by Wendy O’Donovan Phillips
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Protect the Health of Your Practice
During the Economic Downturn
By Wendy O’Donovan Phillips
It’s clear that every dentist in the United States must take action now to safeguard their practice through the shelter-in-place and the resulting economic storm. What’s unclear is what action to take when.
Suggested are five steps, in order of priority:
[/vc_column_text][vc_column_text]1. Predict short- and long-term impacts on your business operations.
Consider your current financial state, including a cash flow forecast for the next 120 days. This level of communication happens at the owner/advisor level and includes the dentist, partners, associates, practice consultant and cash flow specialist, referred to herein as your leadership team. Note that a cash flow specialist, who forecasts future cash scenarios based upon relevant past data, is different than an accountant or bookkeeper, who only advises on financial historical records. Resources for cash flow specialist contact information can be found by clicking the link at the bottom of the bio in this article. With clarity on your cash flow forecast, revise your 2020 revenue goal accordingly. Based upon that production number, decide now whether to reduce staff, refinance or apply for new loans or apply for government assistance.
2. Understand how to take the right steps now to minimize risk.
This can be broken into three steps:
1. Team Communication. Once your leadership team has clarity on the financial picture and has decided what steps to take to reduce expenses and/or inject cash into the practice, you can turn your attention to communicating appropriately with your internal team. Call each team member individually to clearly state whether they will be retained or laid off. Be honest and provide as much information as you have. It’s okay to not know, and to say as much. Make a commitment to each team member to provide details once you know them. For those individuals who are laid off, provide contact information for an HR specialist to field their questions. Resources for HR specialist contact information can be found by clicking the link at the bottom of the bio in this article.
2. Vision Communication. Once the team is right sized, turn your attention to your vision statement. Have a briefing on the practice vision with the remaining team, discuss how it applies in this new environment and how it impacts change given this new environment. Communicate your vision regularly and often to the remaining team, as this unites them in a common purpose during trying times. As Friedrich Nietzsche said, “He who has a why to live for can bear almost any how.”
3. Patient Communications. After communicating with the team, it’s time to turn attention to patient communications. Again, the one-on-one phone call goes a long way in showing you care and building relationships. After all, aside from the dental team, the patient base is the practice’s biggest asset. Keep these calls simple and organic. You might say, “You have been on my mind, and I wanted to see how you’re doing with all this.” Show up in the spirit of your vision, and you will keep patients for a lifetime. Even more, they will remember you when doors reopen and it’s time to refer. As Maya Angelou said, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
3. Use real-time data to quell your own fears and those of your patients.
There’s nothing more powerful than data to provide clarity and drive right action. In that spirit, here are two recommendations:
1. Learn from peer insights. While there’s no historical data for this unprecedented time, there is real-time data. A Big Buzz survey of 2,622 dentists nationwide, run the week of March 23, 2020, revealed these trends, among others:
- The business issues most pressing for dentists right now given the possibility of a recession are maintaining take-home pay followed by minimizing impact on business financials.
- 34.59% of dentists surveyed believed the economic downturn might last 3-6 months and another 28.61% said 6 months to 1 year.
- When asked how much cash they have on hand, 49.18% responded 1-2 months’ worth and another 30.99% said 3-4 months’ worth.
Full survey data is available upon request by emailing info@bigbuzzinc.com with “Dental Survey Data Request” in the subject line. There is strength in numbers. Knowing your peers are facing the same challenges and understanding how they are handling them can minimize feelings of isolation, provide insight into your comparative strengths and aid in rapid decision making and right action.
2. Learn from patient insights. Beyond understanding data from your peers, consider surveying your patients to understand fears and challenges and how your practice can best serve them now. A practice owner called recently to say, “I’ve lost 80% of my patients overnight.” When asked if that was verifiable data, she realized it was only a fear, not a reality. Parlay concerns heard during your one-on-one calls to patients into a set of questions to ask the larger patient base. Surveymonkey.com is an easy tool for creating and sending the survey. Make decisions based upon data and facts to create a solid foundation for your practice to recover.
4. Be proactive and reasonable in implementing your original 2020 business plan.
There are three steps to this process:
1. Develop financial scenarios. Based upon your cash flow forecast, develop three likely scenarios for year-end production. For example, Scenario 1 might be 90% of last year’s production, Scenario 2 perhaps 80% and Scenario 3 maybe 70%. Use your best judgement based upon the length of time your practice doors are likely to be closed.
2. Get a snapshot of your practice’s operational potential. Conduct a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Focus particularly on opportunities. Your patients and community have different needs now than they did even a month ago and will have different needs in another month. Not all practices will take the action you will, and some won’t weather this storm. Those patients will be looking for a new dental home come summertime. Focusing on opportunities now will help you more readily hit your revenue and profit projections by year end. You can download our free template below.
3. Create a one-page move-forward plan. Develop a single-page document shared once weekly with the remaining team to show: the vision; revised production goal; objectives, or destinations, that the team to reach to get to the production goal; and, strategies, or actions, that the team can take to achieve each objective. This “game board” will focus the team on right action to move the practice forward. Given the turn in global events, it’s critical to think weekly about what action is necessary to reach the goal. You can download our free template below.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]Download our FREE resource templates here. Fill out the form and we will send them directly to your inbox. These include SWOT, TOWS, Strategic Planning Model and Vision Statement worksheets.[/vc_column_text][/vc_column][vc_column width=”1/2″]
5. Immediately use tools that provide team-wide focus and clarity during uncertain times.
Organizations ranging from the federal government to dental associations to independent companies are at the ready to help you through this. Take all the help you can get. Click the link at the bottom of the bio in this article for complimentary resources to support you in accomplishing the aforementioned steps.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]As the Stockdale Paradox reminds us all, “You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.” Take right action, and you will survive!
Wendy O’Donovan Phillips is CEO of Big Buzz, an agency delivering strategy and consultation to drive focused communications efforts for dental/medical, senior living and medical technology sectors nationwide. Wendy is the author of two books, has been published in dozens of healthcare journals and lectures on some of the largest stages in the industry.
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