Sally McKenzie, CEO McKenzie Management Printer Friendly Version

Cut Cancellations and Curb No Shows

Certainly, dental practices everywhere have experienced an increase in cancellations and no shows. Given the economic circumstances of the past several months, seeing more holes in the schedule isn’t all that surprising. However, while it may be a temporary sign of the times, that doesn’t mean it has to become standard operating procedure in your practice. Give your patients a reason to keep those appointments, starting with the simple act of reminding them that you are expecting them on this day at that time. Yes, I’m talking about appointment confirmations - but this time, communicate with them using 21st century techniques that virtually guarantee a positive response.

While yesterday’s practices long relied on phone and fax, today’s modern dental offices are integrating instant messaging and social media tools into their everyday patient communication systems. And in the process, they are streamlining practice efficiency, reducing no-shows, curbing cancellations, filling open appointments, and enhancing doctor/patient relationships, one emoticon at a time.

Most likely you are among the millions that rely on text messaging, Twitter, email, and Facebook as your preferred methods of routinely communicating with family and friends. What you may not realize though is that your patients are using these same tools just as much as you are, for both personal and professional communication. Email, text messaging, and the Internet are the communication methods of choice for most patients today. If you and your team were to utilize them to their fullest, you could streamline practice efficiency, reduce no-shows, curb cancellations, and fill open appointments in a fraction of the time. What’s more, nearly 90% of your patients would welcome the opportunity to respond to your messages, and confirm appointments using these tools. According to Internet World Stats, nearly 1.5 billion people regularly access the Internet. As of September 2009, nearly 75% of the North American population was online. From 2000 to 2009, the percentage jumped 134%.

And it doesn’t stop there. There has been an explosion in text messaging. People of all ages are texting in huge numbers and the older demographic of adults ages 55-64 use this method of communication routinely now because they too have discovered it is far more efficient in many cases to send text messages than to leave a voice mail. According to a Nielson Mobile Survey, the number of text messages sent and received increased 450% between 2006 and 2008 alone. You can bet that figure is even higher today. The fact is that Americans, on average, text twice as much as they talk on their mobile devices. The majority of your patients likely are riding high on this text messaging bandwagon.

What’s more, responses to text messages are much faster than responses to voicemail. According to a survey conducted by Opinion Research Corp. (ORC), a text is far more likely to elicit a quicker response than voicemail. Adults 30 and older are twice as likely to respond within minutes to a text message as compared to hours or even days with a voice message. The vast majority of working professionals prefer the speed and efficiency of email and text messaging for routine communication. The telephone takes too long for everyday matters, such as appointment confirmations. Moreover, most professionals keep their calendars on their computers, iPhones, and Blackberries. They know immediately if they can keep that appointment and so could you if you’re willing to communicate with them using today’s more efficient tools rather than that vintage 1980’s landline you’re clinging to.

Saving the schedule from no-shows and last minute cancellations offers one of the best arguments for making the most of today’s communication methods. Everyone wants patients in the chair at the appointed hour - after all, that translates into more money for the practice.

Sally McKenzie is CEO of McKenzie Management, a nationwide dental management, practice development and educational consulting firm. Working on-site with dentists since 1980, McKenzie Management provides knowledge, guidance and personalized solutions that have propelled thousands of general and specialty practices to realize their potential.

Interested in speaking to Sally about your practice concerns? Email her at sally@thedentistsnetwork.net or call 1.877.777.6151.

Interested in having Sally speak to your dental society or study club? Click here.

Hear Sally’s FREE podcasts at The Dentist’s Network - HERE

Forward this article to a friend.

Dr. Lorne Lavine Dental Technology Consultants Printer Friendly Version

Face The Music - Part I

You’re the owner of a dental practice and you are trying to figure out the best steps to get onto Facebook to drive new patients. It can be a daunting task and with little extra time in the day, how can you be expected to spend time promoting your business on Facebook? I completely understand the challenges of running a busy practice and after speaking with dentists as well as other small businesses, I’ve compiled the following list of strategies that should help ease the process. This is part one of a two-part series.

