PennWell Dental Community
First of all, you really do need to decide THAT you want to succeed!!
I know it sounds crazy to have to tell someone that he must decide to succeed in order to succeed, and some doctors might well be putting this issue aside right here with the comment, "Gee, another kind of philosophical garbage."
Too bad for you, because the truth is, if you are not where you want to be or are not at least moving fairly well in the direction of where you want to be, then you simply HAVE NOT YET DECIDED THAT YOU WANT TO GO THERE!
The mechanics about marketing, advertising, public relations and management, which I will be describing in this article, are important but not even close to as important as the mental attitude.
This attitude also brushes aside all the built-up dislikes toward ALL KINDS of activities such as:
"I don't like advertising, Marketing does not work I don't like giving speeches."
"I don't think Public Relations works in my business", etc.
"I should not have to spend money on any marketing, because I do good work, or, I must get at least X amount back on any marketing dollars spent", etc.
I only do what I feel comfortable with - yeah right, that is the problem. You feel comfortable with too few things. No matter how reasonably high your amount of accepted marketing expenses are, there is NO fixed X amount - there is only success or failing.
15 percent of profit from one million is a lot better than 30 percent of profit from one hundred thousand (only an example).
One will usually always fail if the amount of marketing actions or marketing money is a rather "fixed" predetermined expense.
Marketing actions and marketing money spent has to be calculated backwards, starting from the amount of money you want to make in your pocket. (I will show you a bit later).
You should NOT think that if you spend "MORE" on marketing that you will have to deduct that "more" marketing money spent from your net income. No, it will, even only after a few months, add to your net income. If in the past that has not occurred then it is not because what I am saying here is wrong or not applicable in YOUR area or YOUR type of practice. It is simply that YOU have made major strategic mistakes in marketing or in managing your practice which could include but not limited to the following:
Not enough marketing
Not marketed long enough
Did not do enough different and diverse marketing actions at the same time
Did not have the right message (common occurrence)
Killed a very well working marketing campaign by badly answering your phone, or bad delivery of your service.
To end off on that subject, it is that you simply did not have the right amount of energy. Without which, nothing much will happen no matter how much you spend.
In case you have tried to market and market until YOU run out of money before it starts bringing some returns - it was simply YOU who did not have the knowledge to make your marketing money go farther and longer with better and faster returns.
In short, the professional knowledge of marketing is NOT, for no reason one of the higher paid activities in the world. It is so valuable because the best product without sales = nothing. Actually, it equals tears, stress, domestic quarrels over money and how to spend it, or a feeling of losing in life.
Once and only once you have an open mind to the above will the following data actually help you! (Because otherwise you simply won't implement it - and whether you implement it or not that'll be the test whether you understood the above.)
Here we go.
Let's say you make $100,000 net income a year.
You are a dentist and have a goal of $300,000 net income yearly and you want to do NO dentistry yourself because you want to be free to do many other activities of yours and also want to have a practice which is (a) easy to sell in case you want to or (b) can bring income without you, until you die.
You will decide whether you sell or keep it when the time comes but you want to be set up for all options and surely want to be free whenever you feel so.
You know that if other doctors do the work you, you’ll will have to pay them about 30-50% of their production (collection). Thus your profit margin will be lowered compared to when YOU do all the dentistry. There will also be other increased expenses with that new set-up such as personnel turnovers, mistakes, and even added personnel in proportion to what you have now. I don't mean more personnel because of more production alone. What most doctors don't see is, with increased business they might need a supervisor due to the increased number of personnel where before they did not need one. You might need more machinery such as a computer, where before you got way with just a few. This may necessitate a steady computer technician. You can see where I am going with this. So, for the sake of this example we estimate your overhead factor including marketing at 80% even if it is currently lower. We use this example of a fairly high overhead as a soft net and celebrate if it is lower.
So, this at once makes it clear that we need to produce (collect) five times as much money as we want to take home. $1,500,000 is what we need to collect to take home $300,000 as a very safe operating rule of thumb.
It is important that you know that the only way to see whether YOUR estimated numbers are right is to do all the actions and to constantly adjust them and readjust them in all areas from the top to the bottom. Keep in mind; all the numbers are just numbers. Percentages and numbers mean nothing unless the end number (the amount you take home, and with the conditions you stipulated) are present.
However the most important thing is to read our goal, which is $300,000 net profit one that have to be the actual dentist yourself.
Now, how many patients do we need to get $1,500,000 of collection?
Sure, every patient spent a different amount and this amount can vary heavily. But if you look at the last two to three years you will see that if you simply divide the new patients by the dollar amount taken in the same time period you have a pretty good idea what each patients is worth to you.
Try it, it works very well where no major changes in new patients or a change in type of patients (such as changes from private patients to HMO) has occurred.
You could also see how many patients you now are getting and how much money you are making then increase the amount of new patients to see what it would take to make the $1,500,000.
It would be wise to calculate the increase of the new patients need by 20% - 40% higher as a safety net in case the new won patients spent somehow less or due to the increased volume in the practice you and your crew make some mistakes at the beginning.
Anyhow let's say a patient is worth about $1,000 which means you need about 1,500 new patients per year and about 125 per month or about 32 per week.
Now and only now can you start to establish how much marketing will be needed.
Not necessarily an easy thing right away and yes you will be wrong quite a few times; you will underestimate what it will take or overestimate what the particular marketing steps will bring (same thing).
Also it might not be easy right away to do all the marketing options needed because-well there might not be enough money to go around to do so.
All that is common and at first even normal considering that you usually want to grow because you do not have the money and free time you want. If you happen to be in a financial situation where you right away can start spending the money needed to increase then you are in good shape and will expand very fast. Why do you think Microsoft has such an "easy time" out-dusting their competitors and can enter new markets better than anyone else. Money of course - plenty of it. But keep in mind that Mr. Bill Gates had to do the right thing for a long time to get there! And I bet he is calculating his expansion in a very similar way all the time - which again is why he always knows what and how much of it to do to succeed.
In the end it still boils down to knowledge and some guts. Nobody asks you to play Russian Roulette where as you die if you were wrong. No, but a bit of courage, guts, or leaving the comfort zone is surely needed to put the icing on the cake (practice).
In short the money and fun you have today or the lack of it, stems from not having marketed and managed correctly and in sufficient quantities in the past years.
And the money you will have in a couple of years and up till you die will be determined by how much you know about marketing with the right message in the right quantity. The future of your financial state depends on the knowledge you possess to do the right quantity of marketing at the correct time and in perfect harmony.
There is no winning the lottery - only learning the right thing to do and then doing it!
Doing it, and doing it, and doing it despite our shortcomings along the way. Winning the lottery or finding oil are based on luck, - the above is not.
CEO Flasch International