Former Chairman and CEO of General Electric Jack Welch always used to say a company should either be number-one or number-two in a particular industry, or else leave it completely. How does your dental practice stack up in your area? How do you know if you’re in the top two dental practices in your zip code? How do you compare your practice to the competition?

When I earned my MBA at Arizona State University, one of the first things I learned when it comes to evaluating your competitors and your own business was the SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a way of looking at businesses and determining its most impactful factors. I’ve always recommended that dental practices do a SWOT analysis on the top competitors in their area.

Just like in cross-country running or competitive swimming, there will always be someone faster and slower than you in your business competition. What are their strengths? Do they have more knowledgeable workers? Do they offer their services at a lower price? Do they advertise more efficiently? Are there any affiliations that are helping them? And what are their weaknesses? What opportunities does their business present you? What threats do they pose?

Doing a SWOT analysis with your management team to answer these questions is a perfect team exercise. We start off with a box (see page 18) and write down what we see are our competitors strengths, weaknesses, opportunities and threats. It’s a fantastic mental exercise and it really gives clarity to my team.

I learned years ago that there was another dental practice in my area that was entirely focused on Medicare/Medicaid business. That practice had a much lower cost structure because it used very low-cost, entry-level employees. So, in doing a SWOT analysis on that practice with my team, I gave up that demographic. I could not compete in the Medicare/Medicaid business because I employ several long-term staff members who are extremely knowledgeable, extremely developed, and we were making more of the middle-of-the-road, Ford-Taurus-type of dentistry.

There is another dentist in my area who is entirely focused on the cosmetic end of dentistry, doing fancy veneers, bleaching, etc. He is focused on this type of high-end dentistry 40 hours a week. Because cosmetic dentistry is a very small part of our business, we decided not to be a “cosmetic spa practice that just focuses on smile makeovers.” We knew how to make the expensive Mercedes-Benz-type of dentistry but we decided not to focus on that area of dentistry because I practice in Phoenix, not Beverly Hills. Just like I didn’t feel like I lived in the area to sell the Mercedes- Benz-type of dentistry, I didn’t feel like I lived in the area to have a Medicare practice. I zeroed in on my demographics – solid, middle-class Americans – and consequently we focus on the Ford Taurus, mid-range, quality, no-frills, family dentistry.

As far as your core competency, like Jack Welch says, you have to be first or second in your market or you’re eventually going to get run over and die. So if you’re third, fourth, fifth or sixth place, you have to ask yourself if you can fix it. Maybe your competitors have a cost advantage. Maybe they employ minimum-wage employees, no frills, no thrills, and they have the lowest prices in town because they have the lowest cost. Maybe you realize you have a higher cost structure because you employ more expensive, more knowledgeable workers.

There are a lot of plumbing businesses in Phoenix – it’s rare to go for a drive and not pull up next to a plumbing truck at a stoplight. They’re everywhere. Even though there are dozens of plumbing businesses in our zip code, they’re different from one another, and not just by name. Some of them focus on residential plumbing, some are commercial plumbers, some focus on new construction and others focus entirely on 24-hour, same-day service. Even though they’re all plumbers, they all work in entirely different markets. By using a SWOT analysis, you can figure out who is doing what and who is going after what in your dental market. Is anyone doing cosmetic dentistry? Is anybody focusing on 24-hour emergencies? Does anyone focus on early morning appointments at 6 a.m. or 7 a.m., or after-work appointments at 5 p.m. or 6 p.m.? Is anyone open on Saturdays? Is anybody focusing on Medicare/Medicaid patients? Is anybody focusing on sleep apnea and snoring? Is anyone focusing on Invisalign? These are all areas in which you can differentiate your practice from competitors.

If you do a SWOT analysis of dental practices in your area, you’ll be able to better understand each practices’ unique selling proposition (USP), and you can see if there’s an opening in the market for you to offer your customers something more unique. Take emergency dental for example. You might find that of all your competitors, no one ever takes emergency patients on the same day. Emergency patients aren’t price sensitive. They’re in pain right now and want to get out of it right now; everyone else makes them wait three days to three weeks to get in, so you should adjust your business in order to get them in that very day.

