We all have heard of the legendary sea monster the kraken from Norwegian lore that, when released, wreaks havoc on anything in its path. The fear-evoking word "recession," like the kraken, is looming in the drama that engulfs the economic world like an eight-tentacled monster.
A recession occurs when two or more consecutive negative economic growth financial quarters occur. Business sales, revenue, and expansion generally decrease during a recession. The unemployment rate generally also increases during a recession. Recession periods can be hurtful, but they are often short.
Sometimes as dentists we are fearful, because we don’t know what is happening in the financial world. We tend to blame the problems we see in our practices on the latest economic disaster.
Turn away from the ‘doom and gloom’ promoters
Having lived through a few economic downturns (no matter what they are called), I have found that dentistry is solid and withstands economic upheavals. I don't want to say it’s recession-proof completely, because some practices have closed due to financial hardship, particularly during the pandemic. However, compared to many other businesses, dentistry usually comes out on top.
New dentists starting their practices during this time may feel more pressure than seasoned veterans. My advice is to be grateful for your career as a dentist.
Dentistry is resilient and doesn’t fail. The world needs healing and nurturing people like dentists. We don't just fix broken teeth; we fix people by giving them paths to health.
Dentistry will always be a need, whether for function or aesthetics. People can postpone or deny dental care for a while, but everyone needs a dentist’s services at some point. Finding and keeping patients is the challenge of the business side of dentistry.
How to shore up your practice against the kraken of recession
During times of economic uncertainty, I want to share six tips you can implement to put your mind at ease and help your practice stay productive and profitable.
- Don’t buy into the fear and make decisions based on predatory advertisements as the answer to your problems. Do your research, and don't panic purchase.
- Stay connected to your patients. They want to know that they can count on you to be there to take care of them and the community during hard times.
- Sharpen the look of your website and its content. Demonstrate that you are engaged, in touch, and that you want to give back to your community.
- Show gratitude and empathy to your patients. Thank them. Offer payment options like dental discount plans that make dentistry affordable or outside funding that helps patients secure reasonable monthly payments for their dental care. Help patients understand their insurance plans and get the maximum reimbursement allowed. Most importantly, talk to your patients and listen without interruptions. Build trust and goodwill.
- Adapt your goals. You may have set some financial goals and stubbornly stuck to the numbers a few years ago. If you have a marketing plan to bring in 60 new patients a month but have not seen near that number recently, analyze your statistics and referral sources to determine if you need a new strategy.
- Know your key performance indicators (KPIs) and take measures to improve them if necessary. These KPIs include but are not limited to new patient numbers, relative production, or your return on investment for each new patient, as well as active patient numbers (patients you have examined in the last two years), the total number of treatment presentations scheduled and unscheduled, and the number of active patients appointed in hygiene.
Other essential KPIs include:
- Production (adjusted)/insurance production
- Collection (adjusted)/insurance collection
- Total expenditures/overhead
- Cash reserve/emergency fund
Don't lose the ship to the beast of recession fears. Stay the course and realize that a month with low production doesn't mean you must abandon the ship. Get your crew (team) involved, and make the changes to flourish and not founder.
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.