1. Go Slow and Steady - Don’t Overdo It
Any form of promotion is like compound interest. It takes time to build up the residual returns but if you stick with it, the pay off can be substantial. Many people hear that Facebook is a great way to promote their business but after trying it out for a few days or even a couple weeks, they don’t see significant effects so they give up and decide to keep paying for Yellow Page advertisements. Who knows how well Yellow Page ads pay off, but that monthly check must be going towards something, right?

The difference between Facebook and more traditional promotional channels is that the practice owner needs to invest a little bit of their time. The extra effort can go a long way and provide a rewarding experience as customers begin to give feedback and communicate directly with you. So how much time do you need to be spending? Not hours a day! While promoting via Facebook can become an addictive process, you can allocate little more than an hour a week to your promotional activities. While it’s never bad to start off enthusiastically, you don’t want to waste all of your efforts in the first few days. Build up your fan base steadily and you’ll begin to see the benefits.

2. Contact Your Fans Directly
While digital media companies and large brands may have thousands upon thousands of fans, most small businesses don’t end up with as many fans, especially if they are local. When you first start growing, it’s a good idea to interact with each new fan on an individual basis. Send users a message after they’ve become a fan of your Facebook page. Build a relationship with each fan and they’ll become a fan and a patient forever.

Once you build a connection there’s a good chance the user will tell their friends. I’ll be discussing that strategy further in an upcoming guide. The main point here is that each new fan can be considered a new lead for a dental office. Selling on Facebook is subtle, however, and should not be done in an overly aggressive way. Just because someone became a fan does not mean you should send them a message saying “Buy my stuff today!!!” Instead, reach out to each new fan individually to welcome them to your Facebook Page and begin a dialogue. In many times these initial conversations will lead to lasting business relationships.

3. Don’t Spam
I’ve written about this before and it never gets old: don’t spam your users. As the owner of a blog, I get countless people who try to spam the comments and I’ve seen the same thing take place on Facebook. Spamming your users with too many links or trying “black hat” tactics to rapidly drive up your Facebook page fan base is not worth it. Facebook is aggressive at stopping spam and there is a good chance that they’ll stop you somewhere along the way, and it can potentially cost a lot.

4. Consider It An Educational Experience
Rather than looking for an instantaneous return, look at it as a long-term educational experience. As you improve your strategy, you’ll attract more fans. It takes time to master Facebook promotion and time to reap the rewards, but the payoff can be significant. The main point of this rule is clear: stick with it for the long haul. If you blow out your budget in the first few days and expect to have a massive response, you will be seriously disappointed. Learn from the experience, take notes, and improve your strategy over time. It may sound like a lot of time but you can do much of this in as little as 15 minutes a day.

One other benefit of considering it an educational experience is that the whole process is deductible in your taxes. You can write off the expenditure as advertising or as education (you need to speak to your accountant to determine the best way to file an entry for this).

In part II, we'll look at a few others important points to consider.

Lorne Lavine, DMD is the Founder and President of Dental Technology Consultants. Dr. Lavine holds two prestigious certifications, the A+ Certified Technician designation and the Network+ Certified Professional. These designations demonstrate proficiency in computer repair, operating systems, network design and installation. Dental Technology Consultants provides dentists a full range of services relating to the implementation of technology.

Interested in having Dr. Lavine speak to your dental society or study club? Click here. Dr. Lavine can be reached at drlavine@thedentistsnetwork.net.

Hear Dr. Lavine’s FREE podcasts at The Dentist’s Network - HERE

Forward this article to a friend.

Thomas L. Snyder, DMD, MBA Managing Partner The Snyder Group, LLC Printer Friendly Version

Ways to Handle Accounts Receivable for a Partnership
Buy-In

If you are considering becoming a partner this year, one of the issues that needs to be addressed is treatment of the Accounts Receivable at the time the partnership is being formed. As stated in previous columns, when valuing a dental practice, the Accounts Receivable are not considered part of the valuation. Therefore, when a value has been agreed to for your partnership interest, a separate arrangement needs to be designed regarding the treatment of Accounts Receivables. If you’ve been an associate in the practice and have been paid on a percentage of collections, the amount of Accounts Receivable that relates to your outstanding compensation prior to the partnership formation must be accounted for as well. 

