The Seven Business Elements of Any Practice – Part II
All practices must pay attention to the Seven Business Elements of Any Practice in order to be successful. Most of us are really good at a few of the seven and unwittingly ignore the other three to four. Small businesses are especially vulnerable to this because the owner relies on her personal strengths and doesn’t understand that, until all seven elements are addressed, managed, and contributing to the practice, it will always struggle in some way. A successful practice has the people and systems in place to hum on all seven cylinders.
And all great practices do!
The primary requirement of any business is – To acquire and retain patients profitably. In dentistry, as with every other business, retention is FAR more important than acquisition, yet we expend almost all of our energies on acquisition. But we must have must have all three – acquire, retain, and be profitable – all at once, or we will go out of business. All seven Elements help us acquire and retain profitably, and all seven require systems and great relationships to work properly.
Element One—Vision & Leadership
Vision is foundational – The two most important questions in business—“Why?” and “When?”—are the least asked. Asking these two questions will help you get a handle on the other six Elements in a way no other question will. Be a leader—get a vision for where you going.
Element Two—Business Development/Patient Acquisition
To get patients you need marketing and sales, and to get sales you need to understand your message and your market. And marketing doesn’t have to be expensive. I have one client with a $12 million single-location practice who does zero traditional advertising.
Patient acquisition is important in developing the business side of dentistry.
Element Three—Operations & Delivery
This business Element trips up more practice owners than any other, except Financial Management and possibly Business Development. We’re all out there trying to sell great dentistry, but our patients unfortunately aren’t buying what we’re selling. We’ll take a look at McDonald’s, Nordstroms and a few others to prove my point.
Element Four—Financial Management
Financial Management is a critical element of business. Almost no practice owner has a good enough grasp of this. Numbers don’t just add up, they tell stories. Numbers are the language of business and very few practice owners speak “Numberese.”
Do you know what story your numbers are telling you? If not, you need to learn. You can’t ignore this fourth element. In this podcast, I’ll recommend the best (and only) book you need to buy to understand the financial side of your practice.
We’ll look at the other three Elements in the next podcast!