2.16.18 Issue #832 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter

Don't Just Hire the Best People, Set Them Up for Success
By Sally McKenzie, CEO

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You finally found the perfect person to fill the Office Manager role. It took some time, but you developed a strategy and didn’t make an offer until you were sure you had the best person for the job. You were excited for this new team member to get started, and had visions of a more efficient, streamlined practice and a lot less stress for the rest of the team. So why, three months later, isn’t this new hire living up to your expectations?

Going through the proper hiring process is key to finding the best and brightest employees, but your work doesn’t end there. Once you get the right people on board, you have to give them the guidance they need to succeed. It doesn’t matter how smart, experienced or talented they are. If you, the practice CEO, don’t provide them with the direction they crave, they’ll feel lost and frustrated – making it difficult to contribute to practice success.

So how can you get the most out of your quality new hires? Read on.

Give them detailed job descriptions. You should have job descriptions in place before you even start the hiring process. This will ensure the candidates you interview have the necessary qualifications and right temperament for the role. Once they’re officially part of the team, make sure every new hire receives a copy of the job description, which should outline the position’s responsibilities and your expectations. That way, there will never be any question about what’s expected of them or confusion over who’s responsible for what.

Train them. Many dentists opt to skip training new employees, especially if they’ve worked at another practice and have years of experience under their belt. They convince themselves these team members can learn on the job, saving them the time and expense that comes with training.

I’m here to tell you that’s a mistake. Just because your new Scheduling Coordinator worked at another practice for seven years doesn’t mean she knows how to use your software or how you prefer things to be done. Take the time to properly train new team members so they understand how your practice operates and are more confident in their abilities. They’ll not only be happier, they’ll also be more productive.

Hold them accountable for their systems. When team members are accountable for their systems, they take ownership. They’ll look for ways to be more streamlined and efficient, which can lead to an increase in productivity and revenues for your practice. Make it clear you expect them to report on system successes and failures at staff meetings and let them know what your expectations are. This will motivate them to excel and make their job more rewarding – helping to keep them loyal to your practice.

Offer continual feedback. Your employees, no matter how long they’ve been with the practice, have no idea how they’re performing if you don’t tell them. The truth is, they want to know what they’re doing well and where they can improve, and the best way they can learn that is from you. Make a point of offering employees positive and constructive feedback as often as possible, and you’ll see an improvement in their performance.

When should you offer this feedback? Right when you notice the employee either doing something right or doing something wrong. Overhear your Treatment Coordinator schedule a big case by providing additional education to a patient during a follow-up call? Let her know you appreciate her efforts and how important those types of calls are to the practice. Notice your assistant is taking too long to turn rooms over between appointments? Take that person aside and discuss how efficiencies could be improved. Trust me, they’ll appreciate the feedback, and will either be motivated to keep up the good work or make corrections.

Finding the right team members isn’t always easy, but it’s worth the effort. Talented, qualified team members will help you grow your practice and meet your goals. But they won’t be nearly as effective if they don’t have the proper tools. As the practice CEO, it’s critical for you to provide new team members with the guidance they need to do their best work, and that comes in the form of job descriptions, training and continual feedback.

For additional information on this topic and more, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
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Nancy Caudill
Senior Consultant
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Plan for Practice Growth
By Nancy Caudill, Senior Consultant

Dentist Case Study #281

The doctor’s concerns: “I recently expanded my practice, and while this has always been my dream, it’s turning into a bit of a nightmare. My overhead costs are out of control, and I don’t know how to reign them in. I struggle to meet payroll each month and I’m worried about the practice’s future.”

This is a stressful and costly situation, which is why the doctor turned to McKenzie Management for help.

The practice facts:
The new office has six fully equipped operatories, two hygienists, two business team members and two assistants
The doctor averages $3,000 per day
Hygienists average $950 per day
The practice sees 22 new comprehensive exam/hygiene patients per month
Collections are 98% of net production
Accounts receivable is 0.87 of net production
Staff gross wages have reached 18% of net collections each month and a total overhead of 55%

To get this doctor’s costs down, we first identified the main issues contributing to his overhead woes. We quickly learned that he didn’t spend hardly any money or time marketing his practice, had no consideration of facility overhead to income, hadn’t worked out criteria for his practice’s employment needs, and he didn’t spend much (if any) time planning for practice growth.

So what should this doctor have done before investing in new equipment, a new space for his practice and new employees? He should have made sure he understood key industry benchmarks. This would have helped him pre-plan his move and would have made the transition much more successful.

Here’s a breakdown of some of the key industry standards:
Facility overhead should be around 5% of collections. In this doctor’s case, his space costs $5,000 a month. Let’s do the math to figure out where he should be:

$5,000 / 5% = $100,000 a month in collections. Before the big move, he was collecting about $77,000. Hitting his new target would have required a 30% increase. While this certainly is possible, it requires an updated business plan and having the right tools in place. Unfortunately, this doctor had neither. 

That takes us to the staff salary overhead budget, which in this case should be $100,000 x 20%, or $20,000 a month.

Here is where his salary numbers actually fell: 
Two hygienists at $350/day x 16 days = $12,200
Two assistants at $144/day x 16 days = $5,760
Two front desk coordinators at $144/day x 16 days = $5,760
That comes to $23,720, which puts the practice at 23.7%: nearly 4% over budget

When we first told our doctor about this, he didn’t seem that concerned – until he realized that small percentage amounted to almost $45,000 a year.

So how can this be fixed? We discussed a few options. First, he asked about working a few more days to increase collections. The problem? That doesn’t necessarily translate into more production. You need patients in the chair to do that, and he didn’t have enough at the time to justify extra days. 

Increasing fees is another option, but this can’t be done willy-nilly. Dentists should set up a solid schedule and evaluate and consider raising fees twice a year; 2% the first time and 3% the second, for a total of 5%. McKenzie Management worked with him to put the proper structure in place, but more needed to be done.

The doctor also asked about leasing out two of his operatories to a specialist. Sure, this could help with overhead costs, but it also brings its own set of headaches, including legal agreements and logistical issues that would need to be worked out.

What McKenzie Management recommended
It was pretty clear this doctor needed to increase production numbers, but how? One of the best ways is to focus on recall – a system he’d been ignoring. To do this, he tasked a team member with calling past due patients. This team member reached out to hygiene patients as well as patients who hadn’t gone forward with treatment plans. Armed with all the necessary patient information, including perceived barriers to treatment, the calls were used to educate patients and get them back on the schedule.

Next, we encouraged the dentist to step up his marketing game. He had put together a few one-off promotions, but what he really needed was a continuous, targeted strategy to keep a steady flow of new patients coming in. It was also important that he didn’t forget about current patients. He began sending out monthly e-newsletters to educate them about services the practice provided, and placed brochures and posters promoting services in the practice.

It was clear that he had too many staff members. With proper scheduling, he was able to go from two assistants to one. We did, however, recommended that he keep his business staff in place to help with promoting the practice and anticipated growth.

With these changes, the doctor was able to boost practice production and revenues, and finally get his overhead under control. The lesson? When expanding, plan for growth before making the leap. This will help ensure you never struggle to meet payroll, and that your new, bigger practice is also more profitable.

If you would like more information on how McKenzie's Consulting Coaching Programs can help you implement proven strategies, email info@mckenziemgmt.com

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