Accounts Receivable can be handled several ways in a partnership. First, you have to determine the net Accounts Receivable. Collection strategies vary from practice to practice.  When calculating a Net Accounts Receivable, you need to know the historical Collection to Production ratio to help guide you to the appropriate discounts to outstanding Accounts Receivable. For example, a 99% Collection to Production ratio in a practice implies that the majority of the Accounts Receivable are good and are collected in a timely manner.  Therefore, the major discounting may only occur in accounts past due 90 days, whereby historically these funds are not collected at 50% or less. It’s important that you take a careful look at Accounts Receivable aging of both cash balances as well as insurance balances to make your appropriate discounting for each category. 
Let’s examine two options:

1. Borrowing Funds to Purchase a Partnership Interest
An increasing number of doctors are desirous of purchasing a significant portion of ownership interest at the outset, through a bank loan. Dental lenders are willing to make loans for partnership buy-ins and, in some cases, they will provide working capital if needed.  At the time of settlement, the Net Accounts Receivable are an asset of the Senior Partner, so when collected after the partnership is formed, these funds are paid out to the Senior Partner. This may have an adverse effect on the practice’s cash flow if these payments are made to the Senior Partner upon receipt, so funds may be limited on paying the practice’s bills.

One approach is to determine working capital need for the first 30 to 45 days of operation with both partners contributing an amount equal to their respective ownership percentages. Let’s assume that the Net Accounts Receivable are $120,000. The new partner will be purchasing a 30% interest in cash. Based on the practice’s accountant analysis, the practice requires $80,000 of working capital. The Purchasing Partner would contribute $24,000, and the Senior Partner $56,000, based on their respective ownership percentages. The Senior Partner’s working capital contribution would come from his/her Net Accounts Receivable ($120,000). If bills are paid from these Net Accounts Receivable, then the remaining balance of $64,000 would be paid to the Senior Partner over the next twelve months. The approach minimizes cash flow shortages and allows patient balances (with the exception of the working capital contribution of the buy-in partner) to keep the practice running smoothly.

2. Graduated Buy-In
Graduated Buy-Ins are designed so that the purchasing partner buys in through the cash flow of the practice, not via a bank loan. Working capital is still an issue after settlement, but since no funds will be contributed by the purchasing partner, we now calculate a Net Practice Value for purposes of the Buy-In. Many graduated Buy-Ins typically allow for 10-15% of ownership interest to be purchased annually until the partners arrive at a 50/50% ownership. When calculating a Net Value, you first determine the practice value, then add the Net Accounts Receivable, subtract any outstanding liabilities, and the result is a Practice Value. Here’s an example of the math:

Sale Price - $700,000
Collectible A/R - $100,000
Outstanding A/P - $30,000
Net Value - $770,000
Assume an Ownership Interest of 10% 
Net Value ($770,000) x 10% - $77,000

In this example, the purchasing partner pays $77,000 during the first year of the partnership.  Each year you will “re-calculate” the Net Value to determine the new Net Value for the next year’s Buy-In. In some partnerships, the practice’s original value may only be adjusted for inflation, yet you still need to recalculate a Net Value, as debt may decrease and Accounts Receivable will fluctuate.           

If you would like additional help, email Dr. Snyder at drsnyder@thedentistsnetwork.net.

Interested in having Dr. Snyder speak to your dental society or study club? Click here.

Hear Dr. Snyder’s FREE podcasts at The Dentist’s Network - HERE

Forward this article to a friend.

The Dentist's Network Newsletter Information:
To unsubscribe: To discontinue receiving The Dentist's Network Newsletter,
click on the link at the very bottom of this page for instant removal,
To report technical problems with this newsletter or to request technical help,
please send a descriptive email to: webmaster@thedentistsnetwork.net
To request services, products or general inquires about The Dentist's Network activities
please send a descriptive email to: info@thedentistsnetwork.net
Copyrights 2006 The Dentist's Network - All Rights Reserved.