, and additional producers such as hygienists and associates.


“I don’t need to grow bigger.”
The typical life cycle of any business is that it will grow, perhaps slowly at first but then gain momentum and experience a growth spurt. The misconception is that steady growth will continue without doing anything different. It won’t. An absolute certainty is that, at some point, you will max out your capacity. Rising costs will continue to eat into your profit margin, so the business will do worse than stagnate— it will inevitably decline. In other words, you can’t maintain the status quo indefinitely; you either grow or decline.

Along the way, small businesses have the smallest margins and are therefore at higher risk. You have less room to maneuver and weather economic changes, staff losses, competition, road construction, you name it. This makes you especially appetizing prey for dental support organizations (DSOs) that offer to buy troubled practices for pennies on the dollar.

Most doctors start or buy their practices when they are in their 30s, and these doctors are often still practicing in their 60s. Fifty-four is the average age when practice expenses are at their highest. If you’ve remained a small practice for 20 years, you’ve likely been stagnant for quite some time and have long experienced financial stress at the office and home. If you do nothing differently to grow over the next 10 years, you’ll ultimately retire having never provided for your family how you envisioned when you graduated from dental school. Moreover, the practice will be worth far less than it should be when you retire, further affecting your lifestyle.


“I don’t want to grow bigger.”
When I drill down on these conversations, the same few underlying misconceptions always surface. Most doctors say it’s hard enough running a small practice and managing a small staff, and they’re convinced a larger one would be much harder and more time-consuming. Or they love the clinical aspects and don’t want to spend even more time managing a larger office.

If you think managing people and overseeing operations is a pain in the neck—a necessary evil of owning a practice when all you want to do is treat patients—you’re doing something wrong. Fortunately, it’s entirely under your control. When you decided to become a business owner, you took on the responsibility of ensuring your people are trained and developed to perform as you need and expect. If they aren’t, it’s up to you to fix it. Well-trained individuals taught to work together as a high-performing team don’t cause problems; they solve them. They take responsibility for helping to ensure quality of care and delivering a great patient experience so it’s not just your job. They make your life easier rather than harder while making your practice more profitable.

Contrary to what you might think, a small office has more people challenges than a larger one. In a small office, everyone is on a treadmill with too much to do, including some things they’re not so good at. Even if your people are efficient, you have so few bodies to cover all the bases, with no backup, cross-training or flexibility. You can’t specialize and optimize individual talents for maximum productivity. By default, you get mired in too much of the day-to-day minutia. And if all your people aren’t strong, one bad performer who represents a major component of the team could negatively affect the entire practice.

About the only reason we put the brakes on a client wanting to grow their practice is when we see how poorly their current team is performing. We first work with the doctor to develop into a better leader who can set goals, expectations and accountabilities. Then we provide the team with necessary training, systems and processes so they’re equipped to perform at a higher level. Only then do we move ahead with growth strategies everyone is prepared to execute well.


“Two small offices are better than one larger office.”
Small-practice owners who expand by opening a second small office may do so because it was their only option at the time. However, more often, it’s because they’re still blinded by the “big is bad” mindset and choose not to buy or build out a larger office. It is often too late when they discover that two smaller offices result in unnecessary duplication in overhead and expenses, additional time and effort managing two staffs instead of developing one high-performing larger team, more complicated communication and additional time spent commuting. Instead of gaining economies of scale and the synergy, energy and flexibility of a larger team that would drive profitability, they often achieve just the opposite.


“I tried growing, but it didn’t work.”
If you took steps to grow and you’re still a small practice, you likely didn’t properly execute effective growth strategies; otherwise, you would have grown. Regain confidence in your ability to build your business by admitting you need coaching about what to do and how to do it. Every problem has already been solved; there is nothing unique about your situation, town, location or team that others haven’t already overcome or turned into an advantage. Stay open to the process of learning from others who have done it successfully and know how to leverage their teams as part of the growth process.


Learn what you don’t know
Overcoming perceived barriers starts with opening your mind to new possibilities and talking to successful practice owners who used to think like you do but now know better. Instead of networking with colleagues who own small practices, join communities of larger practice owners who know firsthand what you don’t. Learn from those willing to provide you with honest feedback on the advantages and disadvantages of smaller versus bigger and people who are willing to share ideas and advice and discuss what did and didn’t work. Attend seminars and workshops, listen to podcasts and get the kind of business and leadership coaching that can be lacking in dental school.

Early in your career, there’s a good chance you were advised by someone that you could never open or buy your own practice. You did it anyway. Rejuvenate that passion from when you were a dental student by becoming a lifelong student who is open to new perspectives. Regain your drive and courage to keep going in a positive direction, and stop limiting your growth and profit potential by limiting your size based on misconceptions. At least grow to a medium-sized business instead of allowing your small practice to inevitably stagnate or be crushed by risk factors that larger practices can better handle. Protect your business, financial and mental well-being, and family’s long-term future with a bigger vision.

Give yourself a fighting chance at greater success and satisfaction by learning what you don’t know from others who got over their misconceptions and barriers to grow their small practices successfully, just as you need to do. With that success will come greater understanding of the benefits of being larger and the confidence to keep growing when you’re ready to take yet another step.

Author Bio
Author Jay Geier is an authority on growing independent practices. His passion is turning practices into businesses, doctors into CEOs, and employees into high-performing individuals and teams. Geier is the founder and CEO of Scheduling Institute, a firm that specializes in training and development and coaching doctors on how to transform a private practice into a thriving business. Subscribe to his Private Practice Playbook podcast at podcastfordoctors.com/dtown.
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