After you do a SWOT analysis on your competitors and you figure out a way to differentiate your practice from the rest of the pack, the next time you go to the ADA Annual Session you might start thinking, “I practice in a small town of 5,000 people, there are eight dentists in this town and not one dentist mentions sleep medicine, snore guards, TMD or migraine headaches.” So instead of going to the ADA and taking your 300,000th course on fillings, root canals and crowns, you might instead take your entire team with the mission of: We’re going to be at this convention in New Orleans for three days, we’re going to learn something new and we are going to come back to the office and attack sleep medicine or Invisalign.

When you do a SWOT analysis of your competition, you should start at the same place all potential customers start: their websites! Get your team together and start looking at your competitors websites, asking them, “OK, knowing what we already know about our competitors, does their website spell out what they do? Is it clear?” Maybe after you do your SWOT analysis on your competitors, you’ll take a look at your own website and think, “Y’know, our unique selling proposition really doesn’t stand out on our website. Maybe we need to spend more time, money and effort on our web presence. Maybe our core competency should be in bigger letters on the home page. Maybe the things we don’t really excel at shouldn’t even be on the first page.” Like I said, it’s a great exercise for you and your team to discuss.

I’ve worked with Jay Geier and the Scheduling Institute quite a bit. The other day, Jay and I placed calls to some of my competitors. We called some of the elite dental practices in the area, and when the receptionist picked up the phone, you’d think you were calling Joe’s Tire Shop. That exercise alone made me double down on my front-office training, to make sure that we’ve got the best people on our front desk selling the dentistry we love to do. You just learn so much with a SWOT analysis!

Do your SWOT analysis on every one of your competitors and you will learn a lot of what to do, what not to do, what to focus on and what to give up. At the end of the day, remember, if you try to be everything to everyone, you’ll go out of business and end up being nothing to no one. – See more at: http://www.dentaltown.com/Dentaltown/Article.aspx?i=314&aid=4259#sthash.4F5ExCq0.dpuf

After one of my recent lectures, I was shooting the breeze with a few doctors and we got on the topic of retiring in this putrid economy. One of the docs said, “Y’know guys, I went to a funeral the other day and I thought about that phrase, ‘Nobody on their death bed ever says they wish they would have spent more time in the office.’” This elicited some hearty chuckles, but I thought, “Are you freaking kidding me? That’s exactly the opposite of what every meaningful person ever said on their deathbed.”

I mean, do you think Mother Teresa would have said, “Man, I wish I didn’t spend so much time working in the orphanage. I wish I didn’t take so much time caring for the sick and the dying, and raising money for my mission of hope,” on her deathbed? Most spiritual leaders say the way to serve God is to serve your fellow man, and the more you serve your fellow man, the more you serve God. Guys, you’re health-care providers! You’re not out there selling something someone doesn’t need. When you’re doing dentistry faster, easier, higher in quality, lower in price, you’re serving your fellow man. You need to stop thinking about when you retire, and think more about how you can better serve your patients!

OK, spirituality aside, you’re all aware by now that we’re in the middle of an economic contraction. Things aren’t looking too good. In fact, things aren’t going to look any better until we have at least one balanced budget. It bothers me when economic Neanderthals constantly claim the U.S. economy is growing one-and-a-half to three percent a year when the national debt is more than $15 billion. Things need to get worse before they get better. When I was a freshman in 1980, interest rates were around 21 percent. If we endure another round of inflation, a 21 percent interest rate will probably be the absolute minimum (which if you have an adjustable rate loan with floating interest, you’d better tie that sucker down ASAP). And you’re thinking about retirement? Guys, here’s the bottom line: It’s time for an attitude adjustment.

One of the ideas you have to get rid of is you’re not going to retire at 55. You’re probably not going to retire at 60, or even at 65. But even more – why would you want to?! The most fun and exciting people I meet when I go out and lecture are dentists who are 70 years old and they’re still going strong; they still love what they’re doing. Sure they might have cut back from five days to three or four days a week – but they’re still really into dentistry. The days they do work, they make a hell of a lot more money than they would on the interest of their retirement savings account. When you’ve been a dentist that long, you know just about all there is about your patients’ mouths. You’re pumping money into your 401(k) in hopes to retire by 60, but that’s working against you. Seriously. Yes, it’s pre-tax savings, but right now we’re seeing the lowest tax rates in 100 years, and it’s a certainty that when you pull the money out in 10 or 20 years, the tax rates will be twice as high. A 401(k) doesn’t make sense.

