At the back end of last year the Fine and Hive teams spent a day in a beachside hotel wondering about the next 10 years in dentistry. We split into groups and brainstormed the main themes, which came out something like this:
- Private equity money will continue flowing into the sector
- There will be significantly more corporate ownership
- Practices in semi-detached houses in the suburbs will die out
- Independents will be groups rather than single practices
- Any surviving single site practices will be really effective businesses by anyone’s standards (well run, profitable, high staff morale)
- Success will be even more about business skills over clinical skills than today
- All associates (and definitely hygienists) will have to be employees as HMRC closes in on the sector
These changes will affect us too, as suppliers to the sector, because they will change the profile of our clients. Today, practice owners who aren’t very good at business can earn £200k by working hard at dentistry, they can cash in their chips and get a very nice multiple, given the right advice. A day is coming when the most competitive independent groups — many of whom we work with — will have rendered this impossible.
This is a predictable process of capitalism. Capital moves into markets where it is easy to make a return until all similar avenues to make an easy return are fulfilled. As the cost of making a good return increases, investment slows down. We are not at this point yet because corporates are still buying up.
Actually, the opportunities remain enormous for dentists, affiliates and suppliers. This is still a dynamic growth market for a few reasons:
- The rising number of single people (a global phenomenon)
- The ongoing entrenchment of self-indulgent, selfie society values
- The increasing longevity of people with disposable incomes
Add to that the state of play in the market, which couldn’t be much better for a hungry entrepreneur:
- The network of unremarkable legacy practices that are easy to outmanoeuvre
- The dearth of true vision other than corporates doing flips
- The collapse of the retail rental market, creating affordable high street locations
Plus, dentistry is a global business, and the UK could be the leader for a number of strategic reasons (not least language, global prestige, our financial sector, our geographical location, the ease of doing business here etc), so the sky’s the limit. But practice owners need to be in a certain position before they can take advantage of these things. We’ve developed a mantra for new clients to get them there — all of it is by now pretty obvious, but it’s essential:
- Move to a 60/40 revenue mix (60% new patients, 40% existing patients) — this does not mean shrinking the existing patient revenue in absolute terms
- Become patient centric and retail focused
- Focus on high value treatments: implants, ortho, facial aesthetics and sedation
- Increase production capacity — open 7 days
- Attract high grossing specialists or talented GDPs
- Work only to treatment plans for new patients
- Adopt a marketing system which maximises conversions throughout the journey built around a TCO (sales manager)
Beyond this lies the really exciting opportunity for a fundamental gear change in your business life. We provide support around the behavioural adjustments needed from practice owners to become big hitters. If you can do the things listed below, we can support you through the transformation and by 2030 you could be very wealthy:
- Understand yourself
- Understand your ambition
- Run your business by numbers, work to a budget, work to EBITDA
Essentially this is about learning to detach from your emotions and develop leadership skills. That will enable you to get the following things done:
- Split your clinic into sales and production
- Create a multi-channel marketing system
- Build a management team
- Always be recruiting clinicians, hygienists and nurses
In the 2010s we helped our clients create some of the most advanced retail dentistry units in the UK and Ireland, and we are involved with the small groups who will become best known in the sector. There is still plenty of space for more ambitious practice owners to make a dent in this market and consolidate in time for the end game, when there is no more easy street left to cruise on. Are you with us?
Take a look at our TCO and leadership courses if you want to start the decade with a bang.
Best wishes
JJF
07860 672727
