Owning more than one practice might sound like it promises twice the profit but making it all work demands a different level of management. By John Burfitt
For many dentists, the decision to open a second practice, and then possibly more again, is all part of a bigger strategy to build wealth. This grand plan of attracting twice the business, and then hopefully twice the profit, carries also twice the risk. While many dentists make owning a number of clinics a profitable success, there are just as many who don’t.
“Don’t be fooled into thinking that opening a second or third practice is a license to print money,” says Dr Toni Surace, managing director of Momentum Management and the co-founder of Great Smile Dentist, a large network of independently owned dental practices. “Anyone who tells you it’s easy taking care of more than one business is delusional, as it is never without stress. It is far more a matter of being strategic and deciding if this is right for where your present business is, and if taking on another practice is even a good way for you to work.
“Sometimes, it helps to check your ambitions about wanting your own empire of clinics, and instead look at the reality of what’s really going on within your practice. It takes a constant juggling act to make sure everything is working in all the right ways.”
Making it work
One person who has made it work—and well—is Dr Nauv Kashyap, who has owned a total of 16 dental practices, and currently has six across Brisbane and south-east Queensland.
“I have very little management input into each of the clinics once they’re up and running,” Dr Kashyap says. “I would spend a total of two hours a week checking in on all of those practices, and that works well for us.”
The secret to operating this way, he reveals, is employing resilient staff, implementing consistent training and creating a clear structure of delegation.
“I have a head practice manager who takes care of everything, and at each clinic I have a practice manager who reports in to that head practice manager,” he explains.
He says one of the most important lessons was learning he didn’t need to do everything himself, and it was more profitable for him to continue to treat patients while the support staff handled the management and operational duties. “But that means you need to find the right people who can take care of their various areas and do that well,” he says.
Learning how to delegate and having faith in the team requires an additional investment in training staff to develop skills through various levels of management. “When you get to a point where each of your practice managers have been organically trained, as they have worked in various areas of the business and been trained up at each stage, then you have staff who completely understand the structure and are used to working this way,” Dr Kashyap says.
Other tips for success
Putting clearly-defined systems in place is crucial for success in working across multiple practices, adds Bernadette Beach of Indigo Medical Consulting Services.
“Sometimes, it helps to check your ambitions about wanting your own empire of clinics, and instead look at the reality of what’s really going on within your practice.”
Dr Toni Surace, managing director, Momentum Management
“Establishing an effective staffing structure will ensure that the business is managed properly,” Beach says. “Before expanding to the first additional practice, a dentist needs a highly skilled practice manager who has the skills and expertise to be able to assist them with the project management of an additional practice plus be able to manage two practices.
“If the dentist has big plans of opening up five or more practices over a period of time, then I would suggest that a business manager is appointed who is more operationally and strategically skilled who can oversee the number of practices.”
There are some aspects that can be well managed from a distance, and others that should not be, warns consultant Julie Parker of Julie Parker Practice Success advises.
“Things like strategic focus and financial management can be done online, however it is the elements of people, operations and patient management that show enormous improvement when managed on site,” she says.
This is when the latest technology can allow for effective, online applications, like Zoom for regular staff meetings and training, as well as Evernote as a cloud-based location to house all essential operations.
“All of that will make the job easier, but every separate location still needs an effective on-site leader to provide daily direction as well as support.”
‘Structure’ is a word that Dr Vas Srinivasan also uses readily as he tells of working across his two Queensland clinics at Hervey Bay and on the Sunshine Coast. He claims setting goals of what he wants to achieve with more than one practice is paramount.
“Ideally, you should have a clear focus on why it is you want to have more than one clinic,” he says. “My goal was to set up a great practice in my main location, which was already served by an excess of orthodontists, and also start a second clinic in a rural area where competition was much lower. You also need to be clear about the days you’re planning to work at both locations and why. If you spread yourself too thin, none of your clinics would get the benefit.”
The exit plan
Dr Toni Surace says it’s a basic rule of business that when planning a new practice venture, a clear exit strategy should be in place at the same time.
“And yet, that concept is totally foreign to most dental practices I work with—it’s something they just don’t get. They believe once you have a good practice, you just stay with it.”
But when a bigger business enterprise involving multiple practices is involved, she says having a defined exit strategy is crucial. “You have to know when the right time is to sell the business,” she says. “I sold mine when it was at its prime as I knew it was then worth the maximum value, and it sold well. Considering the value of each practice as separate entities is important, as they could be at very different stages of their development.”
It’s a point Dr Kashyap agrees with, claiming he has sold all his practices individually. “That’s the best way as the sale of one practice shouldn’t be reliant upon or impact another one,” he says.
“You may not even plan to sell the practices, but your circumstances might change, so that’s why I strongly recommend your practices are always exit ready. So, if you need to sell fast, they’re ready to go. All my practices have sold within days of listing, and it was by selling them individually that I found was the best approach.”