Wednesday, 14 November 2018

The principal - associate paradox


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The principal - associate paradox is extremely damaging to the health of dental practices and yet so many people have not heard about it, have you?



The paradox exists because of the culture of dentistry as healthcare and whether you are a practice owner or self-employed associate contractor your focus will have been on your patients and improving their dental health.

Unfortunately,  most practices seldom make time to look at the performance of the business or to have conversations with their colleagues. Consequently, no one knows what they don’t know, and the financial problems begin to appear, fester and grow.

“A problem can only be present in the absence of a truth-ful conversation”

The paradox is that associates often believe that their principal is creaming off  50%-65% of their gross income and it is all going in the principals back pocket, instead of investing it in development of the practice, team marketing etc.

However, the principals often feel resentful because they put in so much work and take home less than their associates, and are very aware that if they are away from the practice that the practice income takes a massive hit. They  want t and need their associates to step up and share the financial responsibility for the solvency of the practice

The solution is to look at the practice finances and to have an honest conversation about remuneration packages.

Imagine a 2-surgery practice, with low operational fixed costs of £180, 000 per year. That is the costs incurred before you see a patient.  The practice is open 5 days a week  and the dentists working 46 weeks a year, or 230 days each 460 in total.  The daily operating costs are 180,000 / 460 = £391.30

The associate is on a “standard” 50%  of gross and lab bills contact and generating £800 day.
Lab bills are 10% of gross , £80  and materials 7% gross, £56

For the associate  their earnings are  800/2 – 80/2  =£360 day, £1,8000 a week 7,200 a month and £331,200 a year

Let’s look at it from the practice perspective 

Income to the practice  = 800-360 = 440

After lab fees = £400
After materials £344
After operating costs -47.30
Over a week -£236.52
Over a month -946.09
Over a year -10,880

Can you understand why you are working so hard as a principal to stand still?

Can you now appreciate why you are feeling so burdened by finances?

As an associate how do you feel about not covering your costs to the practice?

If you were to do the calculations on your fixed overheads, lab fees, materials costs and associate productivity, what would your figures show?

What can you do about it?
·      Reducing expenses
·      Increasing associate gross
·      Altering associate percentages

Whatever you do, you need to have a truth-ful conversation with your associate, sharing the figures, so they can understand the costs to the practice that they don’t currently see.

If you are a principal or associate  and would like to use our Associate Cost Calculator that lets you compare various remuneration packages, please call 07989 757 884.

Thursday, 8 November 2018

What is your story?

Someone reacently asked me why I do what I do, this is my story.




Why I do what I do

Changing people's lives by changing people smiles and creating champions from challenges.

When I was 19 one Sunday afternoon in September my father drove me to London, to my halls of residence and to the beginning of my life at university. The following Sunday I was viewing his body in the chapel of rest, not knowing anything of his illness in the intervening week. That same day my mother threw me out of the house and told me that I was welcome any longer. Just before the end of the Christmas term I realised that what my mother had said was not just a reaction to the death of her husband, but she meant that I was never welcome back home. Just before my end of term exams I discovered that I was homeless and had to move out of my halls of residence. I was alone and felt like I had no one to support me. My years at university would the worst five years of my life, as I look back at that time I don't recognise the person I was. I'm not proud of many things I did or the person I became. During college, I worked hard and played even harder, and at the end of five years at an astronomical amount of debt. I was alone and struggling.

Within a few years of qualifying I brought my own practice and life became much better.  Then I discovered my manager was embezzling very large amounts of money. I discovered practice was technically insolvent. I had many staff who were dependent on me for their income, and I felt a massive responsibility to them and my patients. I was single with no family to fall back on, the only thing I had to get me through with my resourcefulness. Once again, I was alone, didn't know what to do, didn't know who to turn to and this time I had a mountain of debt.

I had the realisation that I knew how to deliver great dentistry and yet I knew nothing about how to run a successful business. There was no reason why I should do how to run a dental practice as a successful business, as there was no heritage of self-employment in my family and dental school does not teach business skills.

