According to Albert Einstein, “In the middle of difficulty lies opportunity,” …even if you’re a dentist (I added the last part).
Every few years, the dental industry goes through a rough patch, finds its footing, and settles into a “new normal,” which is generally better. The Coronavirus pandemic of past two years seems to be providing quite a few opportunities.
In response to the AIDS epidemic in the 1980s, OSHA suddenly decided it would be a good idea for dentists to wear gloves and masks. The American Dental Association jumped in to object, with experts claiming:
“…Patients need a warm and trusting relationship with their dentist to help overcome fears and make necessary dentistry possible. It will be more difficult to establish this relationship when the dentist is gowned, shielded, and masked. [These barriers] will have a profound effect on the relationship between the dentist and patient.”
Today, it’s difficult to imagine wearing PPE was even an argument, but it was a big deal at the time.
In the 1990s, veneers were all the rage and cosmetic dentistry courses, institutes and academies were popping up all over the country preaching that you could practice 2 days a week, do only big cosmetic cases and earn 20 times more than the bread-and-butter dentist down the street. Then, the economy tanked in 2007, and instead of tapping their 401k for the $30,000 to do a roundhouse of B1 crowns and veneers, patients started asking, “Does my insurance cover this?”
And speaking of insurance, does anyone remember at any time in dental school where they told you writing off 40% of what you produce to get new patients means you’ll have to produce 35% MORE than last year just to break even? It makes you want to join a DSO!
And don’t get me started on DSOs……
Historically speaking, dentistry is a “Mom-and-Pop” industry of professionals. While big, mega-million-dollar organizations are prepared financially and operationally to weather these economic storms, small businesses, such as dental practices, just aren’t.
Even The Profitable Dentist (TPD) Magazine, which has remained a constant resource, sometimes struggles to fulfill our mission to provide the practice-owning dentists the business knowledge, tools and connections needed to balance the competing roles of clinician and business owner during these times of dramatic change.
Like every other business, we have had to adapt in response to the ongoing impacts of the pandemic. The print magazine started by Dr. Woody Oakes over 30+ years ago, the massive live dental events, and DVD training have needed to evolve for some time, but the past two years has forced us to focus on the fundamental things we do well, as well as finding things we can do better.
In this article, I want to share how we grew to become one of the most influential forces in the dental profession, and how we’re evolving to meet the new challenges and realities ahead.
Dr. Woody Oakes
I first met Woody many years ago, through mutual friends. I would see him at his beloved Indiana Hoosiers basketball games, at events around town in New Albany, and I passed his dental practice, Woodside Dental, countless times. But it was a conversation during a party at his home in 2015 that would change both our lives forever.
Woody graduated from Indiana University School of Dentistry in 1974, became an associate to an aging dentist wanting to retire, took over the practice and at once realized he knew a lot about dentistry but little about running a dental practice. For the next six years he barely made a profit, was evicted from two apartments because he couldn’t pay his rent, and for a brief time moved back home with his parents.
Desperate to be successful, Woody would drive to colleague’s dental offices on his day off to look “over their shoulder,” take notes, and learn all that he could. One day, Woody had an epiphany that changed his life and the industry; it wasn’t his dental skills that needed improving, it was his practice management skills. Once he changed that focus, everything changed and his practice turned around.
When he shared this experience with other dentists, he heard over and over, “You should write a book,” so he turned his notes into the best-selling practice management book “The Winning Combination.” After the book started selling, Woody was inundated with requests to share more of his ideas, tips and successes, so he got together with a handful of other docs and they began having “Sunday calls.” During these calls, they would each add some practice advice and put it all together in “The Nationwide Dental Newsletter,” which Woody produced on an old Xerox copier in the basement of his practice and mailed to thousands of dentists nationally every month.
Then, in 1996, tragedy struck. Woody had a heart attack and suffered a massive stroke during open-heart surgery. During the months of recovery that followed, he was forced to sell his practice and find a new career path. He decided to turn the little newsletter, then called “The Profitable Dentist Newsletter,” into a real magazine and share his experiences by becoming a coach and mentor for other dentists struggling to be successful practice owners.
He also decided to turn the little annual meeting that had grown out of the newsletter a couple of years earlier into the first major private seminar for practice-owning dentists, and the Destin Spring Break Seminar exploded. In fact, nearly every national speaker and influencer in dentistry today started their career on the Destin stage. In true Woody fashion, he had used his creativity and perseverance to overcome adversity and create something better.
STEVE
I became a business owner in 1991 when I bought controlling interest in an industrial power business I had worked at during college. I increased revenue from $800,000 to over $25 million and diversified into the exploding markets of telecomm infrastructure and utility power. I sold that business in 2000, and was eager to find my “next thing,” which turned out to be dental labs.
While talking about my situation over lunch with a college friend whose wife was a dentist, he said the fateful words, “You should get in the dental lab business. All I know is they’re all expensive, my wife hates them all, and if anybody can figure out that business, you can.” From that conversation, WhiteRock Dental Lab was born and I spent the next few years and a few million dollars trying to understand why such a simple business model struggled to grow and be profitable.
Eventually, I went to a few dentists who had racked up a big lab bill they couldn’t pay to try and figure out the problem. I found they would pay their lab bill one month and rent the next. Much like the dentists Woody worked with, these docs were amazing at their craft, they just had little idea how cashflow or profit worked.
At first, I offered guidance on running their business as a means of collecting the money they owed me, but then I realized I could do more. In some cases, I worked as a business consultant, and in some, I took an ownership interest and became a “partner.” The doc would do the dentistry and I would manage the business. Unfortunately, the unhealthy habits that led to negative cashflow and unprofitability in the beginning soon crept back in and most of these relationships ended.
