I recently picked up Michael Gerber’s The E-Myth Dentist (2013) and there are some solid take-a ways from this book. As an entrepreneur and marketer, the original version – The E-Myth Revisited (E= Entrepreneur) – is still one of my favorite business books. Gerber brings to light the distinction between working on your business and working in your business.
The section of the book that resonates with me is the focus (or sometimes lack thereof) on the equity value of your practice. Equity as described by Gerber is the financial value placed on your practice by a prospective buyer. So why is this so important?
According to the ADA, 96% of dentists cannot retire at age 65 and maintain their lifestyle. But the good news is that you can be a part of that tiny 4% who can retire very comfortably at age 65. All it takes is proper planning, regardless of whether you’re a start-up or you have a 25-year practice.
Of course, you have to start with a practice that works – a practice that can replicate income and turn a profit year after year. In other words, you need a practice that STANDS OUT in your market area in what soon may be a “buyers” market.
Here’s how Gerber puts it: The value of your practice is directly proportional to how well your practice works. And how well your practice works is directly proportional to the effectiveness of the systems you have put into place upon which the operation of your practice depends.
In addition to your documented internal systems, prospective buyers will be looking at your marketing effectiveness and new-patient flow. There is a direct correlation between marketing and practice valuation. Most dentists recognize that generic marketing strategies are no longer good enough to raise a practice to the level they want in the long run. With the extensive analytics and marketing intelligence data Patient News is now collecting, we are consistently improving dentists’ marketing results and raising their standings in the communities they serve.
So where do you start?
Well, first make a list of the areas within your practice that you feel have deficiencies that can be improved, then identify goals and apply timelines. Here are 5 key focus areas.
- Marketing effectiveness & brand awareness
- New patient onboarding & success rates
- Training effectiveness & patient satisfaction ratings
- Maximizing patient lifetime value
- Retention & referral strategies.
Sound daunting? Sure it is. But remember, you can’t do everything yourself. You’ll need to prioritize and delegate. Find experts who help you achieve your goals. For example, our Patient News marketing intelligence team can take care of your marketing mix as effectively as possible. That’s one big step towards working on your practice and increasing equity value. Regardless of what stage you’re at, the equity value of your practice or group of practices can be increased … dramatically.
If you feel that your marketing programs could be doing more to improve your practice valuation, contact your Account Manager for a complimentary business review.