In 1980, when I was a freshman at Creighton University, one of our professors told us we’d earn 10 extra credit points if we went to see Warren Buffett speak when he visited our campus. One of the clearest things I remember Buffett say to the crowd was when someone pitches him an idea for something in which they wanted him to invest, he would hand that person a 4×6 recipe card and a No. 2 pencil and ask them to explain their entire idea on the card. He said 90 percent of those people couldn’t do it.

This doesn’t just apply to investing, gang – this applies to dentistry! Dental manufacturers will call my practice and try to sell their products to us. We’ll tell them, “For a product to be successful, it has to meet four criteria; it has to be faster, easier, higher in quality and lower in cost.” Many of them can’t explain their products to me with those four simple criteria in mind. In fact a few weeks ago, just out of morbid curiosity, I listened to someone pitch an idea for one hour and 45 minutes. Even after all the time my team and I spent with the salesman we still had no idea what the value proposition was. It blew my mind! It doesn’t just stop at dental manufacturers, though – this also applies to treatment plans. If you can’t explain to your patients what they need on a 4×6 index card, you fail at presenting treatments. Period.

Effectively presenting a treatment plan to your patients is one of the most serious aspects of dentistry. It can be the difference between a dentist who treats one-third of the caries in his or her practice to a dentist who treats twothirds or better. In the best dental practices, treatment plan presentations are typically done by a staff member; someone who can speak your patients’ language and sell the necessary dentistry. In other practices, what you often see are dentists rambling on, trying to explain what’s going on in their patients’ mouths. The patient has a toothache and the dentist says, “You have irreversible pulpitis. You’ll need endodontic therapy, post build-up and a fullcoverage restoration.” And then the dentist opens up a computer program and jumps into a giant, in-depth, scientific lecture about what a root canal is, what it does, what can go wrong, etc. Forty-five minutes later, the dentist asks, “Any questions?” and the patient looks like she got run over by a truck with no real comprehension of what just occurred.

The best treatment plans are simple and explained in ways patients can understand them. The reason Christianity thrived was because the religion was recited in short, simple, understandable parables – and there was a point to each one of them! Stop complicating things and get someone on your team to explain treatment plans to your patients in the simplest terms.

Your treatment plan also needs to be interactive. You need to follow your patients’ cues. When you talk to someone and they break eye contact with you, it means their mind is processing. When they do this, you need to stop what you’re saying and let them process. More often than not, they’ll respond with one of the following: “How much is it?” “Will my insurance pay for it?” “When would you do it?” “How long will it take?” “Will it hurt?” or “Will I need antibiotics?” What matters is you listen to their concerns, explain it in plain English and cut to the chase. I have had several patients come to my practice after they visited other offices to address their loose-fitting denture. In literally two minutes, I present the choices by saying, “Well you’ve got just a few options here. One, we can do nothing. Two, we can re-line it. With a reline, you drop it off at eight in the morning and you come back and pick it up at the end of the day. Three, we can make you a new denture. The fourth option, which would be a lot better, involves implants. We can put two of these little titanium screws into your jaw where the denture snaps on and stays in place. Better yet, we can put four implants in there and then the denture would really snap-on nicely. Or we can put six implants in there and that denture wouldn’t even come out of your mouth. Which one of those options sounds best for you? Let’s have Dawn, our treatment coordinator, go over the fees for these different options and assist you with reserving a time to get started.” What I just wrote would literally take you two minutes to recite. It was simple, explanatory and to the point. Why can’t we all do this?!

We continually see data that suggests dentists treat only 38 cavities for every 100 cavities diagnosed. That’s a terrible statistic. You might be earning your FAGD or your MAGD and think you’re on your way to total dental enlightenment, but I’ll let you in on a little secret – you’re not. Why? Because two of every three kids come into your office with caries and you don’t remove them. I don’t care if you’re using composite or amalgam – you need to treat as many cavities as you can. It’s your sacred and sovereign duty! Easiest way to do this is to get your staff involved in the treatment plans. It’s one thing for a patient to try to trust the guy who’s presenting a treatment plan in Latin (that’s rare), but it’s another thing for the patient to implicitly trust the entire staff standing behind the dentist nodding their heads in agreement and better explaining the treatment plan.