Interestingly, one of these deals was with Woodside Dental, which I still own today, and was the practice Woody’s grandfather Dr. William Woodside started in 1904. Woody had become familiar with some of the systems and techniques I used, and we talked about me joining Excellence In Dentistry as a coach. Our timing was not right, and we both continued to do our own thing for another few years.
Then, in 2015, during an event at Woody’s home, we began chatting and he shared that he’d been struggling with his health again, which translated into struggles with his business. He asked if I would “take a look under the hood,” which I was grateful to do.
What I found was that, fundamentally, both The Profitable Dentist and Excellence In Dentistry had a lot of amazing history, awesome name-recognition, and led their categories in the industry, but were struggling to be relevant in a rapidly changing media landscape. Dentists were simply not buying DVDs for education as they once had, advertisers were looking for online strategies instead of static print ads in a magazine, and a monthly CD (or cassette tape) subscription for interviews with Key Opinion Leaders was being displaced by something called a “podcast.”
For the next two years I immersed myself in the business of dentistry and in 2017 bought the business. Woody stayed involved as long as he could, but his health has continued to decline, and today he lives in assisted-living.
As a non-dentist, I’ve always been intrigued by the business of dentistry. It’s an industry where the owners are educated and trained as clinicians but must master the skills of an entrepreneur to be successful. For generations, it has simply been assumed that you will start a business after dental school.
If you’ve heard me speak at any of the dental meetings, you’ve heard my stats on the dental business:
- 9% of Attorneys own their own practice
- 7% of Accountants own their firm
- 12% of Physicians own part of their practice through a physician group
- 6% of Optometrists own their own practice
- 84% of dentists own their practice
I find that amazing. I can think of no other profession where a person is trained in a technical skill, yet the industry they practice in almost requires them to be an entrepreneur, using skills they’ve never been exposed to.
And when it comes to people with an actual education or training to run a business, compared with 84% of dentists, the numbers are even more surprising:
- 13% of Americans owned their own business in 2019 (a new record)
- 19% of Business School grads will start or own their own business
- 3.5% of Harvard MBA grads each year will start their own business
- Again, 84% of dental school graduates own their own business
Then, when factoring in the average rate of small business failures, a somewhat bleak picture emerges:
- 22% of small businesses fail within the first year
- 32% of those that survived fail within the first two years
- 40% fail within the first three years
- 50% fail within the first five years
- 66% fail within 10 years.
In many ways, given these statistics, it’s easy to conclude that most dentists are set up for failure. They’re conditioned to equate financial struggles and failings as practice owners with inadequate clinical skills when that’s simply not the case. They spend thousands of dollars taking clinical courses that produce no discernable impact on the anxiety they feel at the start of each day or their financial burdens.
The revelation Woody had back in the 1970s and my experience trying to get good dentists to focus on their business over the past 15 years is the same today. The reason I start every interview, course, or conversation with “Hey Practice Owners” is intentional; I want our audience to be in their practice owner mindset when we talk about how to improve their practice success, not their dentist mindset. It’s baked into the DNA of the TPD brand.
We also intentionally don’t create content directed at NON-dentist practice owners. In many areas today, the fastest growing dental groups are owned by accountants, former practice managers and other entrepreneurs. While I respect what they’re building, they come into the business with an entrepreneur’s mindset first. The concepts and approaches they rely on are not clouded by a dental school education and training.
TPDMagazine Online
This issue of The Profitable Dentist Magazine is a new commitment and strategy for me.
We are not abandoning the print edition that tens of thousands have come to depend on, but the simple fact is, curating, designing, printing, and mailing have become extremely costly and unpredictable. As a result, beginning with this edition, we are dramatically expanding our online format which enables longer articles, more interaction, more contributors, and more content.
Articles will be available on any device with an internet connection, contain more images, links to associated content, and can be saved for reading later or shared with colleagues or on social media. We are also able to invite a much broader collection of contributors, including industry experts, speakers, coaches, and dentists wanting to finally get that article they’ve been working on the past five years published.
However, the one thing that will not change is our commitment to our audience of practice-owning dentists, and the unique challenges they face. As Woody realized all those years ago, our readers and listeners got all the fundamentals to be a good dentist in dental school. As I like to say, “Your skills are good enough that your dental school gave you a diploma and your State gave you a license.” It’s our job to give you the business knowledge, tools and connections needed to build a successful practice and a gratifying career.
I believe the complications and setbacks over the past two years have created opportunities that are just now presenting themselves if we look for them, and I’m committed to continuing the tradition of supporting the dentists and practice owners who have come to rely on The Profitable Dentist brand in exciting new ways.
In upcoming issues, you will see a new focus on two critical Pillars of Success, Emerging Small Groups and Oral Systemic Health. Both are areas we believe will contribute to the success of solo practice owners over the next decade.
In addition, we are expanding our content to focus on “Well Being.” Sadly, dentistry experiences a disproportionately high incidence of divorce, bankruptcy and suicide. As I’ve said many times before, I don’t believe dentistry is the problem, it’s the practice ownership, and we are committed to give the knowledge, tools and connections to address this unnecessary situation.
Along with moving so much content online, we gain the opportunity to interact with our audience and get so much more feedback. I pride myself in keeping a finger on the pulse of practice ownership and encourage all ideas, criticism and advice you want to share.
I believe the future of solo and small group practice ownership is just now finding it’s groove, and am excited to continue the tradition The Profitable Dentist Magazine and brand has established.