You need to find a way to keep working and the way to do that is to keep enjoying what you do. Look at Sam Walton, the founder of Wal-Mart and Sam’s Club. He found a way to sell all of the big brand names like Sony and Hitachi and Coca-Cola with a low-cost distribution model. He had multiple myeloma at the end of his life. Instead of lying around feeling sick, he’d fly from his office in Bentonville, Arkansas, to Houston, Texas, to get his chemotherapy treatments, and then fly back to Bentonville to continue working. The man died a billionaire – and he died at his desk doing what he enjoyed doing. He saw his work as a mission.

Another attitude you’re going to have to beat is running your practice the way you’ve always run it. In this great contraction you need to have lower prices. You’re going to have to increase your marketing and add new products and services.

Every time the Earth goes around the sun, you give your staff another dollar-an-hour raise, and you end up raising your prices five percent. You have to knock that off. In this contraction, you need to freeze wages, and maybe the next time our planet goes around the sun, you’re going to have to lower your prices five percent. This means you might even have to go back and join dental insurance plans. People are going to buy only what they really need or really want to buy. If they can’t get their dental work taken care of with some supplemental insurance help, they might not do it (they’ll even shop their treatment plan around to other dental practices and go with the cheapest office).

Marketing-wise, if you don’t have an awesome Web site by now, you’re not even trying – hell, you’re not even paying attention. You should be search-engine optimized so you show up on the first page of Google results, you should be buying Google ads, you should have a Facebook page, and you should be buying Facebook ads.

You should be adding new products and services. Get a 3D CBCT machine and start placing single root form implants. Go to an orthodontics course and learn how to do simple ortho. Learn Invisalign. There’s a bunch of sleep dentistry groups that treat sleep apnea and snoring. Go sign up to make all the mouthguards for your high school football team. Do something!

It’s also important you start lowering your costs. So, quit doing gold. If an insurance company is only going to give you $1,000 for a crown, you can’t afford a $250 gold bill for a full gold crown. This is challenging to people because they believe in phrases like, “Treat other people like you want to be treated.” I have seven restorations in my mouth and they’re all gold. But I can’t do that for all of my patients. I’m not getting a raise from the insurance company and the price of gold has doubled. I can’t do full gold. Neither can you. So instead of a lab bill, invest in CAD/CAM technology.

Right now, I feel really bad for people who work in the luxury business. The sales of Fairline yachts, Cadillacs, Porsches, high-end steak dinners, Louis Vuitton purses and Barker Black shoes are going to plummet. You’re even going to see the profits of midlevel restaurants like Chili’s and Olive Garden shrink while the profits of Taco Bell and McDonalds grow (a $5 lunch looks better than a $15 lunch to just about anyone these days).

That being said, I live in Phoenix, Arizona – one of the most saturated markets in dentistry – and I could give you the names of almost 100 dental offices in my backyard that have gone under. They were part of two groups. One group was the high-end, cosmetic, metalfree practice that would replace all your fillings with tooth-colored restorations. They dealt in bleaching and veneers – and now they’re gone. They quit doing bread-and-butter dentistry like root canals and crowns; they didn’t know how to make a denture, they didn’t pull teeth, they couldn’t dig out a wisdom tooth, they couldn’t do minor orthodontics. Everything was elective, and patients elected to do something about their yellow, crooked teeth some other time.

The other group of practices that went under was start-ups. Start-ups went under because new-patient flow is down coast-to-coast. Even practices that are flat or growing five or seven percent every year are still facing low new-patient flow. It used to be you’d open a practice, do some marketing, buy an ad in the Yellow Pages, do some targeted direct mail and you’d fill your office up with patients. That’s not working anymore. Practices that have been around for 15-20 years and have good word-of-mouth referrals, solid reputations and high marketing budgets are going to take most of the patients in the area.

This contraction isn’t letting up any time soon, gang. It’s time we all realized we’re in this for the long haul and we need to remember to return to our core competencies, stop thinking about retiring at 55 or 65 and make it a point in this new year to lower your costs, increase your marketing, add something new to your dental armamentarium and lower your fees. – See more at: http://www.dentaltown.com/Dentaltown/Article.aspx?i=270&aid=3617#sthash.dXWqZKSm.dpuf