This period of my life was one of the longest and darkest times and yet the most rewarding. I was lonely, isolated, ignorant, frustrated and felt helpless much of the time. My free time was spent in seminars and reading, learning how to run a successful dental practice. I worked with a coach and implemented everything that I could. To this day, he tells me that what made me different from all the other clients was that I acted, and I got results. The truth was I didn't feel I had any other choice, my practice was failing, and I had to blindly trust that my coach and other mentors knew what they were doing, I had no choice. There were times, many times when I doubted myself and was distrustful of those around me. It was bleak.
My ignorance of how to run the business had repercussions in other areas of my life, I was overweight, unfit, drank too much alcohol. I cut myself off from friends and those I did see got the worst of me.

So why do I now work as a business coach, trainer and mentor?

I do what I do so  you and nobody else has to go through the ignorance, pain, frustration and loneliness that I went through.

Within a short period, I transformed a failing business into a profitable rewarding practice the staff felt was like belonging to the family and the patients loved coming in and kept returning and we were financially profitable and stable. We had created a fulfilling practice and balanced lives.

I transformed the practice because I learnt how to run it as a business, no ordinary business, one that put it patients and the team at its heart.

Dental schools still don't teach business skills and I have yet to find many other business owners who have learnt how to run a business before they go into business themselves. Each day I talk to business owners, dental principals and team members tell me they are experiencing some of what I went through, no money. Lonely, exhausted, disillusioned, frustrated and depressed, not to mention being unfit, failed relationships and unhealthy.  I passionately believe that this pain, frustration and isolation that you and so many business owners experience is entirely preventable, and I am here to heal it and prevent it.

Throughout my life, I often felt the only person I had to rely on was myself. Some of the experiences I went through could have broken me and yet whenever I thought things couldn't get any worse I realised I had a choice, to give up or to find the strength inside to overcome my circumstances. I believe that given the right support and encouragement everyone has the potential to lift themselves out of a poor and unhealthy to fulfil their unrealised future. Consequently, it is my mission to spend a minimum three months a year working in Third World environments transforming peoples experiences for the better, and an enabling individuals to become self-reliant and achieve their life goals.

Would you like me to share the wisdom gleaned  from blood, sweat and tears with you so you can take the short cuts?


Call today 07989 757 884 or e mail Jane@IODB.co.uk

Wednesday, 7 November 2018

Are you being paid enough as a principal?

 Are you being paid enough as a principal?

                              

I have recently been approached by several principals to explore how they are paying themselves and all members of the team appropriately. The principals are telling me they are fried, too much to do, too little time to do it and they are resentful because their earnings do not reflect the time and effort they put in especially, lunchtimes, early morning, evenings and weekends.

Does this sound familiar?

Experience has shown that most principals are paying themselves a lower percentage of gross than they pay their associates, for the clinical work. Is that appropriate? I don’t think so, what do you think?

Moreover, when working with principals I discover they are not paying themselves for their other roles and responsibilities. As a clinician / principal you have three roles; each with their own job description, skill set, responsibilities, accountabilities and remuneration package.

Your roles are

Principal / business owner.

To set the vison, mission, purpose, direction and culture of the practice. In this role you are the creator, innovator and primary strategist. To perform this role at your best you need space and time to think, read and meet with your coach/ mentor to explore ideas and approaches. To do this you will need to schedule adequate time for recreation and renovation. 


Business Manager

 In this role you are the planner, strategist, organiser, problem solver and systems creator. You may have a business or practice manager and because the practice belongs to you, you must manage your manager. To do this role to the standard the practice needs you to, you must schedule renovation time so that you can work on your practice and not in your practice.


Clinician

In this role you are a dentist, and this is probably the role that you are most accustomed to and comfortable with, this work is completed in your remuneration time.


We find that clinician-mangers spend most of their time in the role of clinician, because as soon as you put down your mirror and probe, there is a significant drop in income and profitability for the practice and your personal income. In addition, because many dentists are unsure of their roles, responsibilities and skills as the business owner and business manager, primarily because you were not taught business at dental school, these roles are avoided and neglected, to the detriment of the practice growth and sustainability.

Questions for you to consider.
·      Do you know what you need to know about how to be a business owner and manager?
·      Do you have sufficient time allocated for remuneration, recreation and renovation?
·      Do you and your team understand your three roles?
·      Are you being remunerated appropriately for each of your three roles?

If you would like to learn more about how to run a financially successful stress-free dental practice, call us on 07989 757 884 or email Jane at IODB.co.uk to learn more about our practice development and management programmes including, Transform your Practice in 10 Days