When you and/or your staff can explain a treatment plan in plain English and combine it with some great visuals from your digital X-ray system, every single one of your patients is going to fully understand what’s going on in their mouths and will want you to do something about it. It’s impossible for your patients to grasp what you’re trying to explain to them on a one-inch by one-inch X-ray film. I still can’t believe there are dental practices that do not employ digital X-rays in 2013. You want to explain something to your patient? Blow up the image on screen and do some teaching. Better yet, print off their X-ray on a piece of paper and circle the trouble spots, then give them the printout to take home as a reminder of what they need to have fixed.

Every single dental practice consultant I’ve ever met has told me when they walk into an office and pull up the report generator on the practice management software, 80 percent of all of the reports have never been run once. So, maybe you are only treating a third of the diagnosed dentistry, or maybe you’re doing a better job than that… or maybe you aren’t. You’d never know because you don’t know what the score is. You don’t know what your close rate is. You don’t track it. When you start tracking the dentistry you’re doing against the dentistry you’re diagnosing, you start to become a much better dentist. You start to realize you might not be the best person in the practice to sell dentistry to your patients. Your close rate will improve and your patients will be much happier with healthy mouths. You owe it to yourself, your practice and your patients to start running your treatment plan reports and actively reviewing them to help identify your monthly close rate. It’s time you start taking the selling process more seriously. Taking 500 hours of CE and earning your MAGD is completely useless if you’re not going to treat two-thirds of the people who come through your doors.

Humans are social animals. Social animals exist in tribes, and for the survival of every tribe you need order. For there to be order, there needs to be control. Social animals are hard wired for control, and because of this a lot of businesses become unsuccessful because the owner or CEO abhors delegation and feels the strong need to control everything. How does the CEO of a Fortune 500 company run her operation of 100,000 employees if she doesn’t delegate anything? It would be impossible! The leaders who rise to the top don’t fear risk or delegation – they retain and attract quality key people, give them responsibilities and then get out of their way. Success is counterintuitive to how humans operate.

Another great example is how most dentists imagine the way they are going to retire and sell their practices at age 65. At age 55 they start thinking, “Well, I’m going to retire in 10 years, so the last thing I’m going to do with this practice is invest in any new equipment or new technologies or implement any new techniques into my repertoire.” They’re content with milking the cow dry and refuse to feed it anymore oats, grass, grain or water. But here’s the amusing part: when it comes time for that dentist to sell her practice, she thinks it is going to sell for some huge amount, but it’s not going to happen. Nothing in the practice has been updated, new patients have dwindled to zero and it has become a business that nobody in their right mind would purchase at the price in the dentist’s head.

You have to realize the final 10 years that you are in practice are the most important years to double down on your business bet! In this time you can’t be milking your practice of what it’s currently worth only to sell it for pennies on the dollar. You need to modernize your practice. You need to move it from a lousy 1,000 square foot rental space on the third floor of a medical building to a premium 4,000 square foot building right out on Main Street with a huge sign. This is the time for you to upgrade from 2D X-rays to 3D cone beam computed tomography! This is the time to invest in CAD/CAM! In dentistry the only dogs that can’t learn new tricks are dead dogs!

If your practice is neglected because you milked it for the last 10 years, you will end up with an illiquid asset. You have to get your business poised for growth. You can’t sell a sinking ship. Just like with the sale of a home, when a window breaks, you don’t say, “Let’s just wait until two other windows break and then we’ll fix it.” No way.

