Blog, Practice Value, Profit

How to Maximise The Value Of Your Dental Practice Post Covid-19

 Considering how to maximise the value of your dental practice post-Covid-19 lockdown may seem an impossible task. The increased cost of PPE and reduced income due to fallow time will certainly impact upon practice EBITDA.

Loss of income for some during lockdown means doubts about financial recovery.

Along with the all too familiar challenges of running a business, regulation and litigation, even for those whose income has remained somewhat secure due to plans or NHS contracts, dental practice owners are wondering whether the rewards of owning a dental business are great enough to outweigh the challenges.

And the answer is very often ‘no, the hassle has become too great’. This leaves dental business owners wondering what their options are for exit, when they are concerned about maximising the value of their dental practice post-Covid-19.

History Lessons

The good news is that dentistry is remarkably resilient in the face of economic declines. In the last recession in 2008/2009 the impact upon dental practices was moderate. The fact that private equity investors continue to have a vested interest in the sector backs up the perceived low risk of the dental sector.

Whilst the impact upon dental business values will be determined by the as yet unknown conditions of an impending recession, history has taught us that levels of revenue and profitability will eventually return to normal (Covid-19 precautions aside). The question is, how long will it take and do I have the motivation to continue running my business in the mean time?

What do Agents Say?

A round-up of dental sales agent blogs on the topic of dental practice valuations post-Covid-19 echo that the outlook is positive. The call to action is often ‘start preparing now, as selling your practice takes a while’ – between 9–12 months on average, sometimes longer.

The advice is consistently prepare to maximise your EBITDA.

How do you maximise the value of your dental practice?

What is the first thing that comes into your head when you’re thinking about how to maximise the value of your dental practice?

Profit I expect?

Followed by thoughts about costs and how they can be managed.

And income and how more can be generated.

Logical of course, as profitability (EBITDA) is the metric used to value a business.

People, however, are the conduit for delivering profit and managing costs, so this is where your focus should begin when you start considering the value of your dental practice.

Maximising the value of your dental practice through your people

You are sitting on a mountain of untapped value – your people.

Engaged, efficient, motivated teams are the key to accelerating results.

Perhaps a tall order given our current circumstances?

This is where stepping up to your role as leader and painting a clear and positive picture of the future is essential.

Even when you’re navigating a fog of unknown variables, such as how long we will need additional PPE and fallow time and whether there will be a Covid-19 second wave, you have an opportunity to gather closer together and navigate that fog as a team.

“Leadership is not about always having the answers. It’s about the ability to bring your team together, so they feel as passionate about the future vision for your dental business as you do. Team capability, loyalty and trust is formed.”

evolveyou dental

The challenge in the above quote is whether you feel passionate about the future vision for your dental business?

You need to lead where you would like your team to follow.

Finding certainty in an uncertain world is challenging to say the least.

The certainty you can have is that by bringing your team together, you will create a shared experience and a sense of belonging. This in turn will reduce stress and share commitment for finding the answers together.

Creating a Future Vision

There’s a close link between the Vision and Strategy of your business. With founder-owned businesses, such as dental businesses, it’s often the owner/s who decide upon vision and strategy. This is because there is a correlation between the business vision and what they personally want from life. However, these are often misaligned, for example work/life balance isn’t where you would like it.

It’s sensible, as the leader of a business, to have a view of Vision and Strategy. However, business leaders often make the mistake of then communicating or sharing this Vision with the team. This is better than not sharing at all, however, it’s much more powerful when you involve the team.  More here on the mistakes dental principals make in engaging their teams. Until your Vision and Strategy are crystal clear, both to you and your team, you will miss a huge opportunity to maximise the value of your dental practice.

Get Your Team to Support Your Vision

The first step to team involvement is developing trust, where people feel they are listened to and can have honest conversations.

Once trust you evolve trust, you can hold better conversations. With better conversations comes better decisions which the majority feel committed to and this then accelerates results.

A starting point for developing trust is to ask the team for their views on the future vision for the business. What they want to achieve, what they need to help them to achieve it, what actions they will take to make it happen.

It’s important for you to be amenable to having open, honest debates. Realise that challenges to the Vision/Strategy are not challenges to you. This is about creating a shared commitment to making the business successful.  More here on ways to engage your team.

What’s in it for them?

What each team member will be looking for is ‘what’s in it for me?’. It’s natural that we look for personal motivations when considering our commitment. The unconscious question we ask ourselves is ‘if I put this effort in now, what will the reward/pay off be?’ Each team member, even if they’re not aware of this will be looking to answer this question for themselves.

Team involvement – and keeping them focused upon ‘what’s in it for them’  – is an ongoing journey. A great way to continually focus upon what’s important to them (rather than what’s important to you) is to ask these killer questions guaranteed to engage your team.

As well as regular one-to-ones, which are about reviewing progress and keeping Vision and strategy at the forefront. Ensure you have regular team conversations, follow up agreed team actions and celebrate progress (even small wins).

It’s an investment in time, which will reap rewards, both in terms of developing a team who are capable and committed and because of the value having this kind of team will add to your business in the longer term.

Happy, engaged teams accelerate results

Businesses with happy, engaged teams naturally begin to accelerate profit and maximise the value of your dental practice. Your team are on the same journey as you. By fully engaging your team, you will consequently enhance the patients’ experience and you will have maximised the value of your dental practice. You may also find that you are enjoying running your business much more than before and so the question of selling is something which becomes a much longer-term plan. Then, when the times does come for you to sell, a strong market awaits.

Managing a dental business, as well as working clinically is demanding. On top of that finding time to engage your team can be challenging. Evolveyou dental specialises in working with dental business owners to create happy teams, meaning accelerated results and a profitable business. Our 4Ps accelerator programme ensures we focus on both. Contact us to discuss how we will work with you.