Here’s another housing example tied to liquidity: a three bedroom, two bath house in Phoenix, Arizona, can easily sell within 30 days, but a 10 room house with an eight-car garage and a tennis court and Olympic-sized pool can sit there for three years because it is just not a liquid asset. Nobody wants it or can afford it. Along these same lines: the corner commercial lot on the corner of 1st and Main, you can sell in a heartbeat for premium price. But if you go just 300 yards down the street either way, you might be looking at half the price and, worse, you might never be able to sell it. I mean there are intersections in Phoenix that are still vacant from when I moved here 25 years ago because they just weren’t perfect. This is why location is key! So if you’re renting in a medical building or you aren’t set up on a great location, you need to be poised to sell, so get moving!

Here’s something else you need to think about if you’re considering retiring and selling your practice in the next 10 years: interest rates on CDs right now are at two percent, so that means for every million dollars in cash you have in the bank, in government bonds or CDs, you are going to make $20,000. Let’s say the average dentist makes $140,000 dollars a year. That means they would have to have $7 million in cash in a two percent government bond or CD at Bank of America or Chase to maintain their income. That is just not going to happen. I don’t know of too many dentists that can walk away at 65, sell their practice and have $7 million in cash earning two percent.

If you’re a renter and you sell your practice for $400,000, that’s it. That’s all you get. But if you owned your practice and you owned the building, you could sell your practice for $400,000, but keep the building, so you would charge rent to the new dentist who purchased your practice. Every year you can adjust the price of the rent based on the Consumer Price Index, and over the next 10 years, you could earn an additional $400,000. Then, maybe, at the end of the 10- year lease, the new dentist wants to buy the building. Then you finance that to the new dentist and you end up with yet another 10-year income stream. Think about it: the renter made $400,000 and gave half of it to Uncle Sam, so she’s sitting there with $200,000, which at two percent is making $4,000 a year. At that point the renter dentist is going to have to go be an associate somewhere else (at age 65) in order to live the way she did when she was practicing! So instead of continuing to rent the space for your practice, you need to get poised for growth. Buy that premium property on 1st and Main or a 4,000 square foot building right next to a WalMart, then sell your practice and rent out your building to earn revenue the smart way.

But this only applies to dentists who want to retire. Me, personally, I never want to retire. Sure, the first year of retirement is fun – you get to golf all the time and go fishing. It’s like a really long vacation. But by the second or third year of retirement, you start to see some dysfunctional behavior. There’s no passion for life. They let themselves go. They don’t have a reason to shower in the morning, let alone get out of bed. Here’s something you should consider if you’re actually considering retirement: don’t retire! I’m serious! There are 5,000 new dental school graduates entering the dental profession every year and they’re looking for a job. These kids are so desperate for a job, when the government asks them to join the military and sit on an aircraft carrier in the middle of the Pacific Ocean or Afghanistan, it sounds really enticing to them. And I hear the excuse all the time from dentists in rural areas that they can’t find an associate because they practice in Middle of Nowhere, Montana. Really? You can’t convince someone to stay in America where nobody’s shooting at them but the government can convince them to practice in Iraq? Stay in practice and be a mentor for crying out loud! Do you know what your unique selling proposition is to these new grads? Do you know what you have to sell more than anything? You! You get out there, you get poised for growth, you go to the finest finishing schools in America like The Pankey Institute or Spear, you get your practice to the very top of your game, and then you get your pickings from 5,000 graduates, some of which are seriously considering going into the military and practicing dentistry in some third world country. Instead you could just reach out and say, “Hey you, new grad, come work for me. You’ll probably look back on this decision when you are 65 years old and realize it was best decision you’ve ever made, because I’m going to teach you how dentistry gets done. It’s all going to be cool, we are going to have a good time working together and you are going to become a very successful dentist.”

Best Tips for Better Practice in 2013

Dentaltown Magazine wants to know what you’ve done this year to make your practice the best it can be! Visit www.dentaltown.com/BestTips2013 to tell us what you’ve done to improve your practice. Keep your eyes peeled for the December issue of Dentaltown Magazine and your tips could be featured in that issue. One lucky contributor will be drawn to win a copy of Dr. Howard Farran’s One-day Dental MBA